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Daily news and analysis about the food tech revolution

Halla

COVID-19 Got Shoppers to Order Groceries Online, but Will They Keep Coming Back?

As COVID-19 has forced shoppers indoors, the growth curve of online grocery has suddenly accelerated, with downloads of popular grocery apps increasing by as much as 2000%. Shoppers who were previously hesitant to buy groceries online have found themselves now doing so out of necessity. It’s a bittersweet victory for online grocers who have long struggled to gain real traction.

But as the old adage says, “this too, shall pass.” The current crisis will subside, and when it does, it’s anybody’s prediction if grocery shoppers will retain their newfound affection for buying foodstuffs online. I believe that the outcome of that question will be determined by the kind of customer experience that online grocers deliver to shoppers now.

Here are three levels of effort that online grocers might want to focus on to make sure that experience will keep bringing shoppers back after the crisis has passed.

1. A functional platform and robust delivery capability is crucial

Online grocers with holes in their game need to scramble. They had better eliminate technical glitches, ensure that their back-end can support purchases in large volume, secure agreements with suppliers for gluts in demand, and validate that their pickup and delivery services are built to flexibly scale.

Even some very established players have seen troubles during this spike of new traffic. British online grocers like Ocado and others came face-to-face with this problem recently, as sites and apps repeatedly crashed under the weight of new users. Some ultimately had to turn new customers away, or create “virtual queues” just to use the service. Morrisons quickly updated its payment terms to make sure that deliveries from small suppliers would not be stymied by cash flow problems.

American retailers have rather famously faced logistics problems. Instacart, Amazon and others have been unable to meet their typical delivery commitments while Walmart, Target, and Amazon are all facing severe inventory problems on high-demand items.

While it’s understood that these are unusual times, online grocers should take a lesson and develop contingency plans for higher traffic. It’s a good time to take a hard look at both the technology and the support systems that you will need to service your new customers.

2. Make sure your shopping experience is easy 

Adoption of online grocery shopping to date has largely been driven by tech-savvy millennials. Provided that your online grocery shopping website and app have a half-decent user interface, these young shoppers will natively understand how to navigate them. But that may not be so true of those who have hopped on the bandwagon recently. Either way, ease and enjoyment of the online shopping experience can make or break loyalty to your online platform.

If your online shopping experience is not already as easy and smooth as it could be, now’s the time to change that. Products must be easy to find through search functions and intuitive shopping categories. Consider carefully how you are organizing product by category and sub-category, by brand, price, and even by lifestyle or dietary choices. Think about how to best present holiday and promotion items. If shoppers feel that it is difficult to find what they want, they’ll soon switch back to what they know.

Don’t neglect sign-up, check-out, and re-order, either. Think of online grocery as a means to “always have the customer in the store.” You can make shopping easier by proposing automatic delivery of common staples each shopper routinely purchases. The more seamless these routine functions are, the more customers will appreciate the convenience of shopping online.  

3. Make online shopping about personalization, imagination and discovery  

So what about online grocers who already have a functional platform that makes it easy for shoppers to get what they need? If you are one of these grocers, you are positioned to create not just a functional shopping experience, but an extraordinary one. Online grocery should not be just “a store on a website.” By making your online platform emulate something that it is not, you’ll miss out on making it something much better.

That something should include smart, personalized recommendations to customers. When a shopper puts fresh chicken breasts, bouillon cubes, and vegetables in their cart, you could recommend egg noodles for the chicken noodle soup they are making, but you could also suggest freshly squeezed orange juice or hot tea, honey, and ginger for whoever is nursing a cold. That vegan shopper who is always buying garbanzo beans and tahini will probably appreciate you suggesting the imported middle-eastern spices that just came in. And for that customer you know is looking to shed a few pounds, you could prioritize delicious, healthy foods that help him or her choose wisely. 

