Kroger IT Management and the Pain of Reality
October 12, 2015
In Harrod’s Creek, we have access to a giant store doing business here as Kroger. There is an all organic outfit down the hollow. I like that outfit. The prices are higher for some things, but the store is human scale. The Kroger warehouse requires me to walk almost 500 meters to get my dogs treats, my wife some ersatz milk product, and for me to stock up on Mountain Dew and M&Ms.
The salad bar is history, replaced with plastic boxes of pre-jigged stuff. The Fancy Dan foods cost the same and Organic City, so many folks in this area avoid the Kroger offerings. The center of our store houses Wal-Mart and Home Depot type products. I don’t think about buying red and blue non stick pans when I do a trip to the grocery for my wife.
I read with considerable interest “Kroger CIO: Four lessons for strategic IT.”
Each time I visit the Kroger in Harrod’s Creek or more accurately, Prospect, Kentucky, I fear the Hitachi based automatic check out systems. Kroger is trimming humans at check outs, presumably the Hitachi units are better, faster, and cheaper.
A trip to the local chain grocery can be an enjoyable experience. Don’t forget your customer loyalty card. Don’t complain about the difficulty of finding a product. Don’t hassle the Kroger humans about one price on the product and a different price in the Kroger database. Have a nice day.
I learned from Chris Hjelm, the CIO, of Kroger, one of the world’s largest companies, that information technology must be relevant. I wonder, “To whom, Mr. Hjelm.” Your boss, to suppliers, or to the individual customer? Mr. Hjelm is responsible for managing the company’s nationwide network of Information and Technology Systems, including systems used in retail stores, manufacturing plants, distribution centers and offices, as well as Research & Development. He also oversees 84.51°, Aviation, Corporate Travel, Indirect Sourcing, and the Check Recovery Center.” He has an honorary PhD degree and before joining Kroger in 2005, he was CIO of Cendant’s Travel Distribution Services, eBay, and Excite@Home, and a CIO at Federal Express. He “has a particular passion for food and is an aspiring amateur chef.” Cendant broke up into four companies. eBay is an online flea market. Excite@Home was a darned exciting outfit when it purchased Kendara’s personalization technology before Excite lost its excitement. FedEx, well, FedEx ships stuff.
Now what are the lessons for strategic IT. I assume this is different from making information technology actually work.
First, the lesson numero uno is to earn credibility as a reliable service provider. I think this means deal with vendors who will implement systems which meet the needs of the Kroger person or unit with an IT need. Yep, making stuff work is good.
Second, one must learn the business. This is no small task when one considers that work experience in shipping, Internet flame outs, online flea marketing, and travel may not seem to be directly related to selling groceries. No, I understand. The IT part is the fiber of these businesses. Ergo, food is just like eBay.
Third, form relationships with one superiors. Okay, that seems to be a safe statement. Due to the ultra conservative, siege mentality of most senior executives in many traditional businesses facing heat from online vendors, that’s good. Keeping one’s job is strategic.
Fourth, use experts. Nay, rely on experts. The good manager, it seems, can terminate experts or ignore them if down the hall. The strategy may reinforce self preservation like the relationships with those higher on the food chain (pun intended).
Now reality. Annoying reality.
At the local Kroger, senior management have deployed self check out units. Most of the time, about one third of the available units are operating. The reason is management’s desire to funnel customers to few self check outs and thus reduce the need for expensive humans who have to intervene frequently when customer transactions go off the rails.
Example: I bought an Ambrosia apple, number 3438. The Hitachi scanning system registered one pound of cheddar cheese. A moonlighting law enforcement officer was at the self check out and managed to clear the transaction. I got the apple for free. Ah, an annoying anomaly.
The new Kroger stores are large. They are organized according to the type of anti social thinking pioneered by Paco Underhill; to wit, make customers who want bread and fruit and milk walk from the entrance along a path of an equilateral triangle. Why put frequently purchased products in one convenient location? The strategy is to force a person to walk so the person will buy stuff not on the person’s list.
The scale of the products in our local Kroger is astounding. One employee told me that were more than 90,000 things in the story. Wow, how many red skillets sit for months without a human touching them? How much food is dumped at expiration time because no one buys the product?
Our local Kroger offers printed on paper maps, not mobile content, to help a customer find a product. Do you know where mustard is? Do you know where a mixture of mustard and relish is? Answer: in separate aisles, not together.
Kroger cannot alphabetize. Look at the signs hanging from the ceiling list products in an aisle. Are these alphabetized. Nope. Waste of time.
Everything in the Kroger—from the database which is out of sync with the product codes to the location of the products—is presented in a way that says, “Hey, go to Paul’s or Fresh Market.”
What is the information strategy at Kroger stores?
- Create a perception of credibility among your co workers and colleagues.
- Implement the routine business and learn the camp fire stories about how wonderful Kroger was and is.
- Get to be pals with those with more Kroger juice
- Use those consultants because it is easier to deflect criticism than take responsibility for tasks.
Kroger is a grocery store. Information technology should make it easier for customers. IT should make it possible for management to know when databases are not in sync. Partners can use Kroger IT to reduce waste and inefficiency.
Kroger, like any retail chain based on the build it they will come principle, will have to deal with two types of technical debt. Like credit card debt, the interest adds friction to keeping the flawed systems u9p and running. Like Walgreen’s, the interest on the real estate is not chimera.
Excitement is ahead for those living the retail dream in a world in which Amazon wants to use technology to eliminate the need to experience the pain and waste the time dribbled away at the grocery store.
Has Kroger IT entertained this statement, “When will that automated delivery arrive? I just ordered 10 minutes ago.” Amazon, are you listening?
Stephen E Arnold, October 12, 2015
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