In an effort to help retailers grappling with these challenges, American supermarket chain Kroger has teamed up with Microsoft to create a retail as a service (RaaS) solution that allows retail players to more easily and cost-effectively bring connected experiences to their stores.

A press release explains:

“By using Microsoft Azure to store and process the data generated in stores, near the smart shelves and on Kroger’s app, the digital stores will introduce never-before-seen shopping experiences, including the latest generation of EDGE™ Shelf (Enhanced Display for Grocery Environment), a shelving system that uses digital displays, instead of traditional paper tags, to indicate everything from prices and promotions to nutritional and dietary
information. Using Microsoft Azure AI, EDGE Shelf will connect with Kroger’s Scan, Bag, Go®, creating a unique guided shopping experience for customers.”

Kroger and Microsoft say that the EDGE Shelf offering, combined with video analytics, will also allow Kroger to develop new advertising offerings designed specifically to meet the needs of CPG brands.

In addition, the supermarket-software duo’s RaaS technology will help staff fulfill curbside-pickup orders and “identify and address out-of-stocks to ensure customers can locate products on their shopping list.”

An attractive solution for mid-size retailers?

Kroger and Microsoft’s so-called RaaS solution could be of great interest to retailers looking for a way to modernize at a lower cost and accelerated time-to-market – particularly those in the middle of the market. That could be critical as consumer expectations around retail experience change substantially, pressuring retailers without significant R&D budgets.

According to new research published by enterprise mobility management solutions provider SOTI, just over three quarters (76%) of consumers believe that retailers using more mobile technology enable a faster shopping experience, and just under three-quarters (73%) prefer self-service technologies that allow them to shop more efficiently and minimize their interactions with staff. The latter percentage has increased by over 10% in just a year.

In terms of specific technologies, the consumers SOTI polled felt that self-checkout and price scanners were the most beneficial, although they were also “dramatically” in favor of retailers giving their staff technology tools that can help them assist customers.

How far must retailers go?

Kroger and Microsoft’s RaaS offering could no doubt bolster the efforts of retailers without massive digital innovation budgets, but the big question is just how much retailers will have to change in order to keep up with evolving consumer expectations and differentiate themselves from their competitors.

Online retail’s 800-pound gorilla, Amazon, is increasingly investing in brick-and-mortar experiences. These include Amazon Go stores, which use technology to effectively eliminate “checkout” altogether. The technology that powers Amazon Go stores is a step beyond what Microsoft has developed in
partnership with Kroger, which “offers a suite of capabilities to support KPIs and merchandising plans, collect customer insights, enhance employee productivity, improve out-of-stocks, better the customer experience, and allow for hyper personalization using proprietary technology including the EDGE
Shelf.”

While it might be the case that the Amazon Go experience won’t be a fit for many retail categories, retailers considering third-party RaaS solutions would be wise to ensure that they don’t fall into the trap of believing that because they have technology, they have adequately innovated their customer
experiences.

The reality is that virtually all retailers today are wise to rethink their customer experiences first and then implement the technologies needed to support their next-generation customer experiences – not the other way around.

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