Microsoft, Kroger Advance Grocery Tech to Fend Off Amazon

Xconomy Seattle — 

From the cloud on down to the floors of supermarkets, the rivalry between Microsoft and Amazon spans many sectors in software, gadgets, and increasingly, retail.

The Seattle-area tech giants are battling—both with one another, and other competitors—to further digitize grocery shopping. The latest salvo came on Monday from Microsoft (NASDAQ: MSFT), which announced new details of its partnership with Kroger (NYSE: KR), one of the leading grocery store chains in the U.S. The Cincinnati-based grocer plans to install digital displays and tracking devices inside many of its 2,800 stores, and the technology is powered by Microsoft’s Azure cloud software.

Microsoft’s partnership with Kroger, first announced in June, is aimed in part at helping customers work through their shopping lists more quickly. It’s also designed to help Kroger, both by increasing its employees’ productivity and using the new, high-tech displays to show shoppers advertisements.

The tie-up follows recent moves by Amazon (NASDAQ: AMZN) to get more of its users to buy groceries. Amazon offers different options for doing so.

Amazon bought grocery store chain Whole Foods in 2017 for $13.7 billion and offers free deliveries from Whole Foods stores to Amazon Prime customers in dozens of U.S. cities. The e-commerce giant also operates cashier-less Amazon Go stores in Seattle, San Francisco, and Chicago.

Microsoft said it and Kroger have installed what they call retail-as-a-service technology at two stores near their respective headquarters (one is in Redmond, WA, the other in Monroe, OH). Certain shelves in these stores have digital price displays, allowing Kroger to change prices more quickly than is possible with paper tags. Last year, Microsoft said its retail customers could use its Azure software to automatically update the prices of commodities based on swings in the market.

The digital shelves in Kroger stores will “enable Kroger to generate new revenue by selling digital advertising space to consumer packaged goods brands,” Microsoft said. It’s also possible the two companies will market the retail-as-a-service technology to other organizations and tailor it to their needs, according to a news release.

For consumers, the potential benefits of shopping in a Microsoft-powered Kroger store include the ability to make a shopping list using Kroger’s mobile app, and get help finding items as they navigate the aisles. Microsoft said the smart shelf technology it developed with Kroger connects to the chain’s self-checkout system so customers can pay for items faster.

The technology Microsoft and Kroger plan to introduce in more of the grocer’s stores helps employees fulfill pickup orders shoppers place ahead of time, and uses sensors to notify workers when items are out of stock.