Microsoft and Albertsons are partnering to integrate Microsoft’s Cloud and AI technologies into Albertsons grocery stores, the two companies announced today. This deal marks another move by Microsoft into major grocery retail operations, following a partnership with Kroger last month.
Details of the new Microsoft/Albertsons partnership are light, with the pres release saying the arrangement “includes immediate and long-term initiatives to digitally transform the customer journey, optimize operations and deliver better products and services”
According to the two companies, part of transforming that customer journey includes “eliminating the friction” customers experience either trying to find products or while standing in checkout lines. Though they don’t say it specifically, this could indicate that the two companies will be working on cashierless checkout at Albertsons stores.
Microsoft has long been rumored to be working on such technology, and there has been a flurry of activity in the cashierless checkout space ever since Amazon launched its Go stores last year. A number of startups are working on cashierless checkout with some, like Grabango, already in pilots with grocery chains.
While this deal with Albertsons is more of a general relationship announcement for Microsoft, the Redmond giant made a more concrete pact with Kroger last month. Microsoft is actually working with Kroger to build out two tech-heavy pilot stores that made extensive use of smart displays and sensors for inventory management. Additionally, those Kroger + Microsoft solutions are meant to be packaged up as a turnkey package that can be sold to other grocery stores.
Both of these announcements seem to be, at least in part, targeted at Amazon. First both of these deals involve Azure, Microsoft Cloud answer to Amazon’s AWS, so Amazon is being shut out of that line of business. But more broadly, ever since Amazon bought Whole Foods, grocers everywhere have ratcheted up their technology efforts to stave off Amazon from dominating the industry.
In addition to launching this new high-tech initiative with Microsoft, Albertsons is also getting into the robot game. The grocer partnered with Takeoff to build out a test mini-automated fulfillment center in the back of one of its stores. We’re actually talking with Narayan Iyengar, SVP of Digital and eCommerce at our upcoming ArticulATE summit in San Francisco in April. While he’s on stage, we’ll see what else we can get out of him about Microsoft as well.