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Kroger has teamed up with Microsoft to transform its stores with high-tech upgrades. Amazon has also been working hard to bring technological innovations to brick and mortar retail, with mixed results. It could be that Kroger and Microsoft beat Amazon to the punch in the high-tech retail business. Matthew Boyle and Dina Bass write in Bloomberg:
Kroger Co. and Microsoft Corp. are joining forces to bring the ease of online shopping to brick-and-mortar grocery stores.
Kroger, America’s biggest supermarket chain, has remodeled two stores to test out the new features, which include “digital shelves” that can show ads and change prices on the fly along with a network of sensors that keep track of products and help speed shoppers through the aisles. Kroger could eventually roll out the cloud-based system it developed with Microsoft in all of its 2,780 supermarkets.
The alliance is the latest example of how big U.S. retailers are deploying data-rich technology to improve the often-tedious ritual of food shopping and keep pace with Amazon.com Inc., which is bent on grabbing a bigger share of the $860 billion U.S. food retail market. For Microsoft the deal helps grow its cloud business, which lags behind Amazon’s but has found willing customers like Kroger and Walmart Inc. that are loath to line the pockets of Jeff Bezos. Kroger also hopes to sell the technology to other retailers, potentially opening up a new revenue stream with fatter profit margins than selling groceries.
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Jeremy Jones, CFA
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