Kroger, Microsoft partner to develop, sell Retail-as-a-Service tech

The country’s largest grocery retailer, Kroger, is partnering with Microsoft to pilot two connected experience stores for a proof of concept, featuring new retail technologies that will eventually be deployed across Kroger stores and be sold to the retail industry.

The partnership will leverage Kroger’s new technology ecosystem and Microsoft’s Azure cloud to test a connected store experience and jointly be marketed as a Retail-as-a-Service (Raas) platform to other retailers, possibly including other grocery stores. The pilot will be deployed in two stores, one based in Redmond, Washington and the other in Monroe, Ohio near each company’s headquarters.

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The new ecosystem will house and process data generated in stores, smart shelves and Kroger’s app to deploy shopping experiences such as the latest generation of the EDGE shelf and Kroger’s “Scan, Bag, Go” system that will speed up checkout. All of these solutions are designed to compete head-on with the investments in smart retail and autonomous checkout solutions being pioneered by Amazon’s Go stores and fintech providers such as Standard Cognition.

"We are identifying partners through Restock Kroger [a Kroger sales acceleration initiative] who will help us reinvent the customer experience and create new profit streams that will also accelerate our core business growth. We are excited to collaborate with Microsoft to redefine grocery retail," stated Rodney McMullen, Kroger's chairman and CEO, in the joint press release.

The race for reinventing the traditional brick-and-mortar retail experience has been heating up quite quickly, as banks and venture capital firms are placing an emphasis on autonomous checkout solutions. Grabango recently announced that it had raised $12 million in funding for its cashierless store technology. Grabango, which was founded three years ago by Pandora Radio co-founder Will Glaser, has amassed 17 patents and signed four U.S. clients that it claims serve over 600 million shoppers a year.

Cashierless tech maker Standard Cognition recently acquired robotic mapping startup Explorer.ai in a bid to accelerate the rollout of its autonomous checkout solutions. This move comes fresh on the heels of its Series A fund raising efforts last November, which raised $40 million in capital.

"Together, we will redefine the shopping experience for millions of customers at both Kroger and other retailers around the world, setting a new standard for innovation in the industry, Microsoft CEO Satya Nadella said in the joint press release.