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Fuel Cycle Blog: Kroger Competes with Amazon: Maximizing the Shopper Experience

Kroger Competes with Amazon: Maximizing the Shopper Experience

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Amazon’s viral growth has reached the point where it poses a threat not only to immediate competitors but to entities in different industries, altogether. Revolutionizing the digital retail experience has allowed Amazon to expand into media, publishing, and grocery markets.

As Amazon brooches on long-standing traditional retail experiences, such as that offered by grocery stores, companies are teaming up in unconventional ways to maintain their share of the consumer market.

Kroger’s Partnership with Microsoft

Kroger, America’s largest grocery store chain, has partnered with Microsoft to dip their toe into the digital retail experience by opening two hi-tech grocery stores.

Located in Washington and Ohio, the two stores feature experience-enhancing technology for both customer and employees. These features include digital shelf labels and facial recognition technology. Both companies expressed hope that using digital signage will enable them to sell targeted ads based on customer demographics- a considerable advancement in the use of AI for market research.

How This Benefits the Customer

Perhaps the most substantial benefit of this technology is the custom shopping experience. Customers are guided to items they need using the app, or one of Kroger’s “Scan, Bag, Go” terminals. The digital shelf labeling signs show a personalized symbol that directs customers to the item they need once they reach the aisle. After which, the app can be used to scan the item before addressing the next item on their shopping list.

Digital signs also show pricing and product information, or they can serve targeted ads to individual customers based on their demographics. The Kroger app aggregates and recommends certain items based on trends in customers shopping habits.

How This Benefits the Employee

The new technology will benefit Kroger employees as well. The new digital shelf labels will flash to indicate which items need collecting for curbside deliveries. According to Bloomberg, the technology advancement features image recognition cameras implanted in the ceilings of the stores. The camera monitors the inventory and indicates when it’s getting low. Other progressive features of the stores include sensors in the refrigerated cases which notify employees of inconsistencies in temperature.

Other Tech Advancements for Kroger

The partnership with Microsoft follows the June 2018 announcement of its partner with Nuro to offer a self-driving delivery service. Kroger also recently announced its collaboration with Ocado to build a robotic warehouse. The primary objective for the two partnerships is to stay competitive as the online retail giants, such as Amazon, rapidly encroach on their market share.

What’s Next?

Now that Amazon already has about half of the U.S. online shopping market, retailers in a multitude of industries, like Kroger, are putting forth their best efforts to stay relevant and cling to their market share. The traditional retail shopping experience will be infiltrated with more and more technology and AI as time goes on, which will be instrumental in adapting to the trends in consumer behavior.