Microsoft works with Coles Australian supermarkets on AI and personalization

Australian grocery store giant Coles is teaming up with Microsoft for a digital transformation project that it hopes will deliver $1 billion in savings by 2023.

Founded a century ago, the company listed on the Australian Stock Exchange in November, 2018 with the transformation plan announced in June. Its goals include automation, the addition of AI and machine learning, supply chain optimization and customer personalization.

In addition to working with Microsoft, Coles is also contracting with Ocado to build automated fulfillment centers in Melbourne and Sydney as well German logistics firm Witron to automate warehouses. It plans to use Azure with Office 365 and Dynamics 365. AI capabilities will stem from Azure.

"Our strategy will truly differentiate Coles in the Australian retail market allowing us to lead in online through an optimised network, as well as making Coles an own- brand powerhouse and a destination for health. It will also provide long term structural cost advantages through key partnerships while making us Australia’s most sustainable supermarket," said Coles CEO, Steven Cain, in a statement.

Coles' bid to add new technology is a result of changing consumer behavior. Research by Roy Morgan found 800,000 Australians are interested in buying groceries online. The announcement comes just a few months after similar partnerships with Walmart, Kroger and Walgreens in the US.

"How are we using energy in our refrigeration? How are we using energy in some of our in-store ovens for chickens? What’s ...