When Amazon bought Whole Foods, the other food retailers knew Amazon wanted to prove the old grocery store chains were no longer relevant. Amazon thought Kroger, Publix, and the other big food retailers would eventually fade into the retail sunset like Sears and Toys R Us. But Kroger executives saw the handwriting on the wall, so they decided to team up with Microsoft and introduce an entirely new food shopping experiences for consumers.
According to Kroger’s top brass, digital shelves and in-store sensors are the keys to Kroger’s future. Digital shelves started appearing in Kroger stores last fall. More than 90 Kroger stores threw away the old paper price tickets and put digital displays in their place. The shelves have the ability to update prices, and they display ads as well as promotions. The shelves even offer nutritional information. And the good news, according to several Kroger shoppers, is the shelves recognize their self-checkout app. The shelves display a personal icon that guides them to the items on their shopping list. The digital shelves also make it easier for Kroger employees to fill curbside orders.
The other techno-savvy update in Kroger stores are the ceiling-mounted sensors. Those sensors collect shoppers’ data, and they maintain the right temperature in meat cases. If the temperature is not right, the sensors let employees know. The sensors help employees avoid issues that slow down the customer shopping experience.
The digital shelf technology does make shopping feel less random, and they reduce the time it takes to fill online orders. Plus, the Microsoft AI Kroger uses can identify a customer’s gender and age. That helps Kroger put the right ads in front of those customers. Kroger executives think these targeted ads will be a new source of income.
The sensors also provide insights into customer behavior so they help cut in-store losses. A Kroger refrigerated case can hold up to $10,000 worth of meat. The sensors keep the refrigerated cases cool enough, so the meat stays cool longer. Plus, the sensors can detect the out-of-stock items faster, and that also reduces the company’s in-store losses.
Microsoft and Kroger plan to sell this new technology to other retail companies. Several retailers are testing the technology. Kroger executives believe their partnership with Microsoft will create another revenue stream that isn’t as sensitive as food revenue. The technology is a win for brick and mortar retailers according to Kroger. They are proof that innovation and technology are the keys that will avoid bankruptcy.