Monitor: A digital rethinking of natural retail stores, starring AI

We’re all a little tired of the artificial intelligence hype by now. But love it or hate it, AI is destined to be a paramount, if not inevitable, tool that both retail conglomerates and smaller, independent stores will have to learn how to wield if they’re going to survive—and thrive—in the coming years.

AI’s capabilities for retailers extend well beyond the Google-like mine sweep that is ChatGPT. AI programs can stretch natural and organic retailers’ limited resources, compensate for smaller staffs as hiring continues to be challenging, and help stores optimize supply chains, manage inventory and prevent crime and fraud. Perhaps most importantly, in this era of personalized marketing and shopping, AI can track and address shoppers’ needs with laser precision. That feature will be crucial as retailers move toward omnichannel penetration.

Even so, many retailers are eyeing the technology warily, weighing concerns about data privacy and responsibility with AI’s promises. Carol Spieckerman, president of consulting firm Spieckerman Retail, says they’re right to tread lightly. “We’re very much in a ‘just because you can doesn’t mean you should’ environment in which consumers will embrace some personalization initiatives with open arms while pushing back on others that feel intrusive,” she says. “Retailers and brands must be willing to test, learn and, in some cases, tap on the brakes.”

At The Vitamin Shoppe, where COO Andy Laudato describes omnichannel as “all about letting our customers shop how, where and when they prefer.” AI is crucial to personalizing shoppers’ journey: It groups customers based on demographics and develops precision marketing using data from loyalty programs, purchasing history and other information they choose to provide.

Laudato, who envisions The Vitamin Shoppe customer experience as an amalgamation of Apple stores’ elegance, Nordstrom’s renowned customer service and Amazon’s quick-and-easy online shopping, is quick to point out that the retailer is still in the earliest days of creating a personalized journey for customers—who may or may not be ready to succumb to the algorithm.

“It is what we call an opt-in world where people will, if they see the value, share information with The Vitamin Shoppe because they get value from that—more personalized recommendations on nutrition plans, on supplements, on sports nutrition,” Laudato says. “It’s something we’re balancing very carefully, but customers are really looking for that.”

To learn more about retail tech and how technology is transforming the supplements industry, check out the February issue of Nutrition Business Journal, available for purchase now.