Grocery Guru Episode 21: Hagglebots and Fishing Grenades

Join Andrew Grant and Darren A. Smith in the twenty-first episode of Grocery Guru discussing supermarkets using Hagglebots and Fishing Grenades

You Can Read the Full Hagglebots and Fishing Grenades Episode Transcript Below:

Darren A. Smith:

Hello. You're here with us on episode 21 with the Grocery Guru. Andrew, our grocery guru, how are you?

Andrew Grant:

Very well, Darren, yeah. You? You good?

Darren A. Smith:

Yes, very good. Andrew, this week we are talking about hagglebot, something you know something about, I think.

Andrew Grant:

Wasn't that Robbie Coltrane in the Harry Potter films? Big guy that lived outside the school, isn't he?

Hagglebots and fishing grenades

Darren A. Smith:

I think that was Hagrid.

Andrew Grant:

Oh, Hagridbot. Sorry, I misheard you. So not a Hagridbot, a hagglebot.

Darren A. Smith:

We're talking about hagglebot. So I've got this piece that I've done some research on with hagglebot, and what I'd like to do is get your take as the grocery guru on what's happening in the world of supermarkets, haggling, negotiating. So I'm going to read some of this out, but before I do, what's your understanding of hagglebot?

Andrew Grant:

Well, I suppose it's this new AI, artificial intelligence, way of negotiating. So obviously I think come out of the States. I think maybe we might use it where they automate the negotiation process. I mean in my world, it goes back to one of the scariest things I ever saw was an e-auction that we did years back. An e-auction for tinned tuna, I think it was. And Jesus, it was brutal negotiation I have ever seen when you let basically computers set the prices and suppliers don't know who they're bidding against. Absolutely brutal. And if I'd have been ... if I'd have been the suppliers, I'd have been in tears at the end.

Darren A. Smith:

It's like a blind auction, isn't it?

Andrew Grant:

Yeah, literally. You place your bid, a huge amount of business, and no supplier can afford to lose it, and yet you're bidding blind against a competitor that suddenly says no, you need to come down 50 more dollars a ton. So I guess you could call that ... I mean that was serious hagglebotting, to use your phrase.

Darren A. Smith:

Well, it seems to be coming up more and more. Let me share this with you. There is the Olympics for hagglebots, they're on their 11th year, and it's artificial intelligence pitched against artificial intelligence and/or pitched against humans. And tends to be universities. The winners tend to be Turkey or Japan with the best hagglebots. We're 11 years in but the first haggle bot was developed in the 1980s and was called Negoisst. Never heard of that. But here's a statement I'd like to share with you and see what you think, "Humans have the upper hand understanding emotion and subject matter expertise, but can falter when there are many issues."

Andrew Grant:

Yeah. I mean if you think about it, when you bid on eBay for something, that's a sort of electronic negotiation, isn't it? You place your bid and then you get told, "Oh, you're being outbid." And that works in a very black and white linear way, but it must come down to our world of food. There's a specification for product, there's delivery times, there's payment terms, there's so many, as we call them, [inaudible 00:03:32]. Could you program a computer to get all those nuances? And at the end of the day, it is looking somebody in the eye and doing a deal with them. So I can see electronic negotiation, haggling, whatever you want to call it, working when it's very simple transactions and you've got thousands of suppliers. I can see it being beneficial to an organization to use almost like tick box buying. And in the last week, there's been a few news items where a particularly large online player has been sending out tick box requests for terms of doing business. In my day, it used to be called something like a grenade fishing.