Kroger - April 2022

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Redefining This is the the grocery headline of customer the feature experience DIGITAL REPORT 2022

IN ASSOCIATION WITH:

IN ASSOCIATION WITH:

DIGITAL REPORT 2021

REDEFINING THE GROCERY CUSTOMER EXPERIENCE

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Kings of innovation Wesley Rhodes and Dan Whitacre home in on the technology and values that set the Kroger customer experience apart

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t’s easy to see why Kroger is leading the grocery retail space – and it all centres around a laser focus on the customer. Innovation has been core to the grocer’s identity from its founding, when Barney Kroger created the nation’s first supermarket.

Kroger Labs, the company’s research and development (R&D) arm, plays an active role in its efforts to change the way America eats.

Wesley Rhodes, Vice President of Technology Transformation and R&D for Kroger, spent his career working with companies that are making their next big technological leaps. Today, he brings that expertise to Kroger and leads the team who are uncovering what’s next in the grocery retail space.

Rhodes and his team find ways Kroger can make changes – big and small – to introduce that next level of customer service, and these innovations are coming at an increasingly faster pace.

“In the past, innovations were big bets with potentially big rewards created during long development periods,” says Rhodes.

“Today, we incrementally deliver meaningful innovations much more rapidly by limiting their scope.”

To ensure the lab team is focused in the right areas, customer feedback is constantly incorporated into practice and, if necessary, courses can be changed or corrected in response.

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Kroger Technology

“AT KROGER TECHNOLOGY AND DIGITAL, WE WANT PEOPLE WHO ARE PASSIONATE AND OBSESSED WITH MAKING OUR DESIGNS THE BEST”

As customers continue buybuyBaby, alongside to evolve, Kroger finds the fresh meal solutions new ways to create already available on an industry-leading Kroger’s website. experience, both in Families can send new person and on its digital parents a crib, nappies properties. Recently, and Home Chef readythe grocer announced to-heat meals – all in one a collaboration with transaction.

Instacart to deliver In its stores, Kroger customer favourites in leverages technology 30 minutes or fewer, to make the shopping supplying ‘need-itexperience simple. now’ staples from a From digital coupons trusted retailer without customers can add WESLEY RHODES VICE PRESIDENT OF TECHNOLOGY requiring a compromise to their loyalty cards TRANSFORMATION AND R&D, KROGER on freshness, price or straight from the shelf to convenience. in-app wayfinding that The company is also exploring ways helps shoppers efficiently navigate any store, to digitally expand its aisle by offering grocery shopping is only getting easier. customers the opportunity to purchase Kroger is even exploring opportunities to sought-after home and baby goods from help customers better understand how their businesses such as Bed Bath & Beyond and food choices impact their overall health, via 6

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the OptUp app. Soon, customers will be able to choose to be alerted when a certain food will negatively interact with a medication or how they can substitute better-for-you options for items in their digital carts.

None of these bets – big or small – would be possible without the team at Kroger Labs exploring cutting-edge technologies that create a seamless customer and associate experience. Rhodes’s approach to his work, collaboration ecosystem and commitment to diverse thinking creates a unique space that is ripe for uncovering what’s next.

TITLE: V ICE PRESIDENT OF TECHNOLOGY TRANSFORMATION AND R&D INDUSTRY: RETAIL LOCATION: USA Wesley Rhodes is Kroger’s VP of Technology Transformation and Research & Development.

Wesley is responsible for providing new innovations to transform the customer’s journey and the associate’s interactions into one cohesive experience throughout all Kroger’s digital and physical properties.

Previously, Wesley spent 18 years with IBM where he served in numerous capacities including as the Chief Technologist in Artificial Intelligence and Cloud computing, CTO for Corporate Strategy, and Deputy CTO for US and NATO National Security and Defense. Wesley holds numerous academic appointments, is a former Prince of Wales Fellow at MIT and has graduate degrees from four prominent Universities.

EXECUTIVE BIO

Building a high-impact ecosystem Alongside his strong team of associates, Rhodes leverages third-party collaborators to accelerate the work of Kroger Labs to the next level.

“That collaboration ecosystem is some of the secret sauce impacting how Kroger Labs works,” says Rhodes. “We look for partners that can seamlessly integrate in what we do, trusting them to bring the right kind of skills, to jump in and contribute to what we're trying to do. In this respect, Fusion Alliance here in Cincinnati has been an integral partner, complementing our staff, processes and methods.”

Dan Whitacre’s role as Senior Director of Kroger Labs and Technology means he is always looking for new opportunities to connect the labs with unique thinkers around the world.

“Building a network of collaborators brings in people we can trust who have different experiences and expertise to our discussion,” explains Whitacre.

