Kmart Group changes its technological ambitions

Kmart Group is seeking automated decision making and eliminating, rather than digitizing, entire processes in the store as it tries to reduce unnecessary workload and refocus workers on “value” tasks.

Kmart and Target CIO Brad Blyth said in a Microsoft-hosted webinar last month that he had returned from the 2023 NRF annual retail show in the US in January with a fresh perspective on how to apply technology in retail. retail operations it oversees. .

NRF, run by the National Retail Federation, has in the past attracted the attendance of technology leaders at many of Australia’s leading retailers; however, it is often difficult to keep track of what is happening on the show from the outside.

With the NRF much bigger this year, Microsoft reviewed the highlights of the event last month, with Blyth outlining what he had observed while attending and how it might affect Kmart Group’s approach to technology use this year.

Blyth said a key takeaway from the program is an “acceleration” of thinking “around our ability to digitize our in-store experience.”

“There is definitely a lot more going on there than was probably our ambition, so takeaway is definitely [to] double down and accelerate what we’re doing there, because the technology has come a long way,” he said.

“There’s a ‘leapfrog’ opportunity for us that we didn’t realize was there before.”

Blyth highlighted two key observations from the event: the changing role of stores, and also the emergence of more “results-based platforms” rather than generic services that had to be adapted and configured for a retail environment.

Elimination of processes

“There has really been a strong return from consumers going into the stores,” Blyth said.

“The role of a store has [also] really changed – is [become] more about this place where consumers can interact with your product and understand your brand a little more… then [it’s] a completely different shopping experience.

“That really brings up this idea of ​​how do we digitize and tie all these things together and get the workforce to really engage with what’s going on with customers.”

Blyth noted that even before NRF, Kmart Group had been rethinking part of its approach to digitizing in-store processes.

“What we’ve tried to look at is not just digitizing end-to-end processes, but eliminating processes: What don’t we need to do now? What can we really take away from people in terms of workload and especially meetings? he said.

“You will find that when you have complex processes you have a lot of meetings, so [there are] many points of collaboration to make a decision.”

He saw opportunities to automate decision making: “If we’re using the data right and we’re using smart new ways [of work] and can show that automated decision making is just as accurate as manual decision making that we have right now, then we’re really trying to address those issues.”

“I think when we look back, we probably thought that just digitizing processes was a good thing,” he said.

“Now we’re thinking about how many processes I can kill and then have people focus on the value work.”

Technological specificity

Talking about the results-based platforms he saw at NRF 2023, Blyth said it was no longer about getting a machine learning platform, but a specific platform that could improve store operations or tie e-commerce to compliance.

“These problem-based solutions have emerged more predominantly, which I think highlights the fact that we’re finding where the value is in all of these types of technologies and linking it together,” Blyth said.

“That allows us to get up to speed very quickly in terms of leveraging something that we can implement quickly, but also getting the gains from community use of these common tools.”

Supply Chain Optimization

Blyth saw continued opportunities to use data more intelligently in Kmart Group’s supply chain operations.

“I think the customer expectation these days is that if I order something, I should see it right away or in the next 24 to 48 hours. Anything longer than that is not up to expectations, so getting the supply chain right is a big part of our approach,” he said.

“What became very clear to me is the way you use data and intelligence to understand how stock moves from sourcing/manufacturing to customers, tying that together and then having key automated decision points, so it takes a lot of Part of making complex decisions and really trying to optimize decision points using intelligent data will be how you make key differences in your supply chain.

“That use of end-to-end smart data points, which you can collect through…signals now that stocks are moving, that’s the future of running a really smart supply chain, and I think a lot of companies are starting to realize account of that. But it’s quite a journey to get there.”

RFID deployment

Kmart has been working for several years with radio frequency identification (RFID) tags and data systems to gain better visibility into products as they move through the supply chain and fulfillment process, as well as within store environments.

The works program has improved the integrity of the inventory and has digitized the processes of product replacement. It is also expected to lead to other efficiencies as well as higher sales.

Blyth said tracking data signals in this way created opportunities to review stock order and move decisions multiple times.

“[It] it created a dynamic ability to change where we thought stock was going and get some of that agility in our supply chain,” Blyth said.

“So instead of placing an order for 10 shirts [to go] From the manufacturer to a store, you should actually review that decision as you go – is there a smarter place to ship this stock?

Blyth also said that labeling products and understanding their size and dimensions meant further optimizations in how bins are filled in warehouses and how many items can fit on a particular shelf space.

“That makes you smarter in terms of how many you order,” he said.

Blyth added that the retailer had added more intelligence to the image to allow it to “predict [what] a customer wants”, and order accordingly.

“That will take us to the next level of intelligence in our supply chain,” he said.

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James D. Brown
James D. Brown
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