The Kroger Co. (NYSE: KR) and Microsoft Corp. (Nasdaq: MSFT) announced on Monday a collaboration to redefine the customer experience using Kroger Technology products powered by Microsoft Azure. The strategic partnership is partly in response to Amazon cashierless stores.
Microsoft and Kroger will pilot a connected store experience and jointly market a commercial Retail as a Service (RaaS) product to the industry.
The Kroger Technology team has developed a smart technology system, powered by Microsoft Azure and connected by IoT sensors. The new tech will debut in two pilot stores located in Monroe, Ohio and Redmond, Washington, respectively, near each company’s headquarters.
The pilot stores will use RaaS, as a way to quickly add innovations to create new customer experiences, enable higher levels of personalization and enhance employee productivity.
The new stores are promising to transform the customer experience. The digital stores will introduce new tech, including the latest generation of EDGE Shelf (Enhanced Display for Grocery Environment). EDGE shelf provides digital displays with real-time price updates and product information, as well as digital advertisements personalized to each shopper. Through Microsoft Azure AI, EDGE shelf will connect with Krogers Scan, Bag, Go App to provide a unique and guided shopping experience. “Kroger is building a seamless ecosystem driven by data and technology to provide our customers with personalized food inspiration,” said Rodney McMullen, Kroger’s chairman, and CEO.
The digital stores are also planning to increase employee insight and productivity. For store associates, a pick-to-light productivity solution can reduce the time it takes to fulfill curbside pickup orders by using visual cues to help them quickly find items. Additionally, solutions like Microsoft Azure-powered video analytics will help store employees identify and address out-of-stocks to ensure customers can locate products on their shopping list.
While transforming the in-store consumer experience and improving employee productivity the EDGE Shelf will also enable Kroger to bring in new revenue. Kroger can begin selling digital advertising space to consumer packaged goods (CPGs) brands. Using video analytics, personalized offers and advertisements can be presented based on customer demographics.
“Our partnership brings together Kroger’s world-class expertise in the grocery industry with the power of Azure and Azure AI,” said Satya Nadella, CEO of Microsoft. “Together, we will redefine the shopping experience for millions of customers at both Kroger and other retailers around the world, setting a new standard for innovation in the industry.
Amazon has had a fairly recent move into grocery stores after there 2017 acquisition of Whole Foods. The recent push has put pressure on other retailers like Kroger to expand and find innovative ways to attract customers. Microsoft and Krogers collaborative pilot stores are undoubtedly partly in response to the launch of Amazon’s cashierless stores, back in October of 2018.