Dive Brief:

• Consumers are especially interested in the ability of artificial intelligence to help them save money when shopping for groceries, manage their budgets and enable retailers to provide personalized rewards and suggestions, according to data from the latest wave of Dunnhumby’s Consumer Trends Tracker released Thursday.
• Shoppers under 45 are more likely than older consumers to trust AI and to want to use the technology to engage with retailers, Dunnhumby found.
• AI holds particular promise as a way for grocers to connect with shoppers as many consumers struggle financially and deal with food insecurity, the research suggests.

Dive Insight:

AI is rapidly emerging as a key tool for retailers to demonstrate a commitment to helping shoppers afford groceries at a time when consumers — especially younger ones — are becoming increasingly receptive to technology that provides them a customized shopping experience, Dunnhumby’s research shows.

Forty-six percent of participants in the research said they thought the top use case for AI among grocers was security, followed by the ability to generate personalized rewards and recommendations (45%) and budgeting (42%).

More than half (52%) of shoppers in the survey said they identify themselves to grocers to redeem rewards, a figure that was up 4 percentage points from the previous wave of the Consumer Trends Tracker. Forty-seven percent of respondents said they redeem coupons or deals from a store’s loyalty program, while 39% use a retailer’s app, Dunnhumby found.

Among people under 45, 58% said they think the most appealing use for AI is to generate personalized rewards and recommendations, just ahead of budgeting (57%).

Dunnhumby’s latest findings, which constitute the fifth wave of the Consumer Trends Tracker, reflect responses from about 2,000 shoppers the data analysis firm interviewed in August. The firm has collected data from more than 10,000 consumers since it launched the tracker in 2022.

The latest data from Dunnhumby paints a stark picture about the financial condition of U.S. grocery shoppers. For the first time since the Consumer Trends Tracker began, more than a third (33.7%) of participants said they have cut or skipped meals because they didn’t have enough money to buy food. Among people with children at home, the figure was 42%. 

People also highly correlate grocery shopping with a sense that food prices are rising rapidly and believe that inflation is much higher than government statistics show it actually is, continuing a trend that has persisted even as inflation has rapidly come down. Respondents to the latest iteration of Dunnhumby’s tracker said they thought grocery inflation was 22.1% even though the actual rate was only 3% when the survey took place.

The perception among consumers that food prices are galloping ahead, combined with the financial stress many are confronting, has created a ripe environment for grocers to tap AI to tailor their pitches to shoppers.

Fifty-six percent of respondents to Dunnhumby’s most recent survey said it is “very or extremely important” that they receive rewards from a retailer in exchange for their business. Meanwhile, 52% of respondents said they shop around to find the best prices, up 8 percentage points from the previous wave of the tracker. In addition, more than half of participants said they look online for prices before or during their shopping trip.

Dunnhumby noted that stores that score highly in terms of personalization have a greater share of wallet and deeper emotional connection with shoppers than other retailers.

While younger shoppers appear eager to take advantage of artificial intelligence-driven services that promise to help them stretch their grocery budgets and receive customized offers, older shoppers in the research said the best way for grocers to use AI technology is to improve security. Among shoppers 55 and older, 40% said they found activities like store surveillance, theft prevention and fraud detection are the most appealing applications for AI, Dunnhumby found.