Kroger
Founded in 1883 by Barney Kroger in Cincinnati, Ohio, Kroger Co. operates nearly 2,800 stores in 35 states. Kroger is the nation’s fifth-largest general retailer and ranks 25th on the Fortune 500 list of the largest U.S. companies by total revenue.
Since its founding nearly a century and a half ago, Kroger has been a pioneer in innovation. Kroger’s early efforts were based on the pioneering principle of making fresh food accessible to all consumers. More recent innovations have included private label manufacturing, grocery delivery, and product quality control and testing. In 1972, Kroger became the first grocery retailer in America to test an electronic scanner. More recently, Kroger launched QueVision, a payment program that reduced the time customers waited in line to pay from minutes to seconds.
Over the past few decades, Kroger has turned to the application of advanced data and analytics to fuel the next steps in business innovation. Since its inception decades ago, Kroger’s loyalty program has enabled a trusted exchange of value powered by permission-based insights. Today, powered by machine learning algorithms, Kroger delivers valuable, personalized offers and communications across 150 million customer touchpoints and through 1.9 billion unique personalized coupons to millions of loyal customers.
I recently had the opportunity to speak with Todd James, who serves as Chief Data & Technology Officer (CDO/CTO) at 84.51°, a wholly owned subsidiary of Kroger that operates as a data science, analytics, and retail media company. Last month, I hosted James on a Chief Data Officer panel I moderated at MIT CDOIQ Annual Conference held in Cambridge, Massachusetts. James explained that 84.51° helps Kroger create more personalized and valuable experiences for shoppers through the application of data, analytics and now AI.
Powered by cutting-edge data science, 84.51° leverages first-party retail data from more than 62 million U.S. households from the Kroger Plus loyalty card program to power a more customer-centric journey. As Kroger’s leading internal data science capability, 84.51° works seamlessly with other groups across the company to deploy and leverage advanced analytics solutions across the enterprise.
James brings a wealth of experience to his role at 84.51° and Kroger. He was previously senior vice president of data, analytics and intelligent automation at financial services giant Fidelity Investments, where he held various leadership roles for nearly fifteen years, and prior to that, he led a technology services practice for Deloitte Consulting. James began his career in the U.S. Coast Guard, where he served as an officer for nearly eight years. He is a graduate of the U.S. Coast Guard Academy.
I asked James about his role and mandate at 84.51° and Kroger. He explains, “I have responsibilities both within 84.51° as the Chief Data and Technology Officer, and within Kroger where I am responsible for driving the AI program and enterprise data.” James continued, “My role ranges from a very traditional IT-focused role, to a data-driven role. management data, to one that resides in the company and is focused on the application “I expect this role to strengthen in the coming years, with a preference for creating value for the company,” he adds.
A lot Fortune 1000 companies have struggled The role of Chief Data Officer is largely a new role created in the last fifteen years to help businesses leverage their data. Today, good data is the foundation of good AI. James sees the role of Chief Data Officer as “a transitional role to help manage a ‘once in a lifetime’ restructuring focused on data management. After the transition, the CDO could be separated, with the core data management and governance components returning to IT, and the more strategic analytics parts of the role could be transferred to data-savvy business leaders.”
James adds, “While the CDO role at Kroger has nuances in how solutions are implemented at different levels of scale and across different organizational structures, the common, aligned thread is the ability to drive value for Kroger’s customers, clients and associates through a robust portfolio of data and analytics assets.”
Driving customer satisfaction through data-driven personalization and AI
So how does Kroger use data and analytics to improve decision-making across all aspects of its business? Basically, Kroger uses data and analytics to create a personalized experience for Kroger customers at every stage of the customer journey. This is done in a way that aims to make the customer’s shopping experience easier and bring more value to the shopping experience for Kroger customers.
James focuses on three key business priorities:
- Deliver a transparent, prioritized AI portfolio — to increase value that unlocks new capabilities, improves customer experiences, and simplifies associate tasks.
- Democratize and create a new algorithmic basis – to enable better access to AI in an efficient and responsible manner.
- Build partnerships across the organization to drive education and awareness about how data and analytics can be used – to generate value, create new business models, and change the way work gets done.
Kroger currently serves approximately 23 million digitally engaged households, and delivers approximately 500 billion “open my cart” recommendations each year. James notes, “Data serves as the foundation, which is driven by automation and relevance science to deliver a relevant and personalized customer experience across the shopping journey.” James continues, “A key focus for the organization is to continue to improve and augment the science of personalization, data, and the experience itself in a way that delivers value and simplicity to customers from the moment they interact with a touchpoint like a promotional email to the moment they open their cart.” Using relevance science, Kroger has simplified the process of filling online shopping carts, making the journey “approximately 4.5 times faster over the last few years,” according to James.
Measuring the business value of your investment in data, analytics and AI
More recently, Kroger has been exploring ways AI can be deployed to improve the customer experience. “We’re using AI-powered dynamic batching to reduce pickup time while improving the store associate experience,” James says. “Using the power of machine learning and AI, we’re developing new ways to improve the pickup experience for customers.”
James explains how this solution sorts “200,000 bins per second to create the most efficient picking cart, resulting in a 10% reduction in steps by identifying the most efficient picking route in the store,” helping Kroger reduce order fulfillment time for customers. He concludes, “With dynamic batch order processing, these tools provide associates with the most efficient picking routes, allowing us to significantly reduce pickup time in our highest-volume stores.”
Improving the customer experience and creating business value are at the heart of Kroger’s investments in data, analytics and AI. Today, AI is embedded in business strategies, with transparency and accountability at multiple levels of the organization, including the leadership team. James notes, “Work is being prioritized to ensure investments are directed to initiatives that have the greatest impact on unlocking Kroger’s strategies.” He continues, “We are in the midst of a once-in-a-generation global reimaging that is accelerating the transformation of businesses and society as a whole. It is imperative that we invest to support the organization through this change.”
Reflecting on the current state of data and AI at Kroger, James comments, “While the technology we use is exciting, our investments begin and end with enabling the business for our customers and associates.” James notes, “We invest in data to support AI and use AI to enable the business.” He concludes, “At our core, Kroger uses data to make people’s lives better. Whether it’s empowering our associates with data-driven insights or creating more relevant and simplified customer experiences through a trusted value exchange, our goal is to use data enabled by advanced analytics to create the best possible experiences for our customers.”
