AI Consumer Products Beyond the Chatbot: Ads, Toys, Staff

Consumer brands spent the week putting AI to work well past the chat window, scoring ad creative before buying media and handing agents to their own staff, while California wrapped its bill-signing season with new rules for AI in ads, toys and workforce decisions. Our feature covers the state's new 15-minute human handoff rule for automated customer service; this roundup covers the rest of the week.

Kroger can now forecast which ads will sell before the media runs

Kroger, working with creative data firm Vidmob and the trade group MMA Global, used AI to analyze more than 1,900 video and image ads from its campaigns on Meta and Google's DV360. The study scored each asset on attributes like messaging, narrative structure, branding and whether a person appears on screen, then checked those scores against real e-commerce purchases. The result: predictive creative scoring forecast e-commerce conversion with 81% accuracy before campaigns launched, according to the study as reported by Grocery Dive.

The downstream number is the part a CPG marketer will circle. Creative that followed the model's recommendations averaged four times the conversion rate, so the same ad budget goes further when it backs the higher-scoring assets. An earlier Kellanova study with the same partners used view-through rates as a stand-in for sales. This one ties creative decisions to actual sales, which is the number a retail media buyer gets judged on.

Vidmob founder Alex Collmer explained the timing. Generative AI and creator content are multiplying the number of ad assets a brand produces, and without a signal up front, a brand ends up spending more and more money behind content before it knows what that content will do. Not everyone wants a model making the creative itself, though. Bobby Watts, who leads Ahold Delhaize USA's retail media arm, told Grocery Dive the industry should "slow-play" fully AI-generated creative, because the grocer's five local banner brands are meticulous about what runs under their names.

So the useful AI job in retail media this year may be picking which ads get budget, using sales data only the retailer has, while humans keep a firm grip on the brand itself.

Source: Grocery Dive

California will require a label on AI-generated actors in ads

SB 1050, signed by Gov. Gavin Newsom in September, requires a clear disclosure on any video or audio ad that uses an AI-generated performer to sell a product or service. WilmerHale's summary of the state's new AI laws adds the detail with teeth: an ad that breaks the rule cannot keep being distributed, so a noncompliant spot has to come down.

California is the second state with a rule like this. New York's synthetic performer law already requires advertisers to label AI-generated people in ads that run there. Pennsylvania has two versions in motion: HB 95 passed the state House 124-78 in June, and SB 806 cleared the Senate 48-2 and now sits with a House committee, according to Transparency Coalition's legislative tracker.

Synthetic spokespeople stay legal under all of these. The obligation is the label. For a CPG marketing team producing creative at the volume Collmer describes, that turns compliance into bookkeeping: record whether an asset contains a synthetic performer at the moment it is generated, and let that flag travel with the file into every channel and every state.

A creative library that already tracks how each asset was made can meet California's and New York's rules, and Pennsylvania's if it passes, with one field. Brands that start logging provenance now will treat the next state's version as a settings change.

Source: WilmerHale; Transparency Coalition

AI chatbot toys are on pause in California, and Pennsylvania is weighing the same

California's SB 867, from Sen. Steve Padilla, puts a four-year moratorium on making and selling toys with AI chatbot capabilities for children under 16, the first law of its kind in the country. On Sept. 28, Pennsylvania's House Communications & Technology Committee took testimony on HB 2637, chair Joe Ciresi's bill to pause the manufacture, distribution and sale of AI chatbot toys for three years while the state studies safety rules. New York's Senate passed its own version 57-3, though it did not become law.

The testimony with the most to teach anyone building AI consumer products came from Steve Wimmer of the Transparency Coalition, and it was about architecture. As he described it, the toys at issue put a microphone and speaker in the plush and rent the conversation from a general-purpose model delivered over the internet. The toy maker doesn't control that model, and the model can change after the toy ships. In Wimmer's account, after independent testers flagged the Kumma teddy bear's responses, its model provider cut off the maker's access; the bear was back on sale 15 days later, and the maker and the provider now disagree about which model runs inside it. "A toy maker cannot certify the behavior of an AI model it doesn't control," he said.

Wimmer also offered terms for AI toys to come back. He asked Pennsylvania to aim its study at five conditions: disclose the model and version inside a toy and notify parents when it changes; run independent pre-release testing that includes long conversations, with public results; collect only the data a toy needs and let parents delete it; prohibit manipulative design, such as claiming to be alive or guilt-tripping a child who walks away; and require the model provider to certify the use for children, with serious incidents reported to the state attorney general.

