By Carlo Versano
The threat of Amazon looms large for grocery chains, especially after the e-commerce giant acquired Whole Foods and appears to be moving full speed ahead on its Amazon Go cashier-less concept. Determined to avoid the fate of the bookstores that once underestimated Jeff Bezos' vision, some grocery stores are choosing to partner with tech companies in order to quickly introduce new consumer-facing innovation to the produce aisle.
Albertsons, America's second-largest grocer, is the latest to announce one such partnership: a deal with Microsoft ($MSFT) to use its cloud and A.I. products to make "every element"of the grocery-buying experience "frictionless" for consumers, according to Albertsons CIO Anuj Dhanda.
Retailers like Albertsons are following the example of other businesses, like the parent company of Applebee's and IHOP, which told Cheddar the company is reviewing all the pain points that its customers report. For a restaurant like IHOP, that means developing technology that automates parts of the experience and helps people avoid a wait for a table, or allows them to pay on a tablet rather than wait for their server.
For a grocer like Albertsons, it means helping them avoid choke points at the register or finding items faster, Dhanda said. "They don't have to do things they don't like."
The winners of the grocery wars will be the chains that can provide shoppers with more choice and convenience via automation, Dhanda said. Albertsons has already seen this strategy bear fruit with its gas app, which runs on Microsoft and uses GPS and mobile payment tech to let drivers unlock the pump and pay for gas through their phones. Dhanda said that pilot program has been a hit with customers.
Microsoft, for its part, has partnerships with Kroger ($KR) and Walmart ($WMT), two of Albertsons' main rivals. In the old days that might have mattered, but when the common competitor is Amazon ($AMZN), as the saying goes, the enemy of my enemy is my friend.
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