Kroger partners with Microsoft on connected store pilot

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Kroger partners with Microsoft on connected store pilot

By Dan Berthiaume - 01/07/2019
Grocery retailer Kroger is partnering with Microsoft to provide customers with mobile control of their in-store shopping experience.

Kroger has developed a smart technology system, powered by Microsoft Azure and connected by Internet of Things (IoT) sensors, being tested in two pilot stores located in Monroe, Ohio and Redmond, Washington, respectively, near each company’s headquarters.

The system, which Kroger refers to as Retail as a Service (RaaS), uses a proprietary digital shelving solution called EDGE (Enhanced Display for Grocery Environment). EDGE replaces traditional paper shelf tags with digital displays of prices, promotions, and other product information. Leveraging Microsoft Azure capabilities, EDGE will directly connect to the Kroger Scan, Bag & Go mobile app while customers shop.

As a result, customers can have a guided store experience where items on their mobile shopping list are automatically identified by images on digital shelf displays as they approach. In addition, the pilot includes a pick-to-light fulfillment solution that digitally guides store associates finding items to fill curbside delivery orders and automatically notifies them of out-of-stocks.

“Kroger is building a seamless ecosystem driven by data and technology to provide our customers with personalized food inspiration. We are identifying partners through Restock Kroger who will help us reinvent the customer experience and create new profit streams that will also accelerate our core business growth. We are excited to collaborate with Microsoft to redefine grocery retail,” said Rodney McMullen, Kroger’s chairman and CEO.

The connected store is a trend that appears to be gaining traction. The burgeoning Amazon Go cashierless store c-store pilot and similar pilots from retailers such as Sam’s Club also leverage IoT sensors and in-store mobile technology to streamline the shopping experience.

Kroger has plans to further monetize the new store system. Kroger and Microsoft intend to eventually develop a RaaS solution based on the pilot they will jointly market to the retail industry, and Kroger plans to sell digital advertising space to CPGs brands. Using video analytics, personalized offers and advertisements can be presented based on customer demographics. Kroger will base expansion plans in 2019 and beyond on the pilot.