AI Success at Retail Will Require Human Element

Originally printed in the July 2023 issue of Produce Business.

It seems that AI (artificial intelligence) has been dominating the news, touching every aspect of our daily life. The controversial topic has been shown to possess many positive attributes for business, but has also been linked to various concerns about its ability to replace human activity. There have also been concerns as to the use of AI ethically in various industries and throughout education. There is no doubt that AI will have a major effect on all our lives going forward.

The key to this newfound technology is the ability to determine the best possible uses for it within the framework of overall society. Upper management seems to embrace this new technology, as it is number-based like many other systems they use. This groundbreaking technology offers many ways to improve profitability and efficiency, always popular concerns for upper management. They seem willing to accept this new technology for technology’s sake and incorporate it into all their planning and operational activity, without concern for any negative effects.

As we have always maintained, produce is a unique department and one that does not fit easily into technology without careful analysis and examination. This situation, once again, shows when it comes to produce, upper management “just doesn’t get it!”

In the initial analysis, AI offers many things that can help the produce operation meet its goals. It can provide the numbers and direction for the procurement of products and the best methods for negotiation. It can provide crucial analysis on the best method and effects of product pricing. It can also provide extra methods to increase the efficiency in transportation and warehousing. This technology would provide analysis and recommendations on temperature control, energy consumption, labor scheduling and maximization, and the most efficient delivery schedules.

While AI will continue to evolve at retail, human creativity and intuition must still be developed.

Beyond the analysis, AI would be able to propose an actual action plan to integrate all its recommendations. Additionally, it can promote analysis and provide direction on the latest trends in business and, from the consumer perspective, to provide an actionable strategy based on numeric and factual trends to take advantage of these opportunities.

Moving even further into the potential benefit from AI, it can mimic and utilize previous merchandising schematics and strategies based on movement, sales and profit, and can incorporate best practices to combine all of these factors and develop an analytically based merchandising strategy. It also has the capability to copy present merchandising and sales strategies into its overall action plan.

Another factor would be the in-depth analysis of trends in economic activity and overall business environment to further finetune these recommendations. All these activities and benefits show the potential value of AI on the numeric side of produce retail. Because of this, produce management must be involved in the decision on how best to use AI in their operation.
Now it’s time to discuss what really makes produce retailing unique in terms of its operation. Some people might call this the emotional side of produce, and this certainly deals with the factors other than analysis and “number crunching” that greatly affect the success of any produce operation.

As far as we have seen, this new technology seems to lack some key ingredients of a successful fresh produce operation on the creative side. At the present time, it doesn’t seem that AI has mastered the intrinsic and somewhat cosmic aspects of a successful produce operation. This would include the ability to create, innovate and nurture new ideas that intrinsically add value and appeal to the department. This is sometimes referred to as “a feel for the business” and is a highly valued attribute to any produce professional. It relates to the ability to visualize and create a presentation that appeals to customers’ senses, wants, needs and desires in terms of fresh produce.

Additionally, the new technology has yet to be able to provide the feeling of pride and satisfaction in the accomplishment of taking a creative, innovative idea from inception to reality that is the result of this artistic component of produce retail.

This part of the produce equation is no less important than the numeric side and needs to be of equal focus in the development of a successful strategy. The talent to get in touch with the creative side of produce is vital to differentiating your operation from the competition.

Soon, everyone will have access to the technology of AI and will be performing similar analysis on the numbers and drawing the same conclusions. This will result in many organizations formulating similar plans.

The value of individuals with intuitive, creative capability cannot be exaggerated and is absolutely necessary to continued success. This talent cannot be overlooked and individuals who possess it will be highly prized by any organization.

While AI may become a bigger force in retail and continue to evolve, the “human factor” must be utilized and developed to its highest level in order to offset the sameness of numerical and historic analysis. The successful produce retailer in the future will be able to harmonize both sides of this equation into an innovative and successful produce merchandising strategy.

Don Harris is a 41-year veteran of the produce industry, with most of that time spent in retail. He worked in every aspect of the industry, from “field-to-fork” in both the conventional and organic arenas. Harris is presently consulting. Comments can be directed to [email protected].