[NRF 2024] Sainsbury’s adopting AI across its business.


Sainsbury’s is experimenting with AI in various parts of its business as it seeks to deploy the technology with the primary objective of boosting the experience of the customer both online and in-store.


Speaking at Retail’s Big Show, organised by the National Retail Federation (NRF), in New York City Clodagh Moriarty, chief retail and technology officer at Sainsbury’s, highlighted how any use of the technology must have the strategic imperative of delivering on three areas – value for money, availability, and the ease and speed of the shop.


The supermarket group has been addressing availability through a partnership with Blue Yonder on its supply chain. “It’s had an immense impact involving 10-times more demand factors being employed. This has delivered an almost two per cent improvement in availability,” says Moriarty.


The benefits were visible in the company’s warehouses during the crucial festive period: “The joy of this peak was clean, clear and sharp warehouses. This led to customer benefits, sales benefits and also cost benefits.”


At the front end of the business in its stores the check-out has been recognised as a big opportunity for AI. The company has been rolling out smart scales that can identify products, through a partnership with NCR, which “has transformed the front end. “We’re deploying AI to increase the speed but also improve the overall customer experience,” says Moriarty.


The technology is also feeding into addressing the major issue of shrink. Sainsbury’s undertakes a number of random and targeted rescans at its tills to reduce shrink. By deploying AI it is able to stop the rescanning of customers who it can identify as good customers from their previous activity in its stores.


One of the challenges for the supermarket has been the integration of these new technology solutions in its existing infrastructure. “You can’t just plug anything in. It’s been very clear we’ve a legacy. All this fabulous change needs to work with our Victorian plumbing. You need to assess all this beforehand,” she explains.


Sainsbury’s has also been experimenting with Microsoft’s Copilot – an AI companion – to improve the efficiency of meetings as it enables the interrogation of data from the business and helps determine follow-up steps. Moriarty can see the value in ultimately having this capability in “colleagues’ pockets to give each of them this enterprise knowledge”. “Data has the key role, whether that is at the depot or back room or in-store. We can bleed a little AI into all stages,” she says.


Moriarty points out that five years ago Sainsbury’s undertook a programme that ensured most data was in a sole repository from where it could be consumed across the company. With the power of AI tools it is now possible to mine all this data from an expansive pool rather than having to curate it into a manageable amount first. 


The company has also been using AI on its loyalty programme Nectar to better personalise the experience for its customers and keep them engaged. Part of this has involved incorporating gamification such as highlighting that a customer might be the biggest buyer of a certain product in their area. 


Sainsbury’s is very aware that such activity has to be handled very sensitively – particularly around data and privacy. “We take data very seriously. We know how our customers trust us. Right now our customers buy into sharing their data with Nectar, which then enables them to use Scan & Go and enjoy the differential pricing. The QPQ is that we use that data for better ranging etcetera,” explains Moriarty.


She is also cognisant of the fact that the supermarket is very much a people business and that AI should not detract from that. “We’re a people centric business. We’re bringing people and technology together. I think about it as being an ‘and’ and not an ‘or’. We combine AI with the teams in Sainsbury’s,” says Moriarty.