Coles Group Ltd (ASX: COL) shares are having a positive session on Tuesday.
In morning trade, the supermarket giant's shares are up 1% to $18.36.
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Why are Coles shares rising?
Today's gain appears to be due to a broad rally in the consumer sector today, which is lifting most consumer staples shares.
In addition, there is a piece of news out of Coles today that could be raising a few eyebrows.
This morning, the supermarket operator announced a five-year agreement with tech behemoth Microsoft (NASDAQ: MSFT).
According to the release, the two parties have agreed to a strategic partnership that will see them collaborate and co-innovate on a range of digital initiatives. These are being designed to help Coles grow its sales and ecommerce capabilities, increase operational efficiency, and enhance customer experiences.
The release notes that Coles will leverage Microsoft's cloud, artificial intelligence (AI), and edge computing capabilities to build an AI-as-a-Service platform, modernise its IT estate, and unlock more opportunities to use AI and machine learning.
The supermarket will work closely with Microsoft to deliver a more personalised and consistent shopping experience by using technologies like Azure OpenAI Service. It will also empower and develop customer-focused teams through the use of generative AI copilots.
AI plans
The company revealed a few ways in which it plans to use AI in its supermarkets.
In respect to the AI-as-a-Service platform, the first use call will be Tell Coles. It 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.
As for enhancing customers' digital experiences. It plans to achieve this with "hyper-personalisation that reflects Coles' value."
It notes that with "Microsoft Fabric at the core of the Coles Digital Data Platform, 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 include prototyping a digital chef to provide personalised meal solutions, recipes, and cooking tips to customers based on their preferences and dietary needs.
'Helping Coles stay ahead'
Commenting on the partnership, Coles' chief technology officer, John Cox, said:
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. 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.
Microsoft ANZ's managing director, Steven Worrall, was pleased with the partnership. He adds:
We're thrilled to deepen our partnership with Coles, a true leader in Australian retail. 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.
