Kroger is teaming up with Microsoft to create a connected store experience that it plans to market to the rest of the industry.
The smart system, created by Kroger Technologies and powered by Microsoft Azure, employs internet of things sensors to create a Retail as a Service (RaaS) experience, which will first be implemented in two pilot stores in Monroe, Ohio, and Redmond, Wash., near the respective headquarters of Kroger and Microsoft.
Kroger Chairman and CEO Rodney McMullen called the technology a "seamless ecosystem driven by data and technology that will provide 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," he said. "We are excited to collaborate with Microsoft to redefine grocery retail."
Since launching its Restock program in fall 2017, the retailer has made numerous technology advances, including launching a fleet of autonomous vehicles to perform grocery deliveries, partnering with Ocado to open automated fulfillment centers across the U.S. and releasing a wellness-focused app. This new integrated shopping experience comes at a time when Chinese companies such as Alibaba and JD.com are aggressively developing retail-based technology solutions that are making their way into the U.S. and Amazon is introducing new seamless shopping solutions in its Amazon Go stores.
The pilots will commence using Microsoft Azure to store and process data generated from its app and proprietary Edge Shelf system that uses digital displays to communicate prices, promotions, nutrition facts and other details about products on the shelves, as well as its Scan, Bag, Go program.
Kroger officials said the Edge Shelf will also provide new revenue streams by enabling the retailer to sell digital advertising space to CPG brands, which will be shared with targeted consumers based on personalized offers and computer demographics.
Additionally, the system will offer store associates productivity solutions that could reduce the time it will take to fulfill curbside pickup orders through visual cues that quickly guide them to requested items in the store as well as video analytics powered by Microsoft Azure that will help associates pinpoint out-of-stocks.
The commercial RaaS product is described by Kroger officials as "by a retailer, for a retailer," offering a "suite of capabilities to support KPIs and merchandising plans, collect customer insights, enhance employee productivity, improve out-of-stocks, better the customer experience, and allow for hyper-personalization using proprietary technology including the Edge Shelf."
The first RaaS product offerings will be on display at the NRF 2019 show from Jan. 13-15 in New York, with McMullen set to deliver a keynote on the subject at the event. Future commercial products will include Scan, Bag, Go; Virtual Store Manager; sensor network; and connectors to corporate systems such as point-of-sale, and inventory management, tag and merchandising systems.
Grocers made some serious technology breakthroughs in 2019, with robots being used for multiple tasks within the store, as well as in distribution centers, driverless cars delivering groceries and apps that provide in-depth experiences beyond the typical coupon and grocery delivery offerings of yesterday. Here’s a look at some of the top technology milestones grocers achieved this year.
The Kroger Co. made major moves in autonomous delivery in 2018, testing self-driving Toyota Prius vehicles in the Scottsdale, Ariz., market earlier in the year before launching its first Nuro R1 robot vans in December. Walmart also dabbled in driverless delivery, working with Ford and delivery partner Postmates in a test of driverless vehicle delivery for online grocery orders in Miami in November. Also, Esperanza Real Estate Investments and Narnia Road inked a deal with autonomous-vehicle startup Udelv to supply the Buy For Less family of supermarket brands with self-driving delivery vans to fulfill online grocery orders in the Oklahoma City metro area, with Farmstead also making a deal with Udely.
Robotic picking was another hot tech term in the retail world in 2018, with Albertsons, Sedano’s and Stop & Shop all partnering with Takeoff Technologies to pilot automated microfulfillment centers. Walmart also revealed that it was installing a robotic picker to automate the assembly of online grocery orders at a Supercenter in Salem, N.H., in partnership with the technology startup Alert Innovation, using its Alert Innovation, Alphabot Automated Storage and Retrieval System and Automated Each-Picking System.
Schnuck Markets employed shelf-scanning robots called Tally that check inventory and price accuracy throughout the store. Speaking at the Grocery Shop conference in Las Vegas, David Steck, VP of IT infrastructure for the St. Louis-based grocer, said with the labor shortage in retail, associates don’t have time to spend checking inventory because “there is not enough people, we can't hire enough.” “There are more jobs than there are applicants, so finding out of stocks, the only way we are going to improve customer satisfaction is making sure we have product on the shelf,” he said. Hear more about the new robots from Steck on WGB’s podcast here.
Retailers are also having robots shoulder the burden of floor cleaning. Walmart, for example, is equipping its stores with BrainOS autonomous robotic floor scrubbers that link to a cloud-based reporting system. The technology, supplied by San Diego-based Brain Corp., will allow associates to map out a route during an initial training run, which the robots will then follow autonomously. Food Lion is also using a robot named Marty that performs “safety sweeps” to call attention to spills; it is also able to check prices.
Festival Foods implemented an internet of things-based solution for task management and temperature monitoring to ensure food quality and safety while also freeing up employees from mundane tasks through SmartSense by Digi technology. The system includes real-time monitoring of products in all refrigeration units, food temperature monitoring of deli sections and automated task management.
Retailers stepped up their game this year with apps that do more than the typical couponing and grocery ordering functions. For example, in August, Wegman’s debuted cutting-edge technology to help visually impaired customers navigate the store through an app, and Kroger rolled out its OptUp wellness app that encourages healthier shopping trips. Additionally, Walmart, Albertsons and H-E-B all adopted the Myxx shoppable recipes platform, helping their shoppers add items to a shopping list for use in-store or online.
Sam’s Club opened what it is calling an “innovation center” in Dallas that is being used to test technology such as cashierless checkout and augmented reality peppered throughout the store. Shoppers can scan items with a smartphone app and check out with a single scan of a QR code by an associate.The wholesaler is also testing smart shopping lists.