The accelerated growth of technology combined with the change in consumers habits and needs are forcing both retailers and the industry to reinvent themselves. In this article we explore what some of the relevant players across the globe are experimenting in their attempt to integrate new technologies to their business models in order to better serve the increasing demands of consumers.
Aware of the changing needs that consumers have today since their available time and budget are decreasing and they are not willing to spend too much time in grocery shopping, the retail chain Kroger saw the need to reinvent their shopping experience instore. The objective is to elevate this experience to the next level so that shoppers can find instore some of the positive reasons for which they choose to buy online.
For this, the retail giant joined forces with the technology giant Microsoft. Through this alliance, two stores have been remodeled and are currently serving as test stores. The objective is to expand the technology to the more than 2700 stores that Kroger owns in the US.
The shopping experience
The technology being used in this test is based upon Azure, the Cloud system powered by Microsoft. All the data that allows Kroger to provide a better shopping experience for users as well as an improved and more productive store operation is stored there.
In these stores, shelves are digital. Besides showing prices (that can very easily be changed) they can also display advertisements and important information about products. Screens lit up with a personalized icon when shoppers reach an article previously appointed on their shopping list in the Kroger app. Since Kroger also has purchase information in Azure, the store can easily provide a personalized experience with products that are of interest for each shopper. They can also offer the industry the possibility of developing very targeted advertising.
This technology also allows the store to improve its productivity. Through a number of different cameras and sensors, shelves are constantly monitored to avoid out of stocks. In addition, for example in the meat sector sensors provide the possibility of controlling levels of temperature so as not to put in risk merchandise.
This Alliance is also in response to Amazon’s constant expansion threat. Amazon has made it clear that they wish to substantially increase their current portion of market share within the food market in the US, which is currently valued at 860 billion dollars. For Microsoft, it represents a chance to compete with Amazon’s increasing cloud business.
Kroger also expects that this technology becomes an additional source of revenue for them since the idea is to sell it to other smaller retailers in the country. It is an Alliance that, just like Rodney McMullen, Kroger’s Executive President pointed out recently, “together we were able to create something that we could not do separately”.
Caper the shopping cart designed with Artificial Intelligence
The release of Amazon’s delivery robot only added more urgency to the rest of the retailers to find a way to defend themselves. In this new context is where Caper emerges. Caper’s objective is to eliminate checkouts by replacing them with new shopping carts that in addition offer a more familiar shopping experience for consumers.
This shopping cart designed by an American startup includes a scanning bar and a credit card swiper. Caper is currently working on a more evolved version that includes image recognition and a weight sensor so that products can be scanned as they are put in the carts. The startup stated that sales were up to 18% higher when utilizing this technology instore.
In light of the expansion of the checkout-less stores that Amazon Go offers, whose technology lie son cameras along the store ceiling that recognize products, companies offering alternative solutions are starting to explode. Caper’s advantage is that they offer an option that may be as successful at a significantly lower cost. The main benefits that the company seeks to provide to retailers is to be able to redirect cashier operators to other sectors within the store such as consumer assistance or shelf replenishment. Caper also states that the information the shopping cart stores may be used, for example, to optimize store layout.
An additional competitive advantage that Caper has over its competitors is that it can expand the shopping experience for consumers, offering them complimentary products to the ones they have in the cart or telling them about deals near their location.
One again, the conclusion is that successful cases are the ones who are able to bring to life the omnichannel concept, mixing the virtues of online and offline in one good experience for consumers.