Coles Group and Microsoft will collaborate and co-innovate on a range of digital initiatives following the announcement of a new five-year strategic partnership.
The agreement builds on Coles and Microsoft’s longstanding relationship, which included a strategic partnership in 2019 and a workplace transformation in 2021. The latest partnership aims to help Coles grow its sales and ecommerce capabilities, increase operational efficiency and enhance customer experiences.
“We are delighted to refresh our longstanding partnership with Microsoft to drive our strategic priorities and create more value for our customers, team members, suppliers and shareholders,” said John Cox, Chief Technology Officer at Coles.
“We strive to provide delicious, easy and affordable food and drink to our customers. I’m excited that our partnership with Microsoft is not only helping us deliver this consistently – from online to instore or through home delivery – but also helping us move beyond the hype around AI so we can use it to delight our customers with enhanced experiences across their customer journey.”
Key initiatives
Coles will work closely with Microsoft to deliver a more personalised and consistent shopping experience, using technologies like Azure OpenAI Service. It will also empower and develop customer-focused teams through the use of generative AI copilots.
In addition, the partnership will focus on growing diversified revenue streams for Coles by reaching more ready-to-buy shoppers, increasing the level of personalisation, and capitalising on market insights through its Coles 360 retail media business.
Some of the key initiatives that Coles and Microsoft will work on together include :
Building an AI-as-a-Service platform: The platform will enable the safe, secure and responsible rollout of Azure OpenAI use cases across Coles. The first use case, Tell Coles, is a generative AI model that generates customer sentiment insights based on customer feedback surveys and delivers them to store managers to drive on-going improvement in customer experience.
Expanding Coles’ edge computing platform: Coles’ ‘Intelligent Edge Backbone (IEB)’ supports computer vision and machine learning outcomes. Coles and Microsoft will co-innovate to explore how the IEB can connect and manage IoT devices across Coles’ supply chain and into stores to advance Coles’ sustainability goals, improve customer experiences, reducing stock loss, and boost team member productivity and safety.
Enhancing customers’ digital experience: Machine learning models will provide real-time, individual and family-relevant recommendations consistently across all digital channels. Early plans to leverage AI-as-a-Service (Azure ML) include prototyping a “digital chef” to provide personalised meal solutions, recipes and cooking tips to customers based on their preferences and dietary needs.
Simplifying tools to drive productivity and targeted customer experiences: Coles will modernise and re-platform tools used by its people to provide simpler, more efficient solutions.
Modernising Coles’ data and analytics platform: Coles has established a modern data platform provides richer and faster insights to business users at a lower cost, through data democratisation and streamlining access to both historical and real-time data.
Empowering retailing
“We’re thrilled to deepen our partnership with Coles, a true leader in Australian retail,” said Steven Worrall, Managing Director at Microsoft ANZ.
“Together, we’ll leverage Microsoft’s cloud, AI and edge computing capabilities to drive meaningful transformation, helping Coles stay ahead in an ever-evolving, customer-first landscape.
“This partnership is a great example of how our technology empowers retailers to innovate, grow and deliver exceptional value in a highly competitive market,” he said.
“Microsoft’s proven expertise and innovative solutions will help us build the digital foundations and enablers that will empower us in our purpose of helping Australians to live and eat better every day,” added Mr Cox.
Recently, Coles and Microsoft used several AI models to develop the retailer’s IEB, which makes 1.6 billion informed predictions each day so customers can find exactly what they are looking for across its 850 stores.
Coles and Microsoft will continue to explore new opportunities and areas of collaboration as part of their long-term strategic partnership.