Kroger Rolls Out Smart Grocery Stores Through Microsoft Partnership To Take On Amazon

The largest operator of grocery stores in the U.S. is not taking Amazon's expansion into the grocery market lying down.

Kroger Co. has debuted a grocery store concept using personalized self-checkout technology through a partnership with Microsoft, Bloomberg reports. The first two stores to feature the new tech, one in Cincinnati and one in Redmond, Washington, were chosen because of their proximity to Kroger and Microsoft's respective headquarters.

Depending on the success of the initial rollout, Kroger could expand the concept (hosted by Microsoft's Azure cloud system) to its 2,780 stores across the country. The main component of the technology is "digital shelves," which use cameras and sensors to track inventory and shoppers that use Kroger's self-checkout app. The shelves also have LED screens that display ads and prices that can change on demand. 

The general idea is for shoppers to make a grocery list using the app, which will then guide them through the store aisles displaying icons personalized by the shopper underneath the items on shoppers' lists. Similar technology would help speed up the process for employees who gather items for grocery pickup and delivery as well, according to Bloomberg.

Using the data gathered by Microsoft and the Kroger app to predict a shopper's age and gender, the smart shelves would also be able to tailor ads to such groups. Kroger also plans to offer more specific targeting based on customer preferences for those who opt in to the service. 

Personalized grocery shopping sped up through data gathering is what makes up the crux of Amazon's cashierless store concept, Amazon Go, as well. Amazon also has announced plans to expand both the size and quantity of its Whole Foods stores, all of which offer free two-hour grocery delivery to Amazon Prime customers within range. Grocery chains like Kroger are feeling the pressure, but require extensive cloud computing and data collection networks to keep up with Amazon — services that few besides Amazon can offer itself.

In addition to Kroger, Walmart and international grocery conglomerate Ahold Delhaize have partnered with Microsoft to avoid dependence on Amazon, Bloomberg reports.