Henry Michaelson | Co-Founder, President & CTO at Halla 
While studying computer science at UC Berkeley, Henry co-founded Halla, a taste intelligence company that enables retailers to predict the personal preferences of their shoppers, all in real time. He is responsible for constantly improving Halla’s machine learning algorithm and for internal leadership, especially with respect to technology. Henry’s previous projects include machine learning based classification of supernovae in the UC Berkeley Astrophysics department, a speaking role in the Warner Brothers blockbuster comedy Project X, a three year stint as lead guitarist for Joe Banks, and a patented algorithm that has distributed over $7M in awards to mobile gamers.

Halla’s CEO is Trying to Netflix-ify the Grocery Aisle

Anyone who’s visited the cereal aisle of a grocery store knows that every time we shop for food, we’re bombarded with choice. Which product will be the best on for our tastes, our diets, and our family’s preferences?

That’s why I typically end up reaching for the same box of cereal (and jar of peanut butter, loaf of bread, etc.) every time. But some companies — like startup Halla — are trying to make grocery shopping a more individualized experience.

That’s why we can’t wait to hear Halla’s CEO Spencer Price speak at Customize on February 27th. To learn more about how Price is leveraging data to make grocery shopping a super personalized experience, check out his Q&A below. Then use code SPOON15 to get 15% off your tickets to Customize here!

Tell us a little bit about what Halla does.
Halla is a taste intelligence company that enables retailers to predict the preferences of their shoppers in real-time. Our enterprise APIs power highly-personalized shopping experiences across all retail environments, driving double-digit increases in basket size and customer retention for retailers across the globe.

There are lots of companies out there that facilitate online grocery shopping — how is Halla unique? 
We know that great recommendations lead to more purchases and better experiences, but existing options for retailers are costly, complicated, and ineffective.

Halla is different. We’re obsessed with understanding food. Because when we know food, we know people. And when we know people, we get to help retailers deliver delightful shopping experiences through deeper customer insight. 

Unlike anything else on the market, Halla is delivering food recommendations with more precision due to our proprietary data that’s able to break food items down to the molecule. With a deep understanding of each item we’re then able to make smarter recommendations based on the human experience, such as delicious food pairings or individual dietary restrictions.  

What are the benefits of a personalized grocery shopping experience, both for the retailer and the consumer?
Think about the Spotify ecosystem, versus Apple Music or YouTube. Think about the Netflix interface, versus any other streaming platform. When personalization is deeply integrated into the user experience, it leads to significant increases in conversion rates, customer retention, and all-around engagement.

So, shoppers will see only the items that are relevant to them, and will be inspired to discover new products — all while helping complete their cart as efficiently as possible. The retailer sees bigger baskets, happier customers, and has finally created a shopping environment that drives true shopper loyalty.

What do you think personalized food or drink will look like 5 years down the road?
While there are many efforts and initiatives in “standardization” — as opposed to personalization — like we see in protein bar brands, all-in-one shakes, and the likes of Soylent, there are still over 30,000 unique products in the average supermarket, and counting. The need for “product navigation”, “product discovery”, and personalization solutions will only continue to grow. How precisely this will manifest remains to be seen.

One choice that is easy to make is whether or not you should join us at Customize (hint: you should). Use code SPOON15 to get 15% off your tickets here.

FutureProof Retail to Add AI-Based Grocery Recommendations From Halla

FutureProof Retail, which provides mobile checkout technology for grocers, announced today that it will incorporate Halla’s AI-based product recommendations into its service.

FutureProof Retail uses mobile phones to create a line-free checkout process for supermarkets. Unlike other cashierless checkout solutions that install cameras and use computer vision to identify what you purchase, FutureProof moves everything to a whitelabeled app from the retailer on your phone. You scan barcodes to add items to your cart, and when you’re done, you hit a checkout button and a store employee does a quick check of your bag to make sure you aren’t shoplifting. You can see it in action in this video:

Express Checkout El Rancho Awareness Video from FutureProof Retail on Vimeo.

