Online grocery shopping is exploding, driven by the desire for both convenience and availability. Given their preference for convenience, digital integration, and mobile apps for shopping and meal planning, Gen Z is leading the charge toward online grocery adoption. As they move into adulthood and increase their grocery spend, they value the control that digital shopping provides.

But Gen Z is not the only generational cohort buying groceries online. Boomers in particular trust retailer shopping apps, appreciating the ability to compare prices, use discounts, and find what they’re looking for. The next generation of digital shoppers look beyond daily or weekly grocery runs and are increasingly shopping for food online.

Grocery e-commerce is forecast to grow 5% in 2025. In the US alone, approximately 138 million people are already shopping for groceries online.

Online grocery sales have increased over 31% since 2024, and the share of online grocery shoppers is expected to keep rising until at least 2030.

Despite the increase in online grocery shopping, currently only 1% of shoppers do all their shopping online with another 7% doing most of their shopping online. Overall, however, 90% of consumers buy their groceries both online and in-store.

From delivery service to buy-online-pickup-in-store (BOPIS) to subscription models, today’s grocery shoppers have more buying options than ever before.

And customers want their grocery shopping experience to be easy, convenient, and tailored to their preferences. Most shoppers now consider customization to be the standard. According to McKinsey, more than three quarters are actively irritated when their buying journey isn’t personalized.

To remain competitive, today’s grocers need to accommodate how and where customers want to shop. A responsive online presence is no longer a nice-to-have, it’s a basic requirement: lagging behind risks obsolescence. To stay ahead of the competition, market leaders must provide AI-driven grocery shopping experiences.

Algolia’s intelligent grocery solution helps grocery stores modernize with the latest AI-powered technology built for the next generation of shoppers.

Intelligent Grocery Solution: Higher margins, more conversions. Online grocery from an AI search leader. Get search that convert

Chapter 2: The future of grocery

Grocery leaders are under constant pressure to grow their business, build customer loyalty, and protect their margins, all while keeping costs down. Currently, they face a myriad of challenges:

• Threats to the supply chain: In addition to navigating the still-turbulent global supply chain, grocers are also vulnerable to disruption due to rising geopolitical tensions and extreme weather events.
• Rising prices of goods: As costs go up, profit margins shrink. The grocery industry operates with already-thin margins, with little room to maneuver.
• Lost retail media opportunities: Retail media has remarkable revenue potential, but many grocers don’t properly utilize it.
• Market disruptors: Amazon, Walmart, and delivery-first startups are changing the grocery landscape.
• Lagging AI adoption: Most grocers are still relatively behind when it comes to implementing AI-powered tools.

But that’s not the whole picture.

Grocery shoppers also experience their own pain points:

• Rising grocery prices: In an uncertain economy, shoppers search for deals and compare prices.
• Poor digital experiences: Irrelevant results and missing or out of stock products leads to frustration and may cause customers to abandon carts or even switch grocery vendors.
• Lack of personalization: Generic results are equally frustrating, particularly when customers are searching for specific items or brands.
• Substandard integration of multiple models: Shoppers want a combined approach that works seamlessly (e.g. mobile app discovery + real-life visits + BOPIS + delivery).

Grocers need a personalized digital presence that responds swiftly to changing demand. Algolia’s intelligent grocery solution helps grocers improve the customer experience and bolster their bottom line with:

• Personalization that matters in the moment of purchase
• Interactive experiences that enhance both online and instore visits
• Responsive and conversational AI Shopping Assistants created in Agent Studio
• Relevant content produced by generative AI

Increase your margins and make it easy for your shoppers to find and buy what they need with Algolia’s intelligent grocery solution.

Chapter 3: Algolia’s intelligent grocery solution

Speed, simplicity, and self-service are three of your customers’ top expectations. Regardless of whether they shop online or in store, shoppers want to check everything off their grocery list as easily and quickly as possible.

To achieve this, shoppers require well-constructed apps that bridge the digital and physical grocery realms. When implemented correctly, these grocery shopping solutions build customer loyalty, increase basket sizes, and boost order frequency.

Algolia’s pre-built, ready-to-implement tools help you connect your customers to the products they’re looking for. Designed for the unique needs of grocery shoppers, Algolia’s intelligent grocery solution generates catalog information, makes real-time recommendations, and guides customer choices.

Make it easy for your customers to find and buy what they’re looking for.

Algolia’s AI-powered digital tools enhance the customer experience, delivering smart personalization and inventory-aware search. Our intelligent grocery solution helps you create a smooth path from discovery to purchase while our intuitive, predictive, and frictionless capabilities improves conversion while lowering your operational load.

Chapter 4: AI personalization for the grocery shopper

Grocery shoppers gravitate towards personalized and easy-to-use shopping experiences. Algolia’s intelligent grocery solution tailors each shopper’s search results, using not only their previous sales history but also their current usage to provide accurate and relevant recommendations.

Customers expect personalized shopping interactions, and don’t hesitate to abandon their carts when search results don’t adapt to their needs. Algolia’s neural search capability helps customers translate their general intentions into real choices. The ability to immediately respond to signs of interest makes discovery easier by instantly tailoring results to suggest the most appropriate products, even across categories.

Instead of generic keyword results, tailored and predictive recommendations transform routine grocery orders into thoughtful, curated baskets. Customers feel appreciated when their sales history, personal preferences, and dietary requirements are remembered, building customer loyalty.

Algolia’s Personalization adapts to shopper intent and can shift context in near real-time, capturing and responding to in-session behaviors. The ability to immediately respond to signs of interest transforms each user interaction into an opportunity for conversion.

