Dive Brief:

• Retail Business Services, Ahold Delhaize’s services company, opened a 30,000-square-foot office this week in Quincy, Massachusets, which houses 200 information technology employees and an innovation lab, according to a company press release.
• The effort is dedicated to discovering technologies that improve the in-store experience for customers and make grocery shopping easier, according to the company.
• Retail Business Services also hosts a six-month incubator program and engages in partnerships with startups, universities and other entities that focus on grocery retail.

Dive Insight:

Technology is sweeping the supermarket and Ahold Delhaize’s new office is intended to help it keep pace with some of the biggest players in the game, including Walmart and Kroger. Grocers are not inherently tech companies, so partnering with a tech giant or creating an in-house division to focus on innovation is becoming more common.

Ahold Delhaize has been laser-focused on technology since its marquee merger in 2016, including using AI-driven supply chain solutions to more efficiently stock store shelves, opening an artificial intelligence research lab last year and rolling out 500 shelf-scanning robots in its Giant/Martin’s and Stop & Shop stores.

Walmart has a technology center in Austin, Texas, that accommodates a mix of its own engineers and Microsoft’s engineers. Kroger has also partnered with Microsoft to create a "connected store system” while H-E-B is putting the finishing touches on a new 81,000-square-foot technology headquarters in Austin, Texas.

Target and Kroger have both partnered with incubator and innovation labs to attract tech startups to reinvigorate the grocery space and stay relevant to younger, tech-savvy shoppers. 

Consumers are most concerned with convenience and in-store experience these days, and technology is the main tool that retailers are using to deliver what they want, with 49% of retailers focused on in-store mobile experience, accoding to BRP Consulting. Almost everyone has a smartphone in their pocket these days, making it a powerful tool for capturing customers’ interest and wallets.

Many retailers have invested in creating technologies that help shoppers check out faster. Sam’s Club is testing a faster Scan & Go mobile technology that allows users to merely hover their phone over an item without scanning the barcode, for example, while Meijer is adding it’s Shop & Scan feature to 23 new locations. Amazon has been expanding its cashier-less store concept, Amazon Go, with a second location recently opening in New York City.