With today’s announcement, when people scan an item Halla’s recommendation engine will kick in to suggest a complementary product right there on the phone’s screen. So if you scanned a bag of Tostito’s chips, the app would recommend salsa. But Halla’s recommendations are also dynamic and adapt as you shop. As we wrote when the company raised $1.4 million in May of this year:

…if you are using a grocer’s app with Halla I/O built in, the app will serve up intelligent recommendations as you continue to shop online. Buy salt, it could recommend pepper. By salt and noodles and beef, and it might guess that you are making a bolognese and recommend tomato sauce.

Halla developed its recommendations based on data from anonymized grocery transactions to see what items are typically purchased at the same time, as well as restaurant and menu items (menu descriptions are, after all, typically a list of ingredients). Halla had initially started off making recommendations for restaurants as well, but pivoted away from that to focus on grocery.

It’s important to note that Halla will only provide one recommendation per item. “As of today our recommendations are focused on complementary products with one goal in mind, what is most likely to be purchased,” Halla Co-Founder and CEO, Spencer Price, told me by phone this week. Price said that this focus on a single product is important because shopping is a very emotional experience for people, and one that can’t be junked up with lots of pop-ups on a phone screen with lists to scroll through.

FutureProof works with Fairway Markets in New York and other regional grocery chains, though Price was unable to provide a timeline or location for where its recommendations will go live through this partnership.

Almost as important as the news itself is the fact that FutureProof has publicly named Halla as a partner. There are other AI-based food recommendation engines out there like Spoonshot and Analytical Flavor Systems, but they are pretty quiet about their clientele.

I’m not fully convinced about the broad adoption of FutureProof’s cashierless implementation. Manually scanning products and having a human check your bag before you leave a store seems to bring friction into a process that is supposed to be frictionless. Regardless, for those who do use it, FutureProof’s app requirement seems like a good vehicle for Halla’s technology because of its immediacy and visual cues. I imagine the company will look towards announcing partnerships with smart shelf displays like AWM Smart Shelf in the near future.

Halla Raises $1.4M Seed Round, Pivots to Focus on AI-Powered Grocery Recommendations

Halla, a startup that uses machine learning and AI to power food recommendations for grocery shoppers, announced today that it has raised a $1.4 million seed round led by E&A Venture Capital with participation from SOSV. This brings the total amount of money Halla has raised to $1.9 million.

Halla has a B2B platform dubbed Halla I/O that helps recommend relevant food products to shoppers. As we wrote at the time of Halla’s launch last year, the “company created an entirely new model and a new taxonomy that doesn’t just look at what a food item is, but also the molecules that make it up, a map of attributes linked to other food as well as how people interact with that food.”

So if you are using a grocer’s app with Halla I/O built in, the app will serve up intelligent recommendations as you continue to shop online. Buy salt, it could recommend pepper. By salt and noodles and beef, and it might guess that you are making a bolognese and recommend tomato sauce.

If you read our coverage of Halla last year, you’d notice something different about the company now. Initially, its go-to market strategy included both grocery stores and restaurants. But in the ensuing year, Halla has abandoned its pitch to restaurants, choosing instead to focus exclusively on grocery retail.

“What we’ve found is that the market timing was screaming ‘where tech meets grocery,'” Halla Co-Founder and CEO Spencer Price told me by phone recently, “The restaurant space is more crowded for building recommendations.”

But all that work in the restaurant space didn’t go to waste. “The truth is we were able to keep all of our learnings from restaurant and made our grocery recommendations stronger,” Price said. “One core learning is that restaurant dishes and menu items, as long as they have descriptions, are just recipes without instructions.”

Halla now has more than 100,000 grocery items and one hundred million unique grocery transactions from retailers across the country in its data set, informing its machine learning algorithms. Price is quick to point out that Halla does not have any personally identifiable information on people. “We can make recommendations to customer X without knowing who customer X is,” Price said

Though a grocery chain can move a lot of product and provide a lot of data for better purchasing recommendations, grocery chains as a whole do not move quickly. To get them to adopt a new technology is like turning a battleship — they need a lot of time to execute. “They’re not looking for speed,” Price said, “but a reliable solution.”

