Kroger teams up with Microsoft on “smart” grocery stores

As it seeks to fend off Amazon’s expansion into the retail food business, national grocery chain Kroger teamed with Microsoft to roll out new tech-enabled stores with “digital shelves.”

Cincinnati-based Kroger teamed with Microsoft to develop a cloud-based system that can help customize the grocery store experience for customers, company executives told Bloomberg. Kroger has unveiled the system in 92 of its stores.

In the new system, customers add their grocery list to their Kroger app, and digital displays installed in the store’s aisles flash with a customer-chosen icon to direct them to the products they’re shopping for.

The digital displays can show ads and sales papers, and Microsoft’s artificial intelligence can predict a shopper’s age and gender, which helps customize the ads to specific customers.

Kroger’s smart shelves also can speed up the time for employees to fulfill online orders and curbside pickups, a move that could help gain an advantage over competitors like Amazon’s Whole Foods and Walmart.

After acquiring Whole Foods for $13 billion in 2017, Amazon is planning an expansion of the now tech-infused grocer. The new stores will be bigger, with extra space for Amazon’s delivery service and online order pickup. Amazon is also working to roll out 3,000 cashier-free convenience stores throughout the country.

Grocers have not been immune to the challenges facing the retail industry. Competition is up, while same-store sales have been flat. [Bloomberg] — Joe Ward