Coles Group Limited (ASX: COL) has a plan to utilise artificial intelligence from Microsoft to help improve its operations and grow profit.
After 10 years being owned by Wesfarmers, Coles Group was split from the broader Wesfarmers conglomerate (which owns Bunnings Warehouse) in November 2018. However, the Coles name has operated in Australia for 100 years. Today Coles is one of the largest retailers in the country, serving 21 million customers per week across its supermarkets, Coles Express, Online, Vintage Choice and others.
Coles’ Microsoft AI Plan
The supermarket giant has a signed a deal with Microsoft to utilise the US tech giant’s artificial intelligence and other capabilities to improve its supply chain, product range, customer service and workforce according to the Australian Financial Review.
Coles will be using the Microsoft Azure platform with the Dynamics 365 enterprise resource planning and modern workplace suites. Part of the agreement involves Coles getting direct support from Microsoft’s global product functions.
The idea is that Coles will construct an ‘enterprise’ data platform on Azure to increase the analytics and AI usage for the performance of its stores. Some of the things the areas that Coles hopes will be improved are: forecasting, shelf stock, tailoring products to suit the local community, and understanding which products are substitutable and which are not.
The AFR
also reported that Coles will use the AI to make better personalised offers by looking at past purchases, but also the weather and local community events.
Coles chief information and digital officer Roger Sniezek was quoted by the AFR, “By using this huge power of Azure it enables us to do computation on a scale we couldn’t do before because we were limited by the amount of tin we have on site.”
Is Coles A Buy?
I like that Coles is trying a number of different things to boost its future earnings such as a deal with Ocado, automated distribution centres and a whole new strategy.
However, with the Coles price trading close to its all-time high, I am very hesitant to think about buying shares with so much competition in the industry. The reliable ASX shares in the free report below could be better ideas in my opinion.
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