Kroger and Microsoft partner on connected store pilot

Stewart Samuel
Program Director - Canada

Date : 07 January 2019

Kroger and Microsoft are collaborating to develop a connected store pilot, optimising Microsoft’s Azure cloud platform.

Pilot stores in Oho and Washington

Powered by Microsoft Azure and connected IoT sensors, Kroger’s technology team has developed a smart technology system. This is being used to transform two pilot stores in Monroe, Ohio and Redmond, Washington. The stores will optimise Microsoft’s ‘Retail-as-a-Service’ (Rass) capabilities to quickly add innovations and create new customer experiences. Commenting on the collaboration, Kroger's chairman and CEO, Rodney McMullen, stated,

"Kroger is building a seamless ecosystem driven by data and technology to provide our customers with personalised food inspiration. We are excited to collaborate with Microsoft to redefine grocery retail.”

Source: Kroger

Delivering a more personalised experience in-store

The pilot will aim to deliver a more personalised experience for Kroger’s customers in-store. Building on its existing EDGE (Enhanced Display for Grocery Environment) Shelf system, which uses digital displays to indicate pricing, promotional, nutritional and dietary information, the companies will look to introduce new shopping experiences. This includes connecting EDGE with the retailer’s ‘Scan, Bag, Go’ self-scanning system to create a unique guided shopping experience.

Enhancing in-store order picking productivity

The system will also be used to develop a pick-to-light picking system for its online grocery service. This is expected to reduce the time taken to fulfill orders by using visual cues to help store associated find items. Microsoft’s Azure-powered video analytics will also be used to identify and address out-of-stocks.

New source of revenue and profit

In line with Kroger’s new profit model, the EDGE Shelf system will be used to generate revenue by selling digital advertising space to product suppliers. Video analytics will be used to deliver personalised offers and targeted advertising based on customer demographics. Microsoft and Kroger plan to jointly bring this Raas solution to the market. Future plans include developing a sensor network and connecting to corporate point of sale, inventory management and merchandising systems.

Partnering for growth

This initiative reflects the importance of strategic partnerships at Kroger. In the last year, it has announced new deals with Nuro, Ocado, Alibaba and Walgreens. These form part of its four-point strategic plan and its ambition to grow operating income by an additional $400m by 2020. This is a trend we are seeing reflected across the industry. Last year, Walmart also partnered with Microsoft to accelerate its digital transformation and work on a broad set of cloud innovation projects that leverage machine learning, artificial intelligence and data platform solutions.

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