“For example, Deloitte has worked across multiple parts of Kroger, and they bring those insights with them into the labs, helping us build a framework for innovation. We've worked with them to better connect with

WESLEY RHODES

“ Deloitte has been a collaboration partner focused on delivering value and outcomes, not just a transactional service provider. ” TODD FOLEY VP & Corporate Controller at Kroger

Discover more

Danny Edsall, Principal, Deloitte Consulting LLP As a retail leader, Danny Edsall explains how Deloitte helps Kroger turn market challenges into opportunities to serve their customers more effectively.

There aren’t many organizations better placed to guide the key retail players through this period of digital enlightenment than Deloitte, the largest professional services firm in the United States. Deloitte Global operates in 150 countries and employs over 330,000 people worldwide.

Collaborating with Kroger Danny Edsall is a Principal and Client Services Partner at Deloitte Consulting, LLP, helping the retail industry to serve their customers better. Thinking of himself as also like a chief customer officer for Kroger, their relationship has flourished for over a decade. Edsall says it’s been highly valuable for both parties.

“Deloitte helps Kroger in many ways. We help Kroger with advisory services on areas such as cybersecurity, accounting & reporting, tax, merchandising, supply chain, digital customer experience and technological innovation.

With such a large company, we’re talking about large scale people and process transformations and software implementations. We’re working across the Kroger enterprise in their stores and in their distribution centers to help Kroger solve some of its toughest challenges and turn

them into opportunities. It’s been a highly rewarding working relationship,” said Edsall.

Leading edge developments in the technology and retail world Such innovations at Kroger have included improved customer service through advanced personalization, where the retailer has been zeroing in on what shoppers want and how best to meet their requirements.

“By assisting with their in-store customer experience, we’re helping them be more effective and efficient in the way that they deploy their own staff (associates) and the way they motivate, train, measure and reward them,” he said.

Edsall says that the combination of “business savvy and deep tech expertise, when brought together with the business problem or an opportunity that Kroger is faced with, is when the magic happens”.

“We’re also helping Kroger think through how to get business advantages from artificial intelligence, machine learning and advanced analytics”, said Edsall.

Please see our website for a detailed description of our legal structure.

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“A CRITICAL SKILL WE'VE WORKED ON WITH DELOITTE IS HOW TO FAIL FAST. THEY HAVE THEIR OWN INNOVATION LABS AND UNDERSTAND HOW TO TAKE BIG CHALLENGES AND BREAK THEM INTO SMALLER ONES” DAN WHITACRE

SENIOR DIRECTOR OF KROGER LABS AND TECHNOLOGY, KROGER

outcome-driven initiatives and understand how innovation in Kroger Labs works within this kind of scenario.”

The practice of learning quickly and implementing learning repeatedly to iterate new solutions is key to any successful research and development organisation. And Kroger Labs is one of the best.

“A critical skill we've worked on with Deloitte is how to fail fast. They have their own innovation labs and understand how to take big challenges and break them into smaller ones. Teaching us to fail more quickly on the smaller problems enables us to avoid wasting time and instead focuses our energy on finding effective solutions to solve the bigger problems,” Whitacre said.

University partnerships are some of Whitacre’s favourite interactions in the Kroger Labs ecosystem. The lab team works with multiple universities and colleges to kroger.com

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THE CINCINNATI INNOVATION DISTRICT HAS REALLY GIVEN US THE ACCESS TO TALENT WE WOULD NOT HAVE BEEN ABLE TO ENGAGE WITH IN THE PAST. — Yael Cosset, CIO and Chief Digital Officer - Kroger

WE HAVE A TALENT FOR TALENT. Wanting their thinking to be as fresh as their produce, Kroger turned to the Cincinnati Innovation District to find the talent to compete in today’s digital economy.

CID is the place where industry connects with talent to solve problems that matter.

Come see for yourself.

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DAN WHITACRE TITLE: S ENIOR DIRECTOR OF KROGER LABS AND TECHNOLOGY INDUSTRY: RETAIL LOCATION: USA

$137.9bn in 2021 total sales

2,726

supermarkets & multi-department stores

640

million meals donated through more than 100 Feeding America food bank partners

EXECUTIVE BIO

Dan is accountable for continually developing the commercial, academic, government and NGO innovation ecosystem within the Kroger Labs. He works with the team to transform Kroger’s approach to emerging technologies, data and analytics architecture, technology strategies and practices as well as its disruption roadmap.

Dan has served multiple roles with Kroger.

Dan also served as the CTO and Vice President of Business Development for a Data and Analytics services organisation that was acquired by Data Intensity.

Additionally, he spent six years consulting at IBM on Information & Analytics Strategy and Architecture in multiple industries including retail, healthcare, manufacturing, and U.S. intelligence.

answer unique questions, working directly with faculty and students, and even has physical space on both the University of Cincinnati and Northern Kentucky University campuses – each located minutes from the company’s headquarters.

These close connections with students at all levels bring fresh perspectives to the team.

