Kroger upgrades to cloud-based IT architecture for retail operations

The Kroger Co. has partnered with Google Cloud and Deloitte Consulting LLP to build a cloud-based IT platform that facilitates the creation and rapid deployment of apps, tools and technologies to sharpen retail operations.

According to Sunnyvale, California-based Google Cloud, Kroger recently implemented a range of Google Cloud data analytics, artificial intelligence (AI) and machine learning (ML) tools under an application framework co-developed by New York-based Deloitte and the Cincinnati-based supermarket giant. The companies said the new capabilities are now enabling store leaders and staff across Kroger to make real-time operational decisions that improve the shopping experience.

The nation’s largest supermarket operator, Kroger operates almost 2,800 supermarkets and multi-department stores and serves nearly 11 million customers daily.

“Innovation is a critical component, and execution is even more important. Google Cloud and Deloitte brought us a technology architecture and application framework that we could implement in record time,” Jim Clendenen, vice president of enterprise retail systems at Kroger, said in a statement. “We’re already seeing results across our stores, with associate tasks being optimized and overall productivity increasing.”

So far, Kroger has rolled out a pair of applications—for task management and store management—that were developed with Google Cloud and Deloitte to bolster associate productivity, the companies announced.

The task management app gives Kroger’s night crew managers more visibility into the volume and type of merchandise arriving on a given day, store staffing information and stocking needs. Next, the system prioritizes team activities “in just a few clicks” on an Android device to inform store associates of inventory or delivery changes in real time, Google reported.

With the new tools, Kroger store managers and department supervisors can conduct real-time evaluations of the in-store shopping experience. / Photo courtesy of Kroger

With the store management app, store leaders can rely fewer on paper tools, according to Google. A standardized audit checklist for store managers and department supervisors is designed to ensure a high-quality shopping experience for customers. Also, the app features a customizable walk path that guides store audits and gives associates more flexibility in the regular evaluations of store conditions.

“Technology and digital tools are fundamental elements of how Kroger continues to improve the associate experience, which in turn enhances the in-store experience for our customers,” Clendenen commented.

Deloitte built a “modern, event-driven architecture” for the Kroger applications using various Google Cloud technologies, Google noted. For example, Google Cloud’s AI and machine learning dynamically optimizes Kroger associate task lists based on inbound signals such as goods delivery data and staff availability. Google Cloud’s Spanner fully managed relational database also enables Kroger to create a ledger to capture unique events at different times throughout the day and from different stores to make better-informed decisions on associate productivity.

“Retail is in the details. One of the most important ones many retailers struggle with is how to maximize the time and talents of their associates when every store and every day is different,” according to Jose Luis-Gomes, managing director of retail and consumer for Google Cloud. “Kroger doesn’t just have the latest and greatest technologies. The grocer is literally putting them into the hands of their associates so their time can be used on what matters most for Kroger’s customers.”

The Kroger implementation, too, enlists Google Cloud’s Dataflow serverless data-processing service, which captures and analyzes data from a range of sources, including labor rates, transportation logistics, sales forecasting and out-of-stock information.

“Today, retailers are prioritizing and investing in technology as a strategic differentiator, and customers are making share-of-wallet choices based on those investments,” stated Jon Yoo, principal at Deloitte Consulting. “With Kroger, Deloitte and Google Cloud used that investment to build a platform that considers the unique balance of people, processes and technologies required to power revolutionary customer and associate experiences.”

The establishment of a cloud-based retail IT platform also comes as Kroger awaits the regulatory green light to proceed with its $24.6 billion deal to acquire Albertsons Cos. Combined, the retailers operate 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers and employ 710,000 workers.

At the National Retail Federation’s NRF Retail Big Show last week, Kroger Chairman and CEO Rodney McMullen noted that his company’s technology investments and costs are up exponentially yet are pivotal to its mission “to do everything we can to make it easy on a customer.”

“You look at the allocation of resources—both expense and capital—to technology, it would be three or four times what it was even five years ago. And we don’t see anything at all slowing that down,” McMullen said. “And one of the things in the merger with Albertsons that we’re working on is we’ve assumed very modest synergies on technology. Obviously, we won’t do overlap areas, but what we’re going to do is reallocate to be able to do even more, because technology affects everything that we do.”