NRF Big Show Report: Kroger, Starbucks and the journey to intelligent retail

Starbucks has long been revered for embracing innovative technologies to drive a superb customer experience and often cited, in the media and in the industry, as a leading model to follow when it comes to tapping mobile to meet consumer expectations.

One of its latest innovative moves was joining the effort to create Bakkt, a buy and sell platform company, for Starbucks consumers using bitcoin and other cryptocurrencies. A big partner in that quest is Microsoft.

In the grocery segment, Kroger is making similar innovative customer-centric moves. The latest is its "Retail as a Service" announced at the National Retail Federation Big Show held Jan. 13-Jan 15 at the Javits Center in New York City.

The 'RaaS' innovation is built on Microsoft's Azure cloud platform and taps big data, AI capabilities and enterprise software. Kroger will pilot a connected store experience and jointly market a commercial RaaS product with Microsoft.

A shared customer-centric philosophy

The technology innovations and respective Microsoft partnerships are just two of three strategic aspects that bind Starbucks and Kroger when it comes to intelligence retail.

The third, which is viewed just as critical as the first two, is the shared philosophy that the customer be the focus of each and every business move. 

Starbucks and Kroger are leaders in understanding that brands must know the customer, empower employees and build an intelligent supply chain in order to "re-imagine retail," said Shelley Bransten, Microsoft's corporate vice president, retail and consumer goods industries, who moderated the panel discussion, "Delivering on the promise of intelligent retail," on opening day of the NRF Big Show.

Joining Bransten on stage were Jeff Wile, Starbucks senior vice president, cloud infrastructure and retail tech, and Mary Ellen Adcock, Kroger vice president, retail operations.

The retail leaders shared insight on their respective brands' customer-centric strategy.

"Yes, we want to make your next latte but we're thinking more than that. We're thinking experiential, connecting with customer. It's not just another transaction," said Wile, defining intelligent retail as "how do we take things we do every day, make it simple, take all the noise out of the process?

"It's about making a special connection every time… focusing on stuff that really matters, trying to take out friction," he added.

One example of such friction came with Starbucks' innovative order ahead, pick up in store. Determining how and where to handle that mobile consumer pick up in the store required some strategy and decision making, he noted.

Another friction point for Starbucks was the manual labor management of the 15 to 20 in-store equipment pieces, all requiring daily setup, management and cleanup. Starbucks turned to Microsoft and its Sphere solution, an IoT platform, to begin connecting devices and eliminating much of the maintenance effort.

"What we did was pick something small and get a quick win. We showed success and demonstrated value," shared Wile, advising retailers and brands to be "always thinking of the customer experience."

Such technology is also allowing Starbucks to be more creative in other areas, such as delivering recipes to the machines in a more agile fashion.

Going forward a big focus is how to best to let consumers know, and try, the 300 various drinks available at Starbucks.

"How do we make it easy to sample and try, take friction out of the process. That experiential aspect is going to be the future," said Wile.

At Kroger the focus is also on improving both the customer and store associate experience across its 2,800 locations.

"It's about integrating new processes so we can see customers, where they are and how they shop. It's an exciting time. We are investing [in the stores and online] to create the seamless experience," said Adcock.

The store associate experience, she emphasized, is as critical a focal point as the customer experience.

A perfect illustration of that is the Kroger Enhanced Display for Grocery Environment (EDGE for short) cloud-based signage solution the supermarket is focused on deploying to 120 stores this year. The "smart shelves," generate tons of data being collected via IoT sensors.

In fact, as Kroger describes in a press release on the initiative, its IoT adoption with shelves and a food temperature monitoring strategy is making the grocer the world's largest IoT company.

But while store operational efficiency and customer insight are valuable, the IoT focus promises to let Kroger learn even more about what consumers want and need. Future EDGE demos have included a special app letting customers quickly find specific items, such as one with no salt, and allowing customers to link digital shopping lists to the system.

Such advancements, said Adcock during the panel talk, are all about being both employee and customer-centric.

"It's all about getting associates excited and how that becomes exciting for the customer," said Adcock.