- Kroger is partnering with Microsoft to roll out new “digital shelves” in two test stores.
- The shelves will allow Kroger shoppers to enter a shopping list into an app on their smartphone and then be guided to the location of the items they need.
- The deal could have major ramifications to both the cloud computing and grocery business.
America’s largest grocery store chain is joining up with its largest software company in an effort to take on the world’s largest company. Kroger has announced plans to test new “digital shelves” it has developed through a partnership with Microsoft, rolling them out in two remodeled stores, to stay ahead of Amazon and its grocery ambitions.
Here’s what the Kroger-Microsoft partnership means for shoppers.
Guided Shopping Makes For Easier Trip to the Store
With this high-tech grocery-store shopping offering, the digital shelves should help shoppers make their trips to the store more efficient by allowing them to use Kroger’s self-checkout app and enter their shopping list. Then, icons on the shelves will guide them to the items they need as they walk the aisles.
Building a better grocery store has been a source of considerable focus within the retail space and particularly the $860 billion food retail market. As online shopping continues to eat away at the business of brick-and-mortar retailers, building better ways to help people access goods and check out faster and more easily has become a priority. Amazon’s checkout-free Amazon Go stores represent one such approach to smoothing the process at the point of sale.
Grocers like Kroger could also be feeling more pressure after Amazon’s decision to purchase Whole Foods in 2017 as part of its push into the grocery business.
Could Amazon’s Retail Dominance Be Hurting Its Cloud Business?
The decision to partner with Microsoft and its Azure cloud computing service was likely easy for Kroger as Microsoft’s main competition — Amazon — is also Kroger’s. Amazon’s cloud computing services would otherwise be a possible option, but it’s likely that retailers will continue lining up to sign on with Microsoft rather than feeding the Amazon beast. Macy’s and Walmart have also signed on with Microsoft for data storage rather than Amazon Web Services.
That could present something of a concern for the e-retailer as competition in the rapidly growing cloud computing market continues to heat up. Although the money brought in by AWS represented just 12 percent of Amazon’s total revenue, it accounted for over half of the company’s profits as of the second quarter of 2018.
Success with its cloud computing service is a big part of why Microsoft managed to briefly hold the spot as the world’s most valuable company before it was usurped by Amazon again. Competition between Amazon, Google and Microsoft is fierce as the global cloud computing market is projected to grow to over $300 billion by 2021, according to research firm Gartner Inc.
Check out other retailers that want a piece of the Amazon pie.
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