Pilot stores unveiled in Ohio and Washington

CINCINNATI — Kroger Co. and Microsoft on Monday announced a collaboration to test new technologies to improve the customer experience by making it easier to find and purchase items in grocery stores.

The companies are unveiling pilot stores near their respective headquarters, in Ohio and Washington, featuring smart shelves with digital displays that update prices dynamically and show personalized icons to help shoppers find items they’ve put on their shopping lists.

Smart shelves will also help workers identify items to fulfill curbside pickup orders.

“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 chief executive officer.

Added Microsoft CEO Satya Nadella, “Our partnership brings together Kroger’s world-class expertise in the grocery industry with the power of Azure and Azure AI. Together, we will redefine the shopping experience for millions of customers at Kroger and other retailers around the world, setting a new standard for innovation in the industry.”

For the pilot, the companies will jointly develop and market a commercial retail-as-a-service (RaaS) product for the retail industry. The system will be tested at a Kroger supermarket in Monroe, Ohio, and a QFC store in Redmond, Wash.

“The RaaS product is enablement software built by a retailer for retailers, supporting modern retail experiences and harmonizing customers’ digital and physical shopping experiences,” the partners said in a joint statement. “The rapid transformation platform enables retailers to prioritize its most desired initiatives. Future commercial products include: Scan, Bag, Go; Virtual Store Manager; sensor network; and connectors to corporate systems like point-of-sale, and inventory management, tag and merchandising systems.”

The technology could ultimately roll out to Kroger’s 2,800 food stores operating under such banners as Kroger, Fred Meyer, Food 4 Less and Harris Teeter. Beyond that, the partners said they intend to work together to offer technology to other retailers, by merging Kroger’s expertise in grocery with Microsoft’s experience in the cloud, artificial intelligence and the Internet of Things.

For Microsoft, the partnership helps solidify its position with retailers as a technology alternative to Amazon and Amazon Web Services.

Walmart and other large retailers have been turning to Microsoft to use its Azure cloud services and productivity tools to compete. Walmart last year signed a sweeping agreement with Microsoft for a number of “cloud innovation projects.”

Kroger in recent months has been using Microsoft Azure AI on an “edge” (enhanced display for grocery environment) shelving system that features digital displays rather than paper tags to indicate prices and other product and promotional details.

Edge Shelf, as the guided shopping, personalized ads and pick-to-light system is called, will be available for viewing at the Microsoft booth (#3301) at this month’s NRF 2019: Retail’s Big Show in New York. McMullen will deliver a keynote at the event, sharing details about the partnership and providing his outlook on the grocery retail industry.