Kroger pilots ‘smart grocery stores’ with Microsoft to counter Amazon threat

US retailer Kroger is piloting two ‘smart grocery stores’, which it claims will “revolutionise shopping” and provide shoppers with personalised food inspiration during shopping trips, after teaming up with tech giant Microsoft.

(Source: Kroger)

The two pilot stores in Redmond, Washington and Monroe, Ohio, will use a raft of data-driven tech to help guide shoppers through the aisles to the products they want to buy and also to create personalised promotions. This includes sensors linked to the ‘Internet of Things’ to gather data from customers (smart home appliances that allows connectivity and exchange of data) and the digital shelves edge technology it rolled out into more than 100 stores last year to display prices, promotions, and nutritional information on screens in front of products. The system is backed up by Microsoft Azure’s cloud system, which stores and processes the data generated by customer actions on and around the shelves.

It will also allow Kroger to sell digital advertising space to FMCG brands, with video analytics, personalized offers and advertisements based on customer demographics, it said – and the technologies could help Kroger and Microsoft launch a cashier-less store like Amazon Go’s trial store in Seattle, online investor and analyst The Motley Fool claimed, which it said Microsoft was already developing for Walmart.

“It offers a suite of capabilities to support KPIs and merchandising plans, collect customer insights, enhance employee productivity, improve out-of-stocks, better the customer experience, and allow for hyper personalization using proprietary technology including the EDGE Shelf,” Microsoft claims.

The company plans to make the ‘retail as a service (RaaS) system available to other retailers, claiming it to be an easier and more cost effective way to bring a smart-shopping experience to smaller stores than would otherwise be possible.

“Our partnership brings together Kroger’s world-class expertise in the grocery industry with the power of Azure and Azure AI,” Microsoft CEO Satya Nadella said.

“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,”

Rodney McMullen, Kroger’s chairman and CEO said the company was building a “seamless” data and tech-driven “ecosystem” to provide its customers with personalized inspiration.

However whether it will chose the wine to have with dinner remains to be seen.

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