Grocery chain Kroger Co (NYSE: KR) is teaming up with tech giant Microsoft Corporation (NASDAQ: MSFT) to create a new connected store experience in what appears to be a challenge to Amazon.com, Inc. (NASDAQ: AMZN)'s expansion in the sector.
What It Is
The future of grocery shopping is customers walking into a Kroger retail location with their shopping list uploaded to the store's app, Dina Bass said on "Bloomberg Technology" Monday. The app will guide consumers and let them know which aisle to go to to find their desired items.
From the store's point of view, Microsoft's software and cameras will identify certain characteristics of shoppers — like their age — to better target advertising.
Why It Will Do
Kroger needs to modernize many aspects of its entire operation if it wants to be able to take on Amazon's Whole Foods and is looking to Microsoft for help.
Some of the specific areas include speeding up the shopping experience to compete with Amazon's cashierless stores. Also important: improving efficiency for Kroger employees who are gathering in-store items for delivery to clients.
From Microsoft's point of view, a partnership with Kroger is another battlefront where it can compete against Amazon's software and cloud business.
Bass said the Kroger concept of the future "worked fine" at one of the pilot locations she visited, although it was a strictly controlled environment. The company will be looking to the test pilot locations for feedback to see what works and what doesn't in order to plan launches at additional locations.
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Photo courtesy of Kroger and Microsoft.
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