Farmstead adds prediction capabilities to grocery e-commerce service

Dive Brief:

Online grocer Farmstead has partnered with personalization technology company Halla to provide food retailers with the ability to customize their e-commerce offerings for consumers, the companies announced in a joint press release on Monday.
Farmstead, which provides e-commerce capabilities to grocers through its Grocery OS service and also runs its own grocery delivery business in several states, will use Halla's "taste intelligence engine" to predict what shoppers will want to purchase, with the goal of driving increased sales and basket sizes.
Farmstead's announcement that it is deploying Halla's technology comes as the e-grocer rolls out a suite of services aimed at helping food retailers rapidly build dark store operations.

Dive Insight:

The personalization technology added to Farmstead's Grocery OS package will allow the e-grocer and its client retailers to recommend products, provide search results and offer substitutions aligned with people's preferences, according to the press release.

The new capabilities are designed to help online grocers increase sales while providing shopping experiences tailored expressly to consumers' individual preferences, said Pradeep Elankumaran, co-founder and CEO of Farmstead. The technology from Halla enhances Farmstead's ability to provide e-grocery services that help shoppers find what they want efficiently, he said.

"I would argue that Halla and Farmstead have a better customer profile of their customers than any [brick-and-mortar] grocer actually does," said Elankumaran. "And when we present a pitch to a customer saying this product or these set of products is relevant ... it's a more relevant, more actionable pitch than anything you can do in a store."

Taken together, the ability of Halla's technology to predict what shoppers will want to buy and Farmstead's inventory management system are designed to step up Farmstead's ability to help grocers minimize out-of-stocks and match their inventory to what consumers are likely to purchase, ultimately encouraging customers to buy more goods, according to Farmstead and Halla.

"Bigger baskets [lead to] greater average order value for the grocer, a little bit more stickiness among their customer base but overwhelmingly ... inspire and delight the shopper who's now discovering new products," said Spencer Price, co-founder and CEO of Halla. Price said that in addition to Farmstead, Halla works with the majority of the top 10 U.S. grocers by revenue, but would not name those retailers.

Farmstead has already been using its own artificial intelligence technology to manage inventory and reduce food waste in an effort to efficiently provide grocery delivery services. Earlier this month, the company, which has marketed e-grocery software to third-party food retailers since 2020, said it had started offering to link clients with warehouse space and "multiple" last-mile delivery services. Grocers can have a dark store operation up and running in as little as two weeks using its services, according to Farmstead.