Supermarkets sometimes have packers at checkout lines to help bag groceries. Today, markets more urgently need pickers — people who comb the aisles for items ordered online.
Every step in the food e-commerce process is complex, from building and managing a user-friendly website that reflects constantly changing prices and inventory, to personalizing special offers, fulfilling orders accurately and restocking shelves.
“E-commerce for groceries is very different than for apparel and consumer electronics,” said Orlee Tal, CEO of Israeli retail-tech company Stor.ai.
As the company’s name suggests, it uses artificial intelligence (AI) in creating and supporting food retailers’ end-to-end online operations.
“Grocery shopping online evolved as a separate entity to in-store grocery shopping,” she said. “We help grocers create the same customer-first experience across all touch points, online and in-store.”
That involves integrating into in-store point-of-sales and customer loyalty systems, with wholesale suppliers and with third-party payment providers, text message providers and delivery providers.
Store.ai’s Picker-App customizes and maps in-store grocery fulfillment. Advanced outbound marketing tools communicate with customers in a targeted way to encourage trying the service and returning again and again.
“The shopper doesn’t get a random set of results, but results tied to lifestyle, history and frequency of buying,” said Tal.
Business intelligence insights are mined from the data to help the wholesaler and retailer improve operations. Inbound marketing tools connect the retailer to the consumer packaged goods supplier (CPG).
“Much of retailer profitability depends on trade funding from the CPG, so we enable advertising on their platform to get more trade funding. It’s a complex ecosystem,” Tal said.
COVID ramped up online grocery shopping
Store.ai founder Yossi Rabinovitz believed in the potential of online grocery shopping long before it caught on with the public, said Tal.
Shoppers were reluctant to order food, especially produce and baked goods, without seeing, smelling or touching. Grocers were reluctant to add pickers and deliverers to their payroll.
“COVID changed everything,” Tal said. “Now online orders account for 10 percent of overall [grocery] sales, and analysts say it will double in three to four years. So the online part of their business is essential for their survival and there’s no room for bad decisions.”
Launched in the Microsoft Accelerator in 2014, Stor.ai works with large, medium and small retailers in more than 350 locations, most prominently North American supermarket chains such as Piggly Wiggly, Met Fresh and Gourmet Garage.
“It’s a battle-tested platform helping independent grocers through the digital transformation,” said Tal.
In Israel, the platform is employed by eight of the 10 largest grocers and many small grocers countrywide.
With $21 million in Series A funding raised in March, Store.ai is expanding in its main target market of the United States, as well as to the Gulf States, Latin America and Europe.
“We push grocers to start this online business early because it takes time to learn the technological sophistication and get it right in terms of customer satisfaction and profitability. The more you use the tools the better you become at it,” Tal said.
Partnership with Unilever
Stor.ai also has a growing partner base including mega brands Unilever, Toshiba Global Commerce Solutions and Microsoft.
“We see that wholesalers and CPGs are looking into communicating with retailers and end customers,” said Tal. “They are in charge of selling to the stores and we are in charge of the technology behind it.”
To gain business intelligence from the growing number of shoppers favoring smaller, local grocery stores rather than large chains, Unilever started the Shopo hub, where Israeli customers can search for markets that serve their area. These markets can offer an ecommerce option from which Unilever gleans valuable data.
“In Israel, we have 113 locations on the Unilever Shopo platform,” said Tal. “You can see a lot of Arab-owned shops; everybody is there. It’s important to me that it’s a place where we all communicate.”
The digital transformation of supermarkets is served by a wide range of companies, among them Israeli startups such as Anagog and Trigo Vision.
“The comprehensiveness of our solution, our ability to integrate into internal systems, is what differentiates us,” said Tal. “With our order fulfillment solution alone, no competitor comes close. We have strong live dashboards for grocers to manage this growing business and for CPGs to ignite the relationship.”
She said that e-commerce has been around since the beginning of the century “but it’s not a detached solution anymore. It’s part of a full solution.”
Store.ai is based in Ramat Gan, with an office in New York, and has 60 employees.
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