Kroger Uses Big Data
In 2012, Kroger began using a big data system known as QueVision to uncover ways to help reduce its customers wait time to check out. This activity is important because it shows how firms can utilize data to make important decisions about their businesses.
The goal of this activity is to demonstrate the value of using big data in decision making.
Read the case about Kroger's use of big data to find ways to improve their customers' experience. Then, using the 3-step problem-solving approach, answer the questions that follow.
Behind the scenes at this Kroger supermarket, computers, using infrared cameras, count shoppers in line to alert managers when to open new lanes and even to predict future traffic.
Kroger began its use of big data in 2012. The system is called QueVision, and it received the top retail innovation award from InformationWeek's Elite 100. Kroger installed QueVision because it wanted to reduce customers' wait time to check out.
How Does the System Work? "QueVision uses infrared sensors to count customers entering the store and at checkout lanes. Combining those counts with factors such as store layout, staffing levels for cashiers and baggers, and historical transaction logs, store managers use a simulator to access the number of registers that need to be open in real time. Estimates are also made on how many should be open in 15 and 30 minutes." The system has been installed in more than 2,400 stores.1
The data also uncovered additional trends that led to increased sales. "The system showed that there were more customers than Kroger realized buying a small number of items in the morning and during lunchtime, and that the express lanes were backing up. So Kroger added 2,000 new express lanes to its stores nationwide, which it credits with growing the number of those small orders over the last two years."2
The system has helped Kroger reduce wait time from an average of four minutes to about 26 seconds. As you might expect, customer satisfaction has improved since QueVision was installed. But there was another side benefit. InformationWeek reported that the "companywide cashier-friendliness metric, measured in customer surveys, has improved 24 percent since 2011."3
The QueVision system represents which area of the organizing framework?
Individual level processes
Organizational level financial performance
Organizational level processes
Situation factor inputs
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