BRIEF

Kroger outlines new commercial technology venture

AUTHOR

Jeff Wells@JeffWellsWH

PUBLISHED

March 22, 2018

Dive Brief:

• Kroger has established a commercial business that licenses the grocer’s proprietary technology to other companies, according to Annette Franke, vice president of Kroger’s customer experience network and chief operating officer of Sunrise Technologies, during a presentation at the Shoptalk conference in Las Vegas this week. 
• The company will offer several technologies to interested parties, including its interactive shelf edge system; its remote-monitor temperature control system, known as Food at Safe Temperatures (FAST); an employee management technology called RAD; and Zooter, a camera that can help employees track merchandising programs and inventory. Franke said Kroger has already begun piloting its Kroger Edge system abroad. “We’re piloting this technology in multiple countries and on multiple continents,” she said.
• “Our industry is being disrupted, and we are actually very committed to becoming a disruptor, and also helping others be positioned to succeed and win by leveraging some of the technology that we’ve built for ourselves,” said Franke.

Dive Insight:

During her presentation at Shoptalk, Franke said the seed for Sunrise Technologies was planted at an awards ceremony recognizing the company’s technology. There, companies approached Kroger and asked if it would consider commercializing any of its innovations.

“That was when we started to have serious conversations about, ‘should we become a technology company that sells groceries, and really figure out how to leverage the technology that we’re developing and have [intellectual property] on for others in the industry?”

With its scale and focus on innovation, Kroger has been developing cutting-edge retail technology for years. Its most recent entry, Kroger Edge, links shoppers’ mobile phones to electronic shelf displays to offer special pricing and promotions across the store.

That technology, said Franke, seamlessly blends customers’ digital habits with the in-store shopping experience. But even though the idea of “seamless” integration is a goal for Kroger and for so many other retailers, making it happen can be an operational headache.

“Although it’s easy to say, it is hugely difficult to achieve, especially if you are a grocery retailer that has a long history with a large legacy footprint.”

Another intriguing Kroger technology, the stereoscopic camera known as “Zooter," gives employees a broader look at the store, helping them check for out-of-stocks and track the effectiveness of in-store promotions.

Now, Kroger wants to license these technologies to other companies. This could be a lucrative opportunity for the grocer, since companies across the retail spectrum are looking to upgrade their systems and their store experience, but don’t have the capability in-house. In grocery retail, Amazon’s acquisition of Whole Foods, Walmart’s evolution and the overall fragmentation of the grocery industry have retailers eager to modernize — and vendors scrambling after them.

Sunrise Technologies represents the latest revenue stream for a supermarket chain that’s eager to push outside of price-squeezed groceries. Last year, Kroger opened its first restaurant, a stylish comfort-food joint called Kitchen 1883, near its Cincinnati headquarters. This year, it will launch its own clothing line, beginning with Fred Meyer stores. Kroger is also pushing into meal kits, and reports have linked the chain with Ace Hardware on a co-location deal.

Some question Kroger’s expansion beyond its core competency. And in some cases, this may be warranted. But store technology is very much an area of expertise for the grocer. Other companies no doubt understand that, and will likely take a considered look at what the chain has on offer.