Daily Management Review

Retailer Kroger Partners With Microsoft To Compete With Amazon


Retailer Kroger Partners With Microsoft To Compete With Amazon
In order to keep pace with the likes of Amazon and Walmart, retailer Kroger is partnering with Microsoft to design the new age grocery stores.
Digital shelves, price tags, and advertisements of two pilot stores in Ohio and Washington State would be set up under the partnership agreement between the two companies. 
The new pilot stores are being designed in such a manner that customers and workers of Kroger would find it easier to navigate the stores and sane the save the customers time while adding to cost savings for the company.
Kroger has been attempting to speed up grocery delivery and pickup, and conduct pilot projects that investigated the possible use of digital tools for lending support to its physical stores and has been working with companies such as Nuro, Ocado, and Walgreens.
The use of technology for Kroger is aimed to offer more incentives for consumers to visit physical stores as the grocery chain attempts to adjust to changing habits of consumers of browsing and buying products from the internet ranging from consumer electronics to breakfast cereal.
Kroger's Scan, Bag, Go self-checkout app, which is to be developed under the new partnership, can be used by shoppers to build a shopping list. Following that, the customers are guided around the stores as they check off items on their list as the app works with cloud-based software and sensors in the store. For example, the app will direct a consumer to the pasta aisle if the consumer has chosen o shop for pasta. The consumers would be directed to the right shelve where one can find the pasta of choice as soon as the consumers approaches the right aisle by a personal avatar — like a banana or an avocado. The item would be scanned for check out and the customers would be routed to the next item on their list by the app.
"The notion of Kroger having to figure out what digital looks like in store for a grocery shopper is super important," said Jason Goldberg, head of the commerce practice at digital agency SapientRazorfish. Fort those customers who want more information about the food they're buying, the tech can be quite appealing, he believes.
The company said that the new shelves at the two pilot stores would be different compared to the conventional stores.
Paper tags for prices and promotions would be replaced by digital forms which will create new space for Kroger to let out for advertisement for brands and which could be a new stream for revenues and profits which would be important in the grocery business because of its low margins.
The new tech push would also allow Kroger to also save on time and thereby money as it would be able to quickly change prices on products and create deals, thereby replacing the conventional method of manually changing all of that. And because employees would be able to locate the product of customers' curbside grocery pickup orders, it would also increase efficiency and productivity of employees, Kroger said.
"I'm a little sceptical of it," Goldberg said. "If I'm Albertsons or Walmart, do I want to buy a digital merchandising solution that was invented by Kroger?"