Dive Brief:

• Kroger will debut high-tech shelf display technology at about 200 stores by the end of this year, according to Business Insider. "Kroger Edge" displays pricing and nutritional information in digital format and also features video ads and coupons.
• The goal is to have the system interact with shoppers' smartphones and note when something on their shopping list is available in the aisle they're walking down. A customer's dietary needs, allergies or other dietary restrictions would also be highlighted, Business Insider noted.
• Kroger Edge is currently being used in a few stores, but it only works by using a Kroger handheld device. The company is developing a special app enabling use by individual smartphones, Business Insider added, and Kroger plans to market and sell the system — developed with Microsoft's Azure cloud computing service — to other retailers around the world.

Dive Insight:

Such an innovative system has many benefits for Kroger: The company can cut overhead by quickly changing prices and announcing sales in all retail locations without having employees do so manually. Online orders could be filled faster since employees could potentially locate them more easily. Shoppers would appreciate the convenience of being able to more easily identify products on shelves, plus they may be able to receive mobile messages from Kroger to add items to their digital shopping lists. Then there's the potential revenue from selling the system to other retail grocery chains.

According to Business Insider, Kroger Edge "could change grocery shopping as we know it," and that doesn't seem to be an overstatement. Imagine walking down a store aisle and having your phone alert you to a sale on a product you have purchased in the past, showing you where it is on the shelf, telling you that it's gluten-free, contains less sugar and fewer calories — and maybe even displaying a scannable coupon.

While that may sound futuristic, such a scenario may be just around the corner. If shoppers can save time and money — and if they find the Kroger Edge system convenient and not too Big Brother-ish — the company could develop a degree of brand loyalty that no other retailer could match. 

The increasingly interactive shopping experience is an emerging trend across the retail industry. Lowe’s recently outfitted one of its California store’s with a bilingual robot guide, while Neiman Marcus has installed interactive mirrors in select stores that let shoppers do side-by-side comparisons of outfits, send videos to friends, and more.

There may be a few glitches as the Kroger Edge system rolls out, however. For one thing, not all customers have smartphones, and some of those who do may be confused by how it works, or possibly not appreciate the intrusion. Product recommendations should nudge rather than bombard customers, who likely won't want the equivalent of pop-up ads invading their shopping experience. The same goes for the amount of product data provided to shoppers, which could easily overwhelm some of them. But for those who can adapt to new developments, the system has the potential to remake the store experience.

This past fall, Kroger announced a growth strategy called “Restock Kroger” that includes a mixture of cost-cutting and strategic investments in data, digital innovation, store updates and pricing. Executives expect the strategy to produce $400 million in profit by 2020 and $4 billion in free cash flow over the next three years. Kroger Edge appears to neatly fit into that strategy by combining the four investment targets in one innovative system, and generating more value from the company's existing grocery stores.

Kroger has been out in the forefront of using customer data to personalize the shopping experience, and this shelf technology is one more development towards that goal.