Kmart Group switches up its tech ambitions
Kmart Group is looking to automated decisioning and the removal – rather than digitisation – of entire processes in-store, as it tries to reduce unnecessary workload and refocus workers on “value” tasks.
The CIO of Kmart and Target, Brad Blyth, told a Microsoft-run webinar last month that he’d returned from the annual NRF 2023 retail show in the US in January with a new perspective on how to apply technology in the retail operations he oversees.
NRF – run by the National Retail Federation – has in the past drawn attendance from technology leaders at many of Australia’s top retailers; however, it is often difficult to track what goes on at the show from the outside.
With NRF much larger this year, Microsoft ran through the event highlights last month, with Blyth outlining what he’d observed by attending, and how it might impact Kmart Group’s approach to technology use this year.
Blyth said a key takeaway from the show is an “acceleration” of thinking “around our ability to digitise our store experience.”
“There’s definitely lots more happening there than probably what our ambition was, so the takeaway there is definitely [to] double-down and accelerate what we’re doing there, because the technology’s come a long way,” he said.
“There’s a ‘leapfrog’ opportunity there for us that we didnt perceive to be there before.”
Blyth highlighted two key observations from the event: the changing role of stores, and also the emergence of more “outcome-based platforms”, rather than generic services that had to be tailored and configured to a retail setting.
“There’s really been a strong return to consumers going into stores,” Blyth said.
“The role of a store has [also] really changed – it’s [become] more about this place where consumers can interact with your product and understand your brand a bit more … so [it’s] a different shopping experience altogether.
“That really raises this idea of how we digitise and link all these things together and make the workforce really engaged with what’s happening with the customers.”
Blyth indicated that even before NRF, Kmart Group had been rethinking some of its approach to in-store process digitisation.
“What we’ve tried to look at is not just digitising end-to-end processes but removing processes: What do we not need to do now? What can we actually take away from people in terms of workload and especially meetings?” he said.
“You’ll find when you have complex processes that you have many meetings, so [there are] many points of collaboration in order to make a decision.”
He saw opportunities to automate decision-making: “If we’re using data correctly and we’re using new intelligent ways [of work] and can prove that the automated decision is just as accurate as the manual decision-making that we have at the moment, then we’re really trying to tackle those problems.”
“I think when we look back, we probably thought that just digitising processes was a good thing,” he said.
“Now we’re actually thinking how many processes can I remove, and then get people focused on value work.”
On the outcomes-based platforms he observed at NRF 2023, Blyth said it was no longer about sourcing a machine learning platform but instead a specific platform that could improve store operations or that linked e-commerce through to fulfilment.
“These problem-based solutions were coming out more predominately, which I think that highlights the fact that we’re finding where the value is in all these kinds of technologies and we’re linking it together,” Blyth said.
“That lets us get up to speed really quickly in terms of leveraging something that we can roll out quickly, but also get the advancements from the communal use of these common tools.”
Supply chain optimisation
Blyth saw ongoing opportunities to use data more intelligently in Kmart Group’s supply chain operations.
“I think the customer expectation these days is if I order something I should see it immediately, or in the next 24-48 hours. Anything longer than that becomes not up to expectation, so getting supply chain right is a huge part of our focus,” he said.
“What came out really clearly to me is the way that you use the data and intelligence to understand how stock is moving through from sourcing/manufacturing through to customers – knitting that together and then having key automated decision points, so taking a lot of the complex decisioning out of it and really trying to optimise decision points using intelligent data is going to be the way you make key differences to your supply chain.
“That use of end-to-end intelligent data points, which you can collect through… signals now as stock moves, that’s the future of running a really smart, intelligent supply chain, and a lot of companies I think are starting to realise that, but it’s quite a journey to get there.”
Kmart has for several years been working with radiofrequency identification (RFID) tags and data systems to get better visibility of products as they move through the supply chain and fulfilment process, as well as inside of store environments.
The program of works has improved inventory integrity and digitised product backfill processes. It is also expected to lead to other efficiencies, as well as higher sales.
Blyth said that tracking data signals in this way created opportunities to revisit stock ordering and movement decisions multiple times.
“[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 rather than place an order for 10 T-shirts [to go] from the manufacturer to a store, actually should I revisit that decision as it moves its way through: is there a more intelligent place to send this stock?”
Blyth also said the tagging of products, and understanding their size and dimensions, meant further optimisations in how containers are filled in warehouses, and how many items can fit in a particular shelf space.
“That gets you smarter in terms of how many you order,” he said.
Blyth added that the retailer had layered more intelligence into the picture to enable it to “predict [what] a customer wants”, and order accordingly.
“That’ll get us that next level of intelligence into our supply chain,” he said.