Can Kroger turn Cincinnati into an alt-Silicon Valley?

Discussion
Photo: University of Cincinnati - 1819 Innovation Hub
Sep 05, 2018
Tom Ryan

The Kroger Co., based in Cincinnati, announced plans to open an innovation lab as part of the University of Cincinnati’s (UC) new 1819 Innovation Hub.

The nation’s largest supermarket operator will staff the lab with resources, including R&D engineers and software developers alongside UC faculty, to support its innovation efforts. Said Chris Hjelm, Kroger’s EVP and CIO, in a statement, “This innovative collaboration is driven by Restock Kroger and provides the Kroger Technology team another creative space to partner and develop solutions to redefine the grocery customer experience.”

Launched last year at Kroger’s annual analyst day, Restock Kroger is a wide-ranging initiative designed to improve customer service and personalization, revamp product assortments and leverage data-driven shelf optimization.

Kroger’s partnership with UC will also feature a student co-op and internship program. Mr. Hjelm said, “Our vision is to create a talent pipeline that supports our business and positions the region as a place for digital and technology students and professionals.”

Measuring 12,000-square-feet and including a micro-factory, collaborative work spaces and classrooms, the 1819 Innovation Hub opened last week and is designed to help faculty and students pursue innovation projects, enable nearby companies to tap the school’s research capabilities and better position the city of Cincinnati as a tech hub. With the high cost of living in the San Francisco Bay Area, other cities are being sought to develop and support tech communities.

Kroger will have a 2,500-square-foot laboratory on the third floor of the four-story building.

In late June, Kroger announced it would be opening its new digital headquarters in downtown Cincinnati with plans to increase its digital team of 500 employees to 1,000 by 2020. Kroger is also a partner with Cincinnati’s “Cincy is IT” initiative to attract top tech talent to the region. Recent moves to partner with online grocer Ocado and merge with Home Chef further support its digital ambitions.

DISCUSSION QUESTIONS: How important is establishing a vibrant tech community in Cincinnati to Kroger’s future? Does partnering with universities make sense for other retailers for similar reasons?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"For Kroger to nurture an innovation culture that can attract new tech talent is strategic and smart. "
"Cincinnati already has a pretty vibrant tech community (see Vine Street Ventures, The Brandery, Cintrifuse and others)."
"Cincinnati is noticeably absent from Amazon’s list of finalists for HQ2 (so is Milwaukee), which may be a sign of the uphill battle that Kroger is undertaking."

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15 Comments on "Can Kroger turn Cincinnati into an alt-Silicon Valley?"


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Bob Amster
BrainTrust

While not answering the question directly, another comes to mind. Why do retailers appear to not invest nearly so much in training their employees to be great ambassadors for their respective companies as they appear to be investing in technology? Is it a conscious decision that the people are not worth so much as the technology or a missed opportunity to recognize that the people can be more important than the technology?

Laura Davis-Taylor
BrainTrust

Amen on this comment Bob. You hit the nail on the head.

Jon Polin
BrainTrust

Today if I’m a smart, innovative software engineer I’m not likely to say to myself, “I want to go work for a giant supermarket.” So kudos to Kroger taking steps to build its reputation as an innovator. Smart move. But to suggest that Kroger and University of Cincinnati are approaching alt-Silicon Valley status? Not quite.

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
1 year 4 months ago

This is important not only for Kroger but for other Fortune 500 players in the region (nine by my last count).

For Kroger to nurture an innovation culture that can attract new tech talent is strategic and smart. This is a must-do effort if they want to compete with the other large companies in the area as well as shine a bright light on the exciting and highly visible consumer-facing innovations that the retail industry affords.

Dick Seesel
BrainTrust

Kroger in Cincinnati sounds similar to Kohl’s here in Milwaukee — a huge company (especially in Kroger’s case) with increasing demand for data science and technology, but headquartered in a market with underdeveloped tech “human resources.”There may be growth opportunity (and props to Kroger for trying to make it happen), but the reality is that it’s easier to hire tech talent away from other companies in the real Silicon Valley.

