Case Study 3
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Western Kentucky University *
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Information Systems
Date
Dec 6, 2023
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docx
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Uploaded by peytonnrobinson
Kroger Case Study 3
1.
a) What were the key trends that were driving grocery firms towards digital
transformations? Would you characterize such transformations as largely vision-driven
or technology-driven?
The key trends that were driving grocery firms toward digital transformations was the mutations
of the COVID-19 virus could once again bring the world to a stop, that allowed Kroger’s sales in
its third quarter of 202 grow by 1.9b, a growth of 11.3% over the same period in 2019. Another
trend was that smaller players such as Aldi, Lidl, and Publix were increasing their revenues, the
digital transformation initiative would rescale the company to allow them to regain their footing.
I would characterize it as technology driver because digital sales were increasing by 21% while
other aspects were decreasing. During the pandemic era online grocery orders received grew by
151% in just four days when the virus lockdown spread across the country.
2.
b) How would you assess the success of the digital transformation of Kroger? Based on
your analysis, what conclusions would you draw about the sustainability of the digital
transformation efforts?
Kroger’s digital transformations efforts was based off the revenue growth that led to increase sale
and profitability over time which in 2020, Kroger reported that it had engaged in over 1.3 billion
interactions across its digital interfaces, a 30% increase over 2019. The next effort was customer
engagement and operational efficiency that improved the efficiency of Kroger’s operations to
reduce inventory costs, improve supply chain management as well as customer satisfaction to
improve high satisfaction from their customers based off successful digital initiatives which the
company reported the retention for customers who shopped online and in store was 98%
underscoring the evolving hybrid nature of the business. The increase in marker share showed
the effectiveness of their digital strategies and the overall innovation and adaptability that Kroger
was able to do to adapt to the changing market conditions to stay competitive in the long-term
areas of business.
3.
c) In addition to the digital strategies implemented by Kroger mentioned in the case
study, what other digital strategies would you implement to maximize customer
experience, personalization, and customer engagement?
I would implement virtual shopping assistant that would allow the customers to chat or call the
assistant to help customers to find products, make shopping list or look for certain recipes if
needed and this would provide real time assistance even online shopping. Al powered
recommendations that would advance recommendation engine that uses machine learning
algorithms that would provide personalized product suggestions to the customers based on their
purchase history and preferences on products they purchase.
4.
d) Explain in detail the purpose of the Restock Kroger initiative.
The purpose of the restock Kroger initiative was redefining customer experience, improving
operational efficiency, increasing digital transformation, and accelerating a profitable growth.
Online sale was growing at a steady rate, while in store has remained flat so redefining customer
experience would allow Kroger to enhance the customer experience at every single point of
interactions from physical stores to the digital realm. Overall, the data and personalization
became a central engine that would elevate the customer’s experience. Kroger improving
operational efficiency would leverage data and technology to optimize inventory management,
decrease waste and improve the operational efficiency and increasing digital transformation
would show the importance of digital transformation, aiming to make Kroger a competitor in the
digital grocery space that would involve investments in e-commerce, data analytics and the
digital marketing to serve and engage customers at border aspect. Accelerating profitable growth
is understanding the technology and data in an aspect to better understand customer behavior,
follow offerings, and make smarter data driven decision that would lead to increase in sales and
profitability.
5.
e) Explain in detail the role that the Kroger’s analytics division 84.15
0
played in the
digital transformation of Kroger.
84.15 played an instrumental role on Kroger’s analytics division by combining infrared and IoT
technologies with video analytics, where Kroger was able to track the time of day when
customers entered each store and how long their shopping activity took. The AI algorithms
dynamically predicted and signaled where staff would be in areas of store to help customers,
Kroger would be able to monitor temperatures of their cold storage units and warn store
personnel of potential problems before they could occur. The company also monitored data
collected from aisles to determine sales of its own store brands and national brands to assess
potential switching behaviors. These analytics allowed Kroger to understand and study their
customers and gain customer loyalty with their customers throughout the process that would
allow for advance digital technology, personalization, and predictive analytics that were already
reshaping the customers’ experience.
6.
f) Explain in detail the value of partnerships in the digital transformation of Kroger.
Provide two examples of partnerships.
Kroger partnered to Microsoft to implement its Azure AI technology to enhance productivity in
the store and Ocado which is a British online grocery retailer. These partnerships allow Kroger to
leverage Ocado’s technology to increase its e-commerce and delivery capabilities that would
enable Kroger to offer same day delivery services and optimize its overall supply chain
operations and Microsoft allowed for Azure cloud services, AI, and data analytics capabilities to
enhance Kroger’s customer experience, streamline overall operations, and drive innovation for
the future aspects. Both the partnerships would help Kroger access stop tier technology and
expertise accelerating its digital transformation efforts.
7.
g) Elaborate on the digital initiatives undertaken by Kroger in its backroom.
The digital initiatives undertaken by Kroger in its backroom in areas such as supply chain
optimization and distributions operations that would include data analytics that forecast
demand of supply before it is out of stock based on the data collects with the shopper and it
would reduce lead times and improve inventory management to ensure products are available
for customers when needed. The overall data analytics would monitor and optimize the
backroom operations that would analyze data on inventory turnover, improve order fulfillment
times and overall logistics efficiency to make data improvements. Quality control and
monitoring of goods in the backroom to ensure that only high-quality products reach the
customer so in conclusion all these initiatives in the backroom are essential to support Kroger’s
online and offline operations when enhancing efficiency and ultimately improving the customer
experience.
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