While it's certainly not the only one, a major key to grocery retail transformation lies in knowing when to go it alone and when to get a partner.
That's a key takeaway shared by Rodney McMullen, CEO of grocery giant The Kroger Co., during an opening keynote on Jan. 13 at Retail's Big Show 2019, hosted by the National Retail Federation in New York City.
During an interview with Sara Eisen, anchor of CNBC's "Squawk on the Street" and "Closing Bell," McMullen pointed out that Kroger's Restock program has relied strongly on the philosophy that the grocer should do what it does best on its own, but also rely on others' talents in areas where it might not be so skilled. For example, he pointed to Kroger's work with:
- U.K. online grocer Ocado, which is working to enhance Kroger's e-commerce program, including online ordering, automated fulfillment and home delivery to expand the grocer's coverage nationwide. McMullen noted that while Kroger could have done this on its own, it would have taken at least five years--this partnership speeds that up and helps each party involved further achieve its goals.
READ: Sobeys partners with British online supermarket Ocado
- Chinese technology company and retailer Alibaba Group, which is selling Kroger's Simple Truth products through its Tmall Global platform, a business-to-consumer website for local Chinese and international businesses to sell branded products to consumers.
Moreover, McMullen shared additional insights on Kroger, grocery transformation and the future of retail:
- You don't have to know exactly what your customer wants from the get-go. But you do have to build something that lets the customer respond and show you where to go.
- Retail is not going away. Sure, it won't look like it does today, but it won't disappear. Maybe it will involve ordering from in-store screens. Maybe it will involve technology telling shoppers what they want for dinner upon scanning a loyalty card. McMullen assured attendees that whatever the changes, they ultimately will be "super fun."
- The future of grocery retail will not be digital, and it won't be physical either. It will be problem-solving and purpose-driven.
- Retail is incredibly important. What other field is known to give so many people their first job--and such an opportunity to take on so many responsibilities in that role?
- The store of the future might be the same size as a traditional grocery store today--but half might be experience-based, while the other half might be efficiency-based.
- While Amazon's entrance into grocery certainly has lit a fire under a lot of grocers, it isn't what ultimately led Kroger to begin its transformation. McMullen stressed that Kroger's transformation journey began not because of what any other retailer did, but because of what it thought other retailers were going to do, though it did suspect Amazon was going to enter brick-and-mortar grocery retail.
A version of this article appeared at ProgressiveGrocer.com