To this end, the biggest thing Halla’s funding buys them is time. “We’ve bought some runway,” said Price. The company now has some breathing room to take its time and conduct even more tests with slow-moving retailers. Halla is in tests with unnamed grocers right now, and offers its recommendation on an API pay-per-call model.

AI-based B2B food recommendation is almost its own mini-industry. Spoonshot, Analytical Flavor Systems, and Tastewise all use vast data sets to make product predictions and recommendations to restaurants and CPG companies. Other companies like AWM Smart Shelf are using a combination of prediction and smart digital signage to make in-store grocery purchase recommendations.

With online grocery shopping reaching a tipping point, people buying food via apps adding one or two more items to their cart because of intelligent recommendations could mean a nice sales boost for the grocery industry.

Halla Launches AI-Powered B2B Food Recommendation Platform

Let’s say you’ve bought a chicken sandwich. Based just on that purchase, what do you think is a better recommendation for another meal you might enjoy: chicken piccata, or a hamburger?

This is a typical type of problem that LA-based startup, Halla, is trying to solve with its new artificial intelligence (AI) powered recommendation platform. The new Halla I/O (which stands for “Intelligent Ordering”) software integrates with a restaurant or grocer’s existing website or app, so it’s invisible to the end user. People buying groceries or meals through those apps would continue to do so, but would receive recommendations through Halla’s algorithm.

Halla I/O does this, according to Co-Founder and CEO Spencer Price, by combining data and psychographics around how people think and interact with food. Let’s go back to the chicken sandwich example. According to Price, a traditional data science approach would recommend chicken piccata, because it’s, well, chicken.

But, “The human experience of eating food is different,” Price said. He went on to describe how the chicken sandwich is also meat-centered, covered on both sides with bread and eaten by hand. And when you think of it that way, a hamburger recommendation makes sense.

Price didn’t say that the chicken piccata was wrong, per se, but just provided it as an example to illustrate how Halla I/O’s AI works differently. Using a proprietary dataset from more than 10,000 grocery items, 20,000 ingredients, 175,000 recipes and 20 million restaurant dishes, Price said that his company has created an entirely new model and a new taxonomy that doesn’t just look at what a food item is, but also the molecules that make it up, a map of attributes linked to other food as well as how people interact with that food.

With that information, Price said Halla I/O can provide more contextual and more meaningful recommendations. On a surface level, this means Halla I/O can make very basic recommendations. If you are buying salt, it might recommend pepper. But if you put salt and ground beef and onions into your cart, Halla I/O might infer that you’re making a bolognese. Not only will it recommend more items needed to make a bolognese, Halla I/O will show you recommended recipes and automatically add all the ingredients for that recipe to your cart. If you’ve shopped with that app before, Halla I/O will know if you purchased tomato sauce recently, and automatically remove that from the recommendation.

Though Halla I/O works for both restaurants and grocers, right now Halla I/O is only in pilot programs with four grocers. Interestingly, one of the pilots was with Green Zebra in Portland OR. Instead of online cart recommendations, Halla provides shelf recommendations. For example, they may see that lots of people are buying bananas and peanut butter, and set up a physical display to take advantage of that.

Halla is at the nexus of two trends we’re following at The Spoon: personalization and shoppable recipes. If its software works as promised, not only will it deliver better recommendations, but the ability to automatically recommend and adjust cart items based on recipes could be another step towards customized meal kits.

Halla is just seven employees, and has raised $500,000 in angel funding. It’s going to need more than a scrappy startup spirit, however, as the AI-powered recommendation space has plenty of competition. Startups like Dishq, Foodpairing and Plantjammer are all running their own algorithms to deliver more relevant recommendations.

Pretty soon, grocers and restaurants will need an AI-based recommendation engine to recommend the best AI-based recommendation engine.


An earlier version of this article stated that Green Zebra does not have online ordering capabilities. The grocer does through Instacart, and we have updated the post.