Adapting To Change: Supermarkets Leverage AI To Meet New Zealand’s Evolving Consumer Needs
By Michael Summers-Gervai, Director, Business Consulting, Ernst & Young, New Zealand
According to the latest EY Future Consumer Index, 95 percent of New Zealand consumers are either cautious, concerned or downright pessimistic about their current financial outlook, which is having a flow-on effect on how and where they spend.
With consumers' growing financial concerns, it’s critical that supermarkets optimise their supply chains and customer service offerings.
The key to navigating supply chain challenges
New Zealand’s supply chain and logistics challenge – a small population stretched across two long, thin islands at the bottom of the world – is undeniably a hard nut to crack. Despite the challenges, customers have high expectations for swift delivery, with 20 percent citing slow shipping as a deterrent for future online purchases.
Some retailers already use AI to standardise processes, optimise last-kilometre delivery and improve the customer experience. EY studies showed AI adoption at 62 percent globally in supply chain sustainability tracking and measurement, and 40 percent of supply chain organisations are investing in Generative AI.
By analysing purchasing trends and consumer behaviour, AI allows supermarkets to fine-tune their supply chains in real-time, minimising over- and under-stocking.
Using Gen AI, supply chain leaders can classify and categorise information, quickly analyse and modify strategies based on real-time data, summarise large volumes of data, and integrate AI into the building blocks of supply chain operations – plan, source, make and move.
Utilising AI in supply chain management will improve operational efficiency and reduce food waste. This issue is of growing importance for Kiwi consumers, with 86 percent believing wasting food is wrong and increasingly factoring sustainability into their shopping decisions.
Future of supermarket shopping
AI has proven to be a game changer for customer experience, both online and in-store.
AI can also personalise the online shopping experience. Personalised promotions, product purchase reminders, and automated responses are among the most trusted applications for Kiwi consumers.
A significant 58 percent of consumers exposed to AI while shopping online report that it has improved, at least a little, their shopping experience. Recommending products based on previous purchases improves customer satisfaction and increases basket sizes.
AI-driven chatbots and virtual assistants are also transforming customer service. They offer real-time support, answer queries, and resolve issues quickly, making the shopping experience more seamless both online and in-store.
However, implementing AI in customer-facing roles is not without its hurdles. Supermarkets should ensure their AI integration is user-friendly, continuously updated, and integrated with human customer service agents for more complex queries.
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