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The State of Grocery Technology in 2026 with FMI | 5IM · GrocerTalk

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  Foreigning us now for five insightful minutes is Jennifer Chago.
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  Jennifer is a longtime fan of the show and is presently the senior director of Technology strategy and programs for fmi, and she is here to give us her lowdown on the state of technology across the grocery industry.
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  All right, Jennifer, let's start with this.
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  To that point, FMI recently released the State of Technology 2026, which is your second report benchmarking the food industry's progress on technology.
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  The report's central theme is from adoption to advantage.
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  So my first question is, what the heck does that mean?
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  And then my next question is, why is the industry's technology conversation so important, and how is it changing right now?
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  So I think that, you know, over the last 10 years, the Conversation has been a lot about what should we buy, what should we build, where should invest, or do pilots.
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  And now that we're.
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  We're seeing that there are really significant investments happening in the industry, and it's more about how do they get the value out of those investments.
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  And that's really the central thing we tried to focus on in this report.
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  I think that the investments continue to be stronger than they've been in prior years.
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  We see more and more in that area.
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  There's 71% of food retailers are going to be investing in technology in 26.
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  So we're happy to see that.
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  And the progress that's made over the last 10, 15 years.
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  Yeah, I mean, to that point, that was actually gonna be a question I was gonna ask you is like, yes, 71% say that they're gonna increase their technology spending, which, you know, having followed the grocery industry for a
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  while, that, that is, that's.
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  That's a big number.
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  That's a big difference than where things stood before.
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  But yet, by that same token, the report also says that only 29% have a defined change management plan.
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  So how do you think about that gap and what's.
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  What's so important for the grocers to think about in terms of, you know, understanding that gap, too?
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  Yeah, I think that was one of the most interesting insights that came out of this report.
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  And it really does tie to the fact that we see people trying to figure out how to get the value out of the investments.
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  And so I think our retailers and our CPG suppliers are really seeing that they can put a tool into an environment, but getting the maximum out of it takes getting the people aligned to what the project is helping,
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  understanding the workflows that are changing as a result of this technology being installed.
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  And really looking at that across an organization.
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  So that's a huge opportunity and I think that we're going to see more and more people building those plans.
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  You know, the 29% of people who had defined today would be compare should be compared to the 50% who are planning to build one.
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  So hopefully we'll see that gap close.
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  But that is a significant opportunity for the industry and I think it's also a significant opportunity for the technology solution providers to understand that gap and really work with the retailers or CPGs that they're partnering with to help
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  facilitate that.
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  Because they see a ton of these on integrations.
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  They've seen ones that go well, ones that don't go so well.
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  And so any insight they're able to lend to the retailers that they're working with, their CPGs they're working with, will all the better help facilitate the successful implementation.
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  Yeah, that's a great point.
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  The technology solutions providers have the advantage of seeing their solutions deployed across many different environments, across many different retailers.
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  So, Jen, will you all track, continue to track this going forward at FMI2 to make sure that the industry is doing what it needs to do?
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  Because at the end of the day, it does come down to people, process and technology, not just technology.
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  Yeah, absolutely.
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  And I think we're going to continue to expand on the research.
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  This was the first year that I think we kind of clicked down a couple more levels.
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  So not only just in the technologies, I think, you know, in the past we might have looked at a few different technologies, but they're changing all the time.
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  So we're going to keep our benchmark, especially around this area, and then continue to develop it as new technologies emerge.
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  You know, think about agentic AI.
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  It's changing every second.
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  So I'm sure we're going to have a bunch more stats that we're going to want to follow there.
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  But we're really interested in doing that in order to help people identify where we're having successes, where we have opportunities as FMI and as an industry to work together and see how we progress over time.
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  It's great fodder for good executive level conversations, particularly at FMI Midwinter.
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  That's coming up.
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  Absolutely.
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  All right, the next thing I want to ask you about is company size, because the report also identified that as a major fault line, as a major separator.
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  So what, what in your mind, Jen, separates the technology leaders from the laggards and what can the small food retailers, which there's a lot of them in the US what can they realistically do to close the gap?
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  I try to think about what's what a retailer of different size needs for their organization and I think that it's really important for them to understand what their operation needs.
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  So what a large retailer is doing is not necessarily the best fit for a small retailer.
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  I think that for small retailers, finding a use case to start with and then reverse engineering what technologies they might need to accomplish a change in that space is probably a really good place to start versus trying to
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  boil the ocean.
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  And then I think it's also interesting the research pointed out too that the mid market regional retailers are actually really punching above their weight and in many cases even more advanced in some of their deployments than some of
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  the larger retailers.
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  So it was really interesting to see that level of detail in the research and for us it helps point us to where we need to lean into certain communities more.
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  I.
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  Was going to let you go on that question, but now I got to ask you a follow up.
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  So like if the mid market retailers are seeing success, what are one or two examples where they're, you know, seeing their technology investments pay off?
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  I mean is AI gets all the headlines?
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  Is it that or is it other things?
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  No, I don't think it's just AI.
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  I mean I think that fresh food inventory planning is definitely machine learning and AI driven for the most part.
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  But I think AI analytics and cybersecurity as well is another area that was surfaced.
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  But I think in terms of the fresh food inventory planning, that use case has been in market for a while now.
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  That was an area that very interestingly where we early were early adopters, well before we were really talking about AI in every single conversation we were actively using AI in that space.
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  So it's also just really interesting to see where the industry has leaned in and where we're really advanced for our our industry compared to other retail spaces even.
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  Got it.
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  What what's been going on on the shrink side of things in the grocery industry.
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  Jen, any insights you can share from the report there?
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  Yeah, shrink is one of the standout areas that has been most successful where people have implemented it.
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  So we actually saw for food retailers specifically, 85% of them think that they have a somewhat successful in store shrink reduction program in place.
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  So that was an area that was a standout for sure.
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  And I think data analytics is another area and they're using it for all kinds of different use cases.
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  So anywhere from like assortment to customer data loss prevention, even promo management.
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  I think that's going to be replaced more and more by AI as we continue to see these reports come out.
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  But I think those are good places where there's some strong foundation to build on there.
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  There's some good traction there.
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  All right, so for those listening that maybe want to access the report, what's the best way for them to do that?
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  Yeah, check out the report.
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  It's on fmi.org and you can also use our tool research AI to get insights and ask questions, too.
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  All right.
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  Well, thanks, Jen.
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  That was great stuff.
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  Really interesting.
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  Yeah.
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  Thank you.