(Kohl’s for one just cut 60 tech jobs at its headquarters as it moves to more cloud computing and remote data centers. And a LinkedIn search finds many of its senior tech executives based in California, not Milwaukee.)

Cincinnati is noticeably absent from Amazon’s list of finalists for HQ2 (so is Milwaukee), which may be a sign of the uphill battle that Kroger is undertaking.

Dr. Stephen Needel
BrainTrust

Kroger’s future may well be helped by leveraging technology. Leveraging technology in Cincinnati is not necessary. Remember Mark Twain’s famous quote, “When the world is coming to an end, I’d like to be in Cincinnati, because it takes Cincinnati 10 years to catch up with the world.”

DAVID ROTH
Guest
1 year 4 months ago
Michael La Kier
BrainTrust

Cincinnati already has a pretty vibrant tech community (see Vine Street Ventures, The Brandery, Cintrifuse and others). Kroger’s move is likely more about ease and convenience of having innovation partners close to home. Innovation labs do help the community and keep talent in place which is likely a motive on Kroger’s part too.

Adrian Weidmann
BrainTrust

Smart corporations have been aligning themselves with universities and researchers for years. As a mechanical engineering student years ago, I was part of research sponsored by Kimberly-Clark. It’s a long story, but we found that disposable diaper material was excellent for absorbing oil. We presented our results and suggested using the material for oil spill mitigation and reclamation. The project was immediately killed and the results never were published. In short, access to innovation and new thinking exists — the real question is whether Kroger, or any corporation, has the cultural mettle to activate!

DAVID ROTH
Guest
1 year 4 months ago

It’s about time that retailers realize that there is life outside San Francisco and Seattle. Instead of picking up the leftovers from tech giants it’s a smart move to grow talent in areas where the cost of labor is much lower and the lower cost of living can attract employees who might actually want to own a home someday and have a reasonable commute.

David Weinand
BrainTrust

These types of initiatives are required to attract meaningful talent to areas like Cincinnati (or Bentonville). Ultimately, if they can combine meaningful opportunities to innovate and do interesting work with a cost of living that is probably half that of Silicon Valley, that is an enticing value proposition that they should market the heck out of!

Cynthia Holcomb
BrainTrust

A good move. Especially for tech. I am hoping Kroger will encourage young women to participate. When it comes to shopping, men shop differently for groceries than women! In fact men grab and go while women shop. Kroger may have a chance to make a tech name for itself in the grocery business. This is a great opportunity to develop tech and AI built upon a plurality of logic and cognitive processing.

Doug Garnett
BrainTrust

This is not a horrific strategy. Yet it is concerning that Kroger appears to equate “innovation” with “technology.” That’s a false direction. Sometimes technology offers opportunity to execute tremendously innovative projects. But it’s merely a tool — not a goal.

Will Kroger have the wisdom to realize this? That’s not clear — the market will tell them though. So far, the “pick up” spots at our local Kroger outlet remain primarily empty of people picking up online orders while the rest of the lot remains crammed with cars.

Craig Sundstrom
Guest

Can Kroger, either acting alone or in concert with others, turn Cincy into SV East (or Central)? Of course not. But then I don’t think they need to. They just need to attract sufficient people for their needs. Ninety-seven percent of the country — and even a lot of “tech firms” — are outside the Valley. I don’t think the task is all that difficult.

Patricia Vekich Waldron
Staff

It’s always a good move to be in the same place as universities where top (young) talent is plentiful. Kroger is smart to have a higher-learning partner in its hometown.

wpDiscuz
Braintrust
"For Kroger to nurture an innovation culture that can attract new tech talent is strategic and smart. "
"Cincinnati already has a pretty vibrant tech community (see Vine Street Ventures, The Brandery, Cintrifuse and others)."
"Cincinnati is noticeably absent from Amazon’s list of finalists for HQ2 (so is Milwaukee), which may be a sign of the uphill battle that Kroger is undertaking."

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