Albertsons Cos. and Microsoft Corp. have officially announced a wide-ranging technology partnership to create a seamless multichannel shopping experience for the grocer’s customers and a more productive environment for its employees.
News of the alliance emerged nearly a month ago, but on Friday the two companies shed more light on what they envision with the deal.
At the core of the agreement, Boise, Idaho-based Albertsons will make Microsoft Azure its preferred cloud computing platform for immediate and long-term efforts to “digitally transform” customer interactions, sharpen operations and deliver better products and services, the companies said. That includes exploring how to use computer vision, connected sensors and other artificial intelligence technology — via Microsoft’s Azure AI and Azure Cognitive Services — to reduce “friction” for shoppers.
"We are reimagining the future to serve customers in a way they want to interact with us across all channels," Anuj Dhanda (left), executive vice president and chief information officer at Albertsons, said in a statement. "Our partnership has already produced an innovative way to save time at the gas pump. Microsoft's strengths in cognitive technologies, artificial intelligence and data science applied at scale at Albertsons Cos. will transform the customer experience in our stores and digitally."
Eliminating “friction” for shoppers and employees
At the store level, benefits could include making it easier for customers to find the products they want and reducing wait times at the deli or meat counters and at checkout. And on the back end, Microsoft’s intelligent solutions can help store managers and associates anticipate out-of-stocks and misplaced products, the companies said.
“We know our consumers are changing how they interact with us, so we want to move with them and be where they want us to be,” Ramiya Iyer, general vice president of digital stores and pharmacy at Albertsons, said in a Microsoft blog on the partnership. “It’s about advancing choices and making those choices even better.”
Albertsons already is leveraging Microsoft’s platform to speed transactions at the gas pump. The retailer is piloting a mobile app called One Touch Fuel at 27 of its nearly 400 gas stations. Using Microsoft Azure and geo-fencing, the app enables customers to pay for fuel, redeem rewards and activate the pump by tapping on their smartphone — saving an average of 90 seconds during a fuel-up, the companies said.
Because the app is hosted on Azure, receipts are saved digitally and discounts from Albertsons’ Just for U rewards program are applied automatically. Customers also can store credit-card information, so there’s no need to dip a card, enter a ZIP code or go through other pump prompts. Plans call for the retailer to launch One Touch Fuel at more of its gas stations this year.
“Everybody who uses the app finds it very convenient and likes how it saves time,” said Mark Schumacher, senior director of fuel and convenience at Albertsons.
For Albertsons’ employees, the cloud-driven Microsoft 365 service is enabling corporate staff to collaborate across the organization and furnishing store associates with ready access to the information they need to serve shoppers. The latter function is accomplished through Albertsons’ Retail Portal, which provides store staff real-time access to specials, promotions, product recalls and other information.
Albertsons also has migrated its digital workloads — including e-commerce sites and loyalty applications — to Azure and is employing Azure Active Directory and Microsoft Intune to provide employees secure access to solutions across devices.
Given Albertsons’ scale, the cloud-based services can make a big impact, according to Redmond, Wash.-based Microsoft. The retailer operates 2,277 stores, including 1,743 pharmacies and 395 fuel centers, plus 23 distribution centers, five Plated meal-kit fulfillment centers and 20 manufacturing facilities. Its store banners include Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Sav-On, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street, Amigos, Haggen and United Express.
"Customers today have endless choices when it comes to where they shop for groceries, gas and everything in between," said Shelley Bransten, corporate vice president of worldwide retail and consumer goods at Microsoft. "We're excited about the unique experiences that Azure and Azure AI are enabling for Albertsons Cos. that will allow it to build loyalty in this fiercely competitive market."
More data power
Albertsons said it aims to build its data and analytics platform on Azure as well. That mission is twofold: gaining more insight to set predictive scenarios that store managers can use to anticipate and act on revenue-driving opportunities and leveraging the data to provide more relevant promotions that customers can act on while in-store.
“The whole idea is that we’re able to create personalized deals for millions of customers based on what they shop for, how they shop and what we believe they would want to consider,” Dhanda explained in Microsoft’s blog. “We’re using data to get effective and efficient to really meet our customers’ needs.”
Albertsons also is tapping Microsoft’s data science to streamline its supply chain, which encompasses thousands of manufacturers and growers, 2,000 trucks, 2,280 stores and an average of 50,000 products per store. Microsoft noted that having the latest data will help Albertsons better align supply and demand, keep food fresh, serve shoppers, and forecast weather- and event-related impacts.
“Data is the lifeblood for optimization of the flow and carrying the widest, smartest variety of products,” Dhanda commented.
The companies added that their partnership is part of Albertsons’ increased digital investments. That includes installation of customer Wi-Fi in stores, enhancements to mobile apps, and expanded services for on-demand deliveries and pickup of groceries and Plated meal kits. Last year, the retailer also launched a pilot last year to deliver deli meals via Grubhub. In its most recent quarterly report, Albertsons said e-commerce sales rose 73%.