AI Projected to Generate $113 Billion in Value by 2025

Tim Denman
July 13, 2023

At a Glance

  • AI will add $113 billion in value to the grocery industry by 2025.
  • 82% of grocers report that adopting AI will be a necessity to compete in the future.
  • 73% of grocers expect AI to be embedded in most, or all, of software in the next three years.
  • 83% of grocers believe the supply chain is the business function benefiting the most from AI empowerment.

Artificial intelligence (AI) is redefining the grocery industry. It is currently embedded throughout the grocery tech stack, helping streamline operations and supercharge the customer experience, and its influence will only grow in the coming years.

According to Grocery Doppio’s recently released “The Times They Are A-Changing: Impact of AI in Grocery” report, grocers expect to increase their spending on AI-powered capabilities by 4x by 2025. And nearly three-quarters (73%) expect AI to be embedded in most, or all, of their software in the same time period. In addition, 82% of grocers report that adopting AI will be a necessity to compete in the future.

We asked grocers where they believe AI will have a high impact, and not surprisingly, 83% said that the supply chain is an area that is benefiting and will continue to benefit from AI empowerment. Among the greatest use cases for AI in the supply chain, according to grocers, are inventory forecasting and optimization, warehouse automation and robotics, and logistics optimization.

Other key areas where AI is having a high impact include merchandising (named by 81% of grocers), marketing (named by 72% of grocers), store operations (named by 63% of grocers), and customer service (named by 56% of grocers).

Interestingly, just 31% of those surveyed believe that AI will highly impact IT/technology. Obviously, IT teams are developing and deploying AI-powered solutions for the enterprise, but AI is not having a massive impact on workflow. Top use cases for AI by IT/technology teams include co-piloting coding, process automation, system optimization, and predictive maintenance.

While AI’s power and use-case potential are undeniable, many grocers are still facing internal roadblocks as they look to develop and implement the technology. We asked grocers what are the top AI adoption challenges they face and the top responses were budget availability (named by 71% of grocers), unclear ROI (named by 69% of grocers), and limited infrastructure (named by 63% of grocers).

Grocers might struggle to receive funding for their AI projects today, but that roadblock should evaporate in the coming years. According to the report, by 2025, artificial intelligence adoption will drive $113 billion in additional value in the grocery sector. That kind of ROI should make internal budget struggles a thing of the past.

According to those grocers surveyed for the report, the supply chain will receive the greatest value with an increase of more than $58 billion in value expected by 2025. Merchandising ($21.2 billion), marketing ($15.7 billion), and store operators ($13.8) round out the top four functions that will received the greatest increase in value thanks to the adoption of AI.

The “The Times They Are A-Changing: Impact of AI in Grocery” report research report was produced in conjunction with Grocery Doppio’s recent “AI in Grocery” virtual event. The event featured speakers from Giant Eagle, Wakefern, Mars, and many more. All the educational sessions are free on-demand on the event website.