That list doubles as a release checklist for any physical product with a rented model inside it, toys or otherwise. Pin the version, announce the change, test the long session, keep less data. Toy makers who can check every one of those boxes will have the strongest case when the pause ends.

Source: Transparency Coalition

California now wants a human check before AI disciplines or fires a worker

Retailers, grocers and contact centers with California staff picked up new workforce rules on Sept. 30. SB 947, the No Robo Bosses Act, takes effect July 1, 2027. When an employer primarily relies on an automated decision system to discipline or fire someone, a human reviewer has to corroborate the result with other information, such as managerial evaluations, personnel records, work product, peer reviews or witness interviews, SHRM reports. If the output can't be corroborated, or the reviewer finds it inaccurate, incomplete or misleading, the employer can't use it. The worker gets written notice that the system was relied on, a contact who can explain more, and a way to request a description of the employee data the system used.

SB 951 changes layoff paperwork. Starting Jan. 1, 2027, when a mass layoff, relocation or termination covered by California's WARN Act is caused in whole or in substantial part by AI or other automated technology, the notice must open with the line "This notice is for a technology displacement," count the affected jobs by classification and location, name the job functions being automated, and identify the type of system involved, according to Littler. The 60-day notice period and existing coverage thresholds stay the same. A third law, AB 1883, bars employers from using AI workplace surveillance tools that collect neural data or identify a worker's emotional state.

Employers can keep their automated scheduling, attendance and performance tools; the new requirement is a person who owns each consequential call and a record of how the system contributed to it. For teams building that review with AI agents, the shape is a short workflow: the system flags, a named reviewer corroborates, the notice goes out. On AgentPMT, a team can wire a human-in-the-loop approval step into the workflow so nothing moves forward until the reviewer signs off, and the activity feed logs each agent action with its full request and response. HR and counsel still own the compliance call; the record gives them something concrete to review.

Source: SHRM; Littler; Transparency Coalition

Grocers are training staff and reorganizing teams around AI

Plenty of grocery AI never faces a shopper. Ahold Delhaize USA's retail media team deployed three internal agents this year as test-and-learn projects, Bobby Watts told Grocery Dive. One, called Agent Klik, mines how consumers search for products and hands trending keywords and phrases to the ad operations team. Watts is also pushing staff to use AI for everyday work like proofing emails and building presentations faster.

Kroger's approach starts with literacy. At Groceryshop, the grocer floated the idea of an "AI driver's license" for employees, part of a wider conference theme that Clarkston Consulting summed up as clear ownership, hub-and-spoke governance, and giving early experiments room to iterate before they show up in the P&L. Clarkston also flagged a quieter use case: technology teams using AI to read legacy code and speed up system migrations.

Giant Eagle reorganized. The grocer merged its e-commerce operations team with marketing and merchandising last year, Heather Feather, its vice president of digital, e-commerce and customer analytics, told Modern Retail. "No store receives as much weekly traffic as our website and mobile app do," she said. Shweta Prabhu, a Giant Eagle vice president who oversees digital, e-commerce and AI, said the goal is turning single-channel shoppers into omnichannel ones, who carry about 30% higher lifetime value for the grocer.

The automated online services shoppers see are the visible end of a bigger build. The grocers furthest along are also rewriting org charts and training plans so their own people can run the tools, and that groundwork is what lets the next agent ship faster.

Source: Grocery Dive; Clarkston Consulting; Modern Retail

Sources

• Kroger takes key step forward in tying retail media creative with digital sales, Grocery Dive
• How Ahold Delhaize is tapping AI to improve retail media, Grocery Dive
• California Finalizes Next Wave of State AI and Privacy Regulation, WilmerHale
• AI Legislative Update: Oct. 2, 2026, Transparency Coalition
• Pennsylvania House considers an AI toy ban bill, HB 2637: "These are chatbots in disguise", Transparency Coalition
• Newsom Signs Revamped 'No Robo Bosses Act' Into Law, SHRM
• California Amends its WARN Act (Again), Littler
• How Kroger, Giant Eagle and DoorDash are building their agentic AI assistants, Modern Retail
• Groceryshop 2026 Takeaways: From AI Pragmatism to Everyday Value, Clarkston Consulting