Adaptive personalization shortens the path to discovery and reduces user frustration without slowing your search function. Well-timed and relevant recommendations increase both conversions and average order value. You can tailor promotions and discounts to the right shoppers at the right time, increasing margins without pricey marketing campaigns.

Personalization also takes in-stock inventory into account. Data analysis can predict customer demand and surface overstocked items in real time allowing grocers to minimize spoilage, reduce waste, and improve profitability.

Chapter 5: Enriched ‘click-and-mortar’ experiences

Making meals is a tactile experience: shoppers like to feel the ripeness of vegetables or smell fresh bread. If they order online, they expect premium quality and fresh produce.

Grocery is already heading to a hybrid retail strategy: customers can combine online discovery with in-store shopping, BOPIS, curbside pickup, and delivery models. These models require a natural, mobile-first solution, one with greater capabilities than traditional search.

Among age cohorts, digital-first Gen Z has quickly adopted online grocery shopping. They are more likely to discover grocery products browsing online than on store shelves. When they frequent brick-and-mortar stores, they often use a mobile device to check reviews and compare prices while making in-store purchases. This “click-and-mortar” approach means grocers must deliver a seamless, personalized, omnichannel experience.

Shoppers now see personalization as standard when it comes to shopping online. In fact, 76% of customers are actively displeased when personalization is not offered. The ability to search in-store further personalizes the shopping experience for each customer.

Algolia’s intelligent grocery solution comes with automated inventory location indexing, so customers know immediately if an item is in stock. Real-time stock visibility and inventory-aware discovery ensures that shoppers always get everything they order, and also boosts demand forecasting for the grocer, improving the experience at both ends of the process.

An omnichannel approach also offers retailers the opportunity to add retail marketing revenue streams, delivering dynamic content at the moment of purchase

Chapter 6: AI agents & assistants

Shopping Assistant transforms your search into a conversational tool. It provides your customers with an instant, intuitive search that interprets queries in natural language, whether those queries are typed, spoken, or even uploaded as an image.

When customers search, stop, and query on your site, each micro-interaction helps Algolia’s AI-powered solution. Every encounter adds more data to help customers not only find but also compare and evaluate different products.

More than a search result, it’s like providing your customers with a branded personalized assistant which directs them to the items they want and also suggests items they may not even know they need.

Suppose a shopper enters a query like “a meal for four using ground beef.” The result will surface not just current ground beef products, but also recipe suggestions complete with complementary side pairings. If a specific recipe is selected, the assistant suggests a list of ingredients to add to the shoppers cart.

The AI assistant can return with questions to further refine the search, such as ‘are there any dietary restrictions?’ If the shopper adds ‘gluten-free’ to the query, the AI assistant surfaces new meal suggestions and item results. As more data is introduced, the predictive models rapidly improve, better accounting for each shopper’s interests and contexts.

The capability to search by image makes it even easier for your customers to find what they’re looking for. Not only can the AI assistant parse and process an image of a handwritten shopping list, but it can also analyze a photo of a finished dish, detect the ingredients it contains, then direct the shopper to the appropriate items in the catalog.

Customers who use the AI assistant make almost 10% fewer returns and reduce their checkout time by 50%. Automatic inventory location indexing minimizes drop rate while AI tracking insights improve inventory management and demand forecasting.

Shopping Assistant is built on Algolia’s Agent Studio, our interactive sandbox for the rapid design and orchestration of custom AI agents. Hosting, compliance, boilerplate, and monitoring are all embedded, whether you build from scratch or an existing template.

You get a rulebook for how your agent performs and responds, and can customize tone, limits, and other elements.

When added to the Algolia Search tool, your agent is immediately connected to your data via indexes. You select the provider and model of your choice. Easy to test and adapt, with Agent Studio you can go live almost instantly, simplifying the shopping experience for your customers in a way that makes sense.

From forecasting demand to building shopping lists from images – Agent Studio’s versatility is only limited by your imagination.

Chapter 7: Produce content with generative AI

Gen AI can help you produce customized content to increase conversion and guide shoppers through their entire buying journey. Based on manufacturers’ product specs and your existing data, you can automatically create category and product descriptions, informational shopping guides, and more with little manual effort.

Grocery teams regularly receive new products and vendor updates. Using pre-built helper functions, you can connect popular Gen AI clients to the Algolia platform. Algolia’s Data Transformations can enhance data before it’s indexed by having Gen AI write the descriptions for you. When you upload a new inventory list, the AI uses the manufacturer’s product data to automatically write detailed descriptions for each item, saving valuable time.

Algolia Shopping Guides can add rich, helpful content to the online shopping journey. Shopping Guides use GenAI to create informational shopping guides and full articles about subjects ranging from nutrition to seasonal recipes to brand comparisons. These AI-generated guides broaden product context, deepen brand affinity, and drive return visits and larger baskets.

Chapter 8: Transform grocery shopping with Algolia

Grocery shopping should be easy. With Algolia’s intelligent grocery solution, you can help shoppers get exactly what they want, fast. With a combined ‘click & mortar’ omnichannel approach, you can increase basket size, build customer loyalty, and boost profit margins.

Transform the way your customers shop for their everyday needs.

Our intelligent grocery solution helps you:

• Amplify your merchandising campaigns
• Open new retail marketing revenue streams
• Boost your margins with more efficient discovery
• Keep costs under control
• Reduce friction and increase customer loyalty

Grocery retail demands convenience and speed. Algolia’s intelligent grocery solution combines real-time semantic search, personalized recommendations, and inventory-aware discovery to make the digital grocery shopping experience simple but efficient.

See how Algolia is transforming grocery. Deliver better shopping experiences for your customers with Algolia’s intelligent grocery solution.

Learn more