Microsoft and the US grocer Kroger have partnered on a new connected store product – built around shelf-edge screens and cloud computing – called Retail as a Service (or RaaS).
The idea is to streamline shopping for things like groceries, using smart shelves and things like portable scanners. The first elements of the service are being tested in Kroger stores in Redmond, Washington (home of Microsoft) and suburban Cincinnati, home city of Kroger (and Proctor and Gamble).
“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,” says Rodney McMullen, Kroger’s chairman and CEO.
“Our partnership brings together Kroger’s world-class expertise in the grocery industry with the power of Azure and Azure AI,” says Satya Nadella, CEO of Microsoft. “Together, we will redefine the shopping experience for millions of customers at both Kroger and other retailers around the world, setting a new standard for innovation in the industry.”
The Kroger Technology team says the two pilot stores will leverage RaaS – “establishing a way to quickly add innovations to create new customer experiences, enable higher levels of personalization through insights and enhance store associate productivity.”
The PR continues:
By using Microsoft Azure to store and process the data generated in stores, near the smart shelves and on Kroger’s app, the digital stores will introduce never-before-seen shopping experiences, including the latest generation of EDGE™ Shelf (Enhanced Display for Grocery Environment), a shelving system that uses digital displays, instead of traditional paper tags, to indicate everything from prices and promotions to nutritional and dietary information. Using Microsoft Azure AI, EDGE Shelf will connect with Kroger’s Scan, Bag, Go®, creating a unique guided shopping experience for customers.
For store associates, a pick-to-light productivity solution can=reduce the time it takes to fulfill curbside pickup orders by using visual cues to help them quickly find items. Additionally, solutions like Microsoft Azure-powered video analytics will help store associates identify and address out-of-stocks to ensure customers can locate products on their shopping list.
In addition to transforming the customer experience and enhancing productivity for associates, the EDGE Shelf will enable Kroger to generate new revenue by selling digital advertising space to consumer packaged goods (CPGs) brands. Using video analytics, personalized offers and advertisements can be presented based on customer demographics.
The new pilot will guide expansion plans in 2019 and beyond.
Kroger plans to market RaaS as enablement software built by a retailer for retailers, supporting modern retail experiences and harmonizing customers’ digital and physical shopping experiences. 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. Microsoft and Kroger will jointly bring the RaaS solution to market.
I don’t know the grocery business all that well, but can’t really picture Kroger rivals opting in on a service run by a competitor, but let’s assume the proponents here would have addressed that and sorted out the possibilities and practicalities.
Smart shelves are not new, nor is the concept of equipping shoppers with portable scanners. Saw that 10 years ago, ironically at NRF – where this new version of the tech will be demo’d next week, at the Microsoft booth.