Loblaw teams up with Microsoft on digital transformation

Count Loblaw Cos. as the latest major grocery retailer to partner with Microsoft Corp.

Canada’s largest food and drug retailer is leveraging the IT giant’s cloud computing, data analytics and artificial intelligence (AI) technology to help power its digital transformation, with a focus on developing a more personalized experience for customers, according to Kevin Peesker, president of Microsoft Canada.

Loblaw integrated Microsoft AI technology into the PC Optimum loyalty program to tailor offers to customers' online preferences.

“To help support their multi-year transformational journey, Microsoft is partnering with Loblaw as they strive to unlock new opportunities with AI, machine learning, data and the cloud,” Peesker said Tuesday in a blog post.

Loblaw joins the top five U.S. grocery retailers by sales — Walmart, The Kroger Co., Costco Wholesale Corp., Albertsons Cos. and Ahold Delhaize — as Microsoft cloud customers.

The Redmond, Wash.-based tech company unveiled sweeping partnerships with Kroger and Albertsons in January and with Walmart last July to use its Azure cloud platform to help drive their digital initiatives. Costco adopted Azure as its hybrid cloud platform in 2017. Other food and drug retailers using Azure include Walgreens Boots Alliance, which announced a partnership with Microsoft in January, and Giant Eagle.

Related:Loblaw pilots more personalized advertising

Peesker said Loblaw worked with Microsoft to integrate its AI technology into the retailer’s PC Optimum loyalty program to tailor deals and offers to members based on their online preferences.

“We’ve partnered with Microsoft to create digital experiences that not only meet our customers’ expectations, but exceed them,” said David Markwell, senior vice president of information technology at Loblaw.

A key objective was to “democratize” customer data stored in siloes, a project that Loblaw and Microsoft were able to accomplish in 90 days, according to Markwell.

“With the data already collected but separated into different customer experiences, it made sense to move it all to the cloud and to leverage AI tools to drive results,” Markwell (left) explained. “With AI, I see this democratization of knowledge and ability to make decisions being moved out into the business units.”

Using Azure to securely store and process data, Loblaw redesigned its customer data by disassembling the siloed information and then anonymizing and aggregating it to build a feature to customize offers to PC Optimum members at scale.

“It allowed us to cross-pollinate user experiences and deliver it to millions of people at once,” said Peter Danforth, vice president of loyalty program strategy and management for Loblaw. “What AI enables us to do is make a decision at a scale that was just impossible before.”

Related:Albertsons eyes ‘frictionless’ grocery shopping

By using Microsoft’s cloud and AI solutions to redefine the customer experience, Loblaw was able to develop more personalized deals, making a stronger connection with its shoppers.

“Predictive AI can help us to communicate on a one-to-one basis with each customer or provide relevant offerings to each customer,” said Jenny McConvey, director of targeting support and systems at Loblaw.

Loblaw is realizing internal benefits from Microsoft’s platform as well. Open-source cloud solutions, for instance, have lifted barrier between departments and enabled staff to work faster and collaborate in new ways. “It’s taking subject matter experts from different areas and bringing them together to work on one project,” noted McConvey.

The cloud solutions also have allowed Loblaw to provide its digital teams with a familiar technology toolkit and help them build new skills, including a machine-learning practice.

“It’s really about how our processes are being changed. There’s things that you really want to use AI for, there’s things that humans are really good at, and there’s things where they can collaborate,” said Markwell.

“Microsoft AI has stepped up and helped us accelerate our transformation,” he added.