Why Kroger is teaming with Microsoft

The Kroger Co. announced on Monday that it was teaming with Microsoft to help create the grocery store of the future with digital shelves, price tags and advertisements. Cincinnati-based Kroger and Redmond, Wash.-based Microsoft are rolling out the technology to two pilot stores in Ohio and Washington state. According to CNN, Kroger wants to give shoppers more reasons to visit physical stores to do their shopping than to do just do their shopping online.

“The notion of Kroger having to figure out what digital looks like in store for a grocery shopper is super important,” Jason Goldberg, head of the commerce practice at digital agency SapientRazorfish, told CNN in a story.

The stores will offer shoppers a shopping experience “never before seen,” according to Kroger, bringing in the latest generation of the EDGE (Enhanced Display for Grocery Environment) Shelf digital display system. Rather than use traditional paper tags, EDGE Shelf communicates everything from pricing and promotions to nutritional and dietary information.

The solution connects through Microsoft Azure AI with Kroger’s Scan, Bag, Go mobile checkout technology to create a unique guided shopping experience, according to Kroger. A pick-to-light productivity feature helps direct shoppers’ packing orders for curbside pickup via visual cues that help them quickly find products. Moreover, features such as Microsoft Azure-powered video analytics can help associates locate and deal with out-of-stocks.

“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. “We are identifying partners 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.”

According to CNN and other reports, Kroger’s latest technological move was made to keep pace with rivals Amazon and Walmart, retailers that are investing heavily in AI and cashier-less technology to reduce long lines at stores.

Kroger also stated it will try to sell the new technology with Microsoft to retailers. Goldberg told CNN he was skeptical of that.

“If I’m Albertsons or Walmart, do I want to buy a digital merchandising solution that was invented by Kroger?” Goldberg asked