Will a new AI lab make Kroger the freshest grocer of them all?

Discussion
Source: Kroger and NVIDIA
Mar 25, 2022

Kroger is looking to use artificial intelligence to optimize its supply chain and deliver the freshest food to its customers.

The supermarket giant earlier this week announced that it is engaging in a strategic collaboration with NVIDIA to build an AI-powered laboratory and demonstration center to achieve its “freshness” goals. The companies plan to use virtual models to accurately match store layouts and other operations to reach their objectives.

Wesley Rhodes, vice president of technology transformation & research and development at Kroger, said the collaboration will support his company’s “Fresh for Everyone commitment” and enable the grocer to use AI and data analytics to “provide our customers with anything, anytime, anywhere.”

The lab will be located within Kroger’s headquarters building in Cincinnati. It will use multiple technological solutions created by NVIDIA to help gain insights that can improve the performance of the nearly 2,800 stores in the company’s portfolio.

Azita Martin, vice president and general manager of retail at NVIDIA, said the use of AI will enable Kroger to deliver “more personalized experiences” for its customers, whether they are shopping in stores or online.

Kroger has identified three key performance areas in quality control, supply chain and operations to address.

The first is the use of computer vision and analytics to “identify early indicators of deteriorating freshness.”

The second makes use of dynamic routing in last-mile delivery to ensure the freshest products make their way to consumers’ plates.

The third seeks to optimize store efficiencies and processes with digital twin store simulations.

Kroger is the largest supermarket operator in the U.S. with stores operating under its namesake banner and many others.

The grocery giant has also begun entering markets where it doesn’t have a physical store presence as part of its distribution network that makes use of Ocado automated warehouses, spoke hubs and micro-fulfillment centers to speed online orders to customers.

Kroger Delivery first launched in central Florida and is currently looking to expand across that state. The company is also moving into parts of Oklahoma and Pennsylvania with deliveries, even though it doesn’t currently operate stores or automated warehouses in either state. Oklahoma is being served by Kroger from the Dallas area and western Pennsylvania is tied to a facility planned in the Cleveland area.

DISCUSSION QUESTIONS: Will the use of artificial intelligence technology help Kroger achieve its freshness goals? Which aspect of the lab — using computer vision to track product deterioration, dynamic routing or digital twin store simulations — is likely to produce the biggest benefit?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Kroger is definitely on the right track – AI will provide tremendous benefit to store operations."
"Kroger is smart to first identify business problems and then apply analytics and automation to solve them, as opposed to the reverse process."
"All three components of the lab will uncover new ways to work, operate and make money."

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6 Comments on "Will a new AI lab make Kroger the freshest grocer of them all?"


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Dion Kenney
BrainTrust
6 months 10 days ago

Kroger is definitely on the right track – AI will provide tremendous benefit to store operations. We are at a very early stage in the application of the technology, but the immediate benefit is likely to come from twin store development, followed by dynamic routing.

It helps to think of AI as “Augmented Intelligence,” i.e. better decision making, rather than “Artificial Intelligence” in which computers are replacing humans. I like the idea of applying computer vision for store performance enhancement. I’m just not sure how the technology will cost-effectively improve the process of watching the bananas turn brown.

Gene Detroyer
BrainTrust

AI can help in all of those areas. The key is how and where to apply the resources. Too many retailers and companies say, “ah, AI, let’s use it,” without having an understanding of how it can be used and really what their true goals should be.

To me the operational value of AI is having the right product at the right place at the right time. AI can do that. For home delivery, it is the very same thing.

I think all three of Kroger’s AI efforts are well targeted. Let’s make sure they keep their eyes on the ball and don’t get carried away with the AI itself.

David Spear
BrainTrust

All three components of the lab will uncover new ways to work, operate and make money. Computer vision has proven itself in many use cases and the focus of product deterioration is a perfect scenario. At a minimum, I’ll bet Kroger will improve its “freshness” of product by 25 percent. Consumers will love this, but as Kroger dumps product from the shelves, it will have to adjust its demand forecasting engine to compensate for what the cameras/video are detecting. Digital twin simulation has huge upside but it will require a lot of trial and error. I hope Kroger has given itself a longer path to success for this vs computer vision, which will start offering insights almost immediately.

David Slavick
BrainTrust

This is a trip — not to the Kroger, but just thinking about the shopping experience. Having lived in their home base of Cincinnati for six years there is one common theme: shopping a Kroger is the least satisfying grocery experience one can have. A specialty fruit and veggie store was much better. A butcher shop was exponentially better in terms of best grade meat. A fish shop (Jungle Jim’s) was superior. Pick up the staples at your local Kroger, OK. Anything that was of value for your family, nope. Big is not better when it comes to Kroger.

Patricia Vekich Waldron
Staff

Kroger is smart to first identify business problems and then apply analytics and automation to solve them, as opposed to the reverse process. Supply chain, sustainability and service are the right areas on which to focus.

Ananda Chakravarty
BrainTrust

For Kroger this is experimentation. Depending on the freshness goals, computer vision combined with AI can identify the browning of vegetables, produce or even expired frozen foods. But the cost for this basic function will far exceed hiring an added person in the produce section. Concepts like digital twin store operations can help point out flaws in managing a store, but these may not be investment worthy.

The key value here that might drive real value would be dynamic delivery routing to noticeably reduce costs. Especially as Kroger continues to push personalization and leverages automation in its Ocado hives, the integration with delivery can produce substantial benefit.

wpDiscuz
Braintrust
"Kroger is definitely on the right track – AI will provide tremendous benefit to store operations."
"Kroger is smart to first identify business problems and then apply analytics and automation to solve them, as opposed to the reverse process."
"All three components of the lab will uncover new ways to work, operate and make money."

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