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“Creating meaningful outcomes is much simpler when both professors and students are part of the discussion,” he says. “We regularly learn from the different approaches of both groups and seek out particular projects within institutes that we can then capitalise on their expertise and insights.

Young minds are a joy to challenge!”

“The 1819 Innovation Hub at the University of Cincinnati is a unique building.

It's a unique environment,” Whitacre continues. “It's a product of several innovation initiatives that are going on across the State of Ohio.”

And Kroger is not alone in the space at that university.

“Twenty other companies created labs there too and, just by walking around, I can make a connection with an insurance company, a logistics company, a finance

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“IN THE PAST, INNOVATIONS WERE BIG BETS WITH POTENTIALLY BIG REWARDS CREATED DURING LONG DEVELOPMENT PERIODS. TODAY, WE INCREMENTALLY DELIVER MEANINGFUL INNOVATIONS MUCH MORE RAPIDLY BY LIMITING THEIR SCOPE” company, a banking company. We get great insights from that,” he says.

In addition to Kroger’s close working relationship with universities and colleges in its backyard, the company seeks out opportunities to collaborate with academia across the American Midwest and elsewhere that can offer important insights.

Retail’s unparalleled science and technology pathfinder According to Rhodes, the Kroger team’s commitment to diversity and a forwardthinking digital approach opens the door to new ideas.

“Diversity of thought is key to creating real change. It allows you to see the problem from different perspectives then seek out and test the best solutions,” he says. “R&D thrives in an environment with different

WESLEY RHODES VICE PRESIDENT OF TECHNOLOGY TRANSFORMATION AND R&D, KROGER

backgrounds, experiences, education, and specialties. We tell our team members that they can come to Kroger and get something they won't find anywhere else – freedom to solve the problem.”

Each group of interns at Kroger Labs is tasked with the same challenge: storyboard what you think the grocery shopping experience looks like in ten years. In each cohort, interns will come to Kroger with a wide range in age, previous work experience, professional disciplines and much more.

Each team member brings a different world view to their ideal experience and their individual aspirations for the future – from making stores more environmentally friendly to exploring additional ways to make shopping more convenient. kroger.com

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“ MANY OF THE ORGANISATIONS WE CONNECT WITH ARE FACING THE SAME EMERGING TECHNOLOGY CHALLENGES WE ARE. THROUGH THESE EXPERIENCES, WE LEARN FROM EACH OTHER AND CREATE A BETTER OUTCOME TOGETHER” WESLEY RHODES VICE PRESIDENT OF TECHNOLOGY TRANSFORMATION AND R&D, KROGER

After the initial storyboarding session, the labs teams will consider common technological underpinnings as well as where the suggestions diverge. Then, they begin to integrate the solutions into a flexible future-focused technology roadmap the lab team can begin to explore – all with the goal of creating the best possible digital and in-store experience.

“Diversity expands your imagination,” says Rhodes. “It expands your possibilities,

the breadth of customers you can serve and improves your profitability when associates are given creative licence and mutual respect.”

The lab team also looks outside their walls to understand different customer needs.

“We host forums in our communities, cities and states,” says Whitacre. “Many of the organisations we connect with are facing the same emerging technology challenges we are. Through these experiences, we learn from each other and create a better outcome together.”

Drafting a winning team Top tech talent is always in high demand – and today’s environment allows the best people to work for any company, from anywhere. Rhodes and Whitacre are confident Kroger offers these digital kroger.com

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“R&D THRIVES IN AN ENVIRONMENT WITH DIFFERENT BACKGROUNDS, EXPERIENCES, EDUCATION, AND SPECIALTIES. WE TELL OUR TEAM MEMBERS THAT THEY CAN COME TO KROGER AND GET SOMETHING THEY WON'T FIND ANYWHERE ELSE – FREEDOM TO SOLVE THE PROBLEM” WESLEY RHODES VICE PRESIDENT OF TECHNOLOGY TRANSFORMATION AND R&D, KROGER

gurus interesting challenges, along with meaningful outcomes.

“At Kroger Technology and Digital, we want people who are passionate and obsessed with making our designs the best,” Rhodes says. “We’re a people business, so we know that to draw out the ingenuity needed to innovate, our workforce is going to need a certain amount of personal and creative freedom.”

Kroger is uniquely positioned for associates to see the outcomes of their work in real time.

“One of my favourite stories is of an associate whose family member struggled with a specific aspect of grocery shopping,” says Rhodes. “They brought the challenge to

our labs team, and we were able to solve it – not just for that one family member, but for anyone across the U.S. who experienced the same struggle. That associate was so proud to bring their family to the store and show off their solution. It’s a small, but meaningful example of the opportunities our associates have every day.”

Rhodes and Whitacre have the unique position to be driving some of grocery retail’s next big innovations. Their strong collaboration ecosystem of universities and third-party companies bring the best minds to the table, and a commitment to diverse thinking uplifts every associate voice. It’s easy to see why the future is a bright one for Kroger Labs.

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