27 September 2023

Smart shopping: How Coles plans to use AI to target customers

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Sharon Masige* says Coles is adopting artificial intelligence as its latest weapon in the supermarket wars.

Coles has entered a partnership with Microsoft that is set to deliver a better shopping experience for customers.

Under the agreement, Coles will shift its old processes to Microsoft’s Azure cloud platform, allowing it to use artificial intelligence (AI) technology in its stores and throughout its supply chain.

By automating repetitive activities like stock management and price markdowns, Coles claims staff will be able to focus on more important things like helping you find the right aisle for pasta sauce.

The supermarket chain said it’s also looking at intelligent checkouts that use recognition algorithms to reduce wait times for customers.

Chief Information and Digital Officer at Coles, Roger Sniezek told Business Insider Australia that one of the major challenges all retailers have is the availability of its products.

As a result, one of the areas Coles is working on is an AI-powered forecasting engine.

“It’ll look at what products we need to deliver to every store every day,” he said.

“The more accurate we get that, the better the availability we will have for our customers.”

Sniezek added that this is different from just using an AI algorithm based on historical sales.

“We’ll be looking at things like historical weather forecasts, local events et cetera and putting that into the AI model, which will then allow us to have a much better forecast per store, per product, every day.”

Coles is also looking at further implementing AI solutions in its stores.

“These can help you figure out when you’re out of stock, using a range of things from sensors on shelves to cameras in the stores,” Snizek said.

“[It then puts it] all together to help our team members figure out which things need to be replenished and when.”

All of that is aimed at simplifying the business of groceries.

Coles makes $39 billion in revenue and conducts 21 million transactions a week in stores and online.

“All of that generates a vast amount of data that allows you to optimise your business and to give an engaging experience to the customer,” Snizek said.

“Part of our job is to deal with the complexity, and to use technology to simplify our business, as much as we possibly can, for our customers and team members.”

Corporate Vice President of worldwide retail and consumer goods for Microsoft, Shelley Bransten told Business Insider Australia that the pace of innovation in grocery stores is increasing.

“Increasingly, the consumer is in control of retail,” Bransten said.

“They are demanding more transparency from retailers.”

“They want retailers to take the friction out of the shopping process and they’re wanting a more personalised experience.”

“As part of this partnership, we’ll be looking at all of those angles and how we can make checkouts faster and smarter.”

“How do we look at specific stores and what’s interesting to those geographies [for example] dietary restrictions?”

“How do we understand and share with consumers where their food is coming from?”

“In all of those ways, cloud technologies will enable Coles to deliver a better shopper experience.”

“In some ways when personalisation is really great we don’t even know its there.”

The partnership comes after Coles announced a deal with online supermarket Ocado to build automated centres in Sydney and Melbourne to speed up its online order fulfilment.

* Sharon Masige is a reporter at Business Insider Australia. She tweets at @SharonMasige.

This article first appeared at www.businessinsider.com.au.

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