Grocery retailers are entering an AI arms race for customer loyalty and market share as competition shifts beyond delivery speed and promotions to personalised digital shopping experiences.On Thursday, Pick n Pay unveiled Penny, an AI-powered grocery shopping assistant for its asap! delivery app, becoming the latest retailer to use AI to win over South Africa’s increasingly digital grocery shoppers. The launch comes three months after Checkers Sixty60 introduced its AI-powered shopping assistant, Pixie, and as retailers intensify efforts to use AI to remove friction from online shopping, personalise recommendations and drive customer loyalty.Available on the latest version of the asap! app from Monday, Penny allows shoppers to build baskets using voice notes, text messages or photographs instead of scrolling through product categories and search results. (Dorothy Kgosi) Speaking at the launch in Johannesburg on Thursday, Pick n Pay omnichannel retail executive Enrico Ferigolli said retailers are entering a new phase of e-commerce where convenience is no longer defined only by delivery speed.“For years the focus has been on faster delivery. The next disruption is removing the effort from shopping itself,” he said. “Consumers no longer just want speed — they want shopping apps to think for them.”Ferigolli said online grocery retail has become one of the most competitive sectors in commerce globally, forcing retailers to continuously innovate.“We have built a business that is really ahead of global standards. South Africa today has one of the most advanced online grocery markets in the world. It’s quite competitive and because of that, we can’t rest on our laurels,” he said.Read: Amazon launches Prime in SA as e-commerce battle intensifiesPick n Pay said Penny is powered by Google’s Gemini AI models and uses multimodal technology, allowing customers to communicate through voice, text and images. Users can upload handwritten shopping lists, photograph products they want, snap ingredients already in their fridge and ask for recipe suggestions.During a demonstration, Ferigolli showed how customers could ask Penny to create a weekly meal plan for four people with spending limits and dietary preferences, with ingredients automatically added to a shopping basket.“We wanted to transform shopping so that all customers have to do is simply ask,” he said. The launch follows Checkers Sixty60’s rollout of Pixie in April. Developed by ShopriteX, Pixie analyses customers’ shopping habits, buying patterns and preferences to predict what products they are likely to need before they begin searching. Shoprite described Pixie as South Africa’s first personalised AI shopping assistant and said the technology becomes smarter with every purchase through insights gathered from the retailer’s Xtra Savings rewards programme. Shoprite has also been investing heavily in retail technology, recently introducing its AI-powered Smart Trolley, which allows shoppers to scan products and track spending while shopping in-store as the retailer expands its use of AI beyond online channels.The emergence of Penny and Pixie highlights how the battleground between South Africa’s largest retailers is shifting beyond pricing, promotions and delivery times towards AI-powered personalisation.Google South Africa country director Kabelo Makwane said changing consumer behaviour is driving retailers to rethink how customers interact with technology.“The way you search today is no longer one-word searches,” said Makwane. “Consumers are giving much more detailed instructions and asking far more complex questions. The technology has to understand intent.”He said retailers are under pressure from rising customer expectations, growing competition and the rapid pace of technological change.“You guys have been given superpowers by AI,” Makwane joked, referring to consumers’ growing use of AI tools, adding that retailers need to up their superpowers to “match you toe-for-toe in terms of your likes, dislikes and requirements around the experience”.Makwane said: “We are entering an era where intelligent personal assistants work for you.” For Pick n Pay that begins with Penny acting as a grocery-shopping companion capable of recommending products, suggesting recipes, reloading previous baskets and personalising recommendations through the retailer’s Smart Shopper loyalty programme.Ferigolli said the technology was made possible by a major rebuild of Pick n Pay’s digital platforms completed last year. It “was a milestone year for us because we rebuilt our entire system”, he said. “That gives us the ability to bring new innovations to customers much faster.”As South Africa’s online grocery market matures, retailers increasingly appear convinced that the next phase of competition will not be determined by who delivers fastest, but by which AI assistant understands customers best.“This is only the beginning of what AI can unlock for everyday grocery shopping,” said Ferigolli. “Penny is the first step in that journey.”