Nordstrom and Panera Leverage AI and Automation to Enhance Operations

Alexis DePree, chief supply chain officer of Nordstrom, and George Hanson, VP/chief digital officer of Panera Bread, sat down on Monday at Shoptalk in Las Vegas to discuss the bright future that retail can anticipate leveraging artificial intelligence (AI) and automation. 

Both leaders agreed that the key to optimizing operations comes down to leveraging AI and automation for low-value, repeatable tasks so that employees are freed up to engage with customers at a high-value, ad hoc level. Not only does embracing technology in this way improve the customer experience, but it also empowers the workforce, driving employee satisfaction. 

Given Ms. DePree’s focus area, most of the AI and automation-based wins she shared were related to logistics. Nordstrom has been leaning into AI and automation to design unique routing depending on the order, improve rates of return, and maximize storage space. 

“The supply chain used to be set it and forget it. Now it differs with each order,” said Ms. DePree.

She explained that there is now more complexity in the supply chain and automation has allowed for its movement from a cost center to a value driver. Additionally, since storage density has significantly increased, warehouses are much more economical thanks to the retailer’s advanced technology. 

Panera’s use of AI and automation enables more personalized digital and dining experiences. Mr. Hanson specifically highlighted the brand’s reliance on AI-powered voice recognition in the drive-thru. He also pointed to the use of AI to accommodate customers whose orders require repair by proactively offering a range of options. 

Further, he mentioned how crucial technology is in alleviating “microfrictions” when ordering in the cafe. Panera has recalibrated its use of AI and automation in online ordering, drive-thru and in-cafe operations. Mr. Hanson emphasized that properly allocating resources across experiences has ensured that winning, AI-based app features are brought to life in the cafe.