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Sunday, 20 August 2017 10:18

Meijer to restructure I.T. department amid changing retail landscape

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Meijer plans to restructure its information technology services department. The changes, which will affect about 10 percent of the department’s staff, include layoffs and outsourcing the functions to CapGemini, a multinational I.T. consulting firm. Meijer plans to restructure its information technology services department. The changes, which will affect about 10 percent of the department’s staff, include layoffs and outsourcing the functions to CapGemini, a multinational I.T. consulting firm. Courtesy Photo

WALKER — Amid intense competition in the retail grocery sector, Meijer Inc. will trim and restructure its information technology services (ITS) staff in the coming months, MiBiz has learned.

While declining to discuss specific numbers, a senior spokesperson for the Walker-based superstore retailer confirmed that Meijer announced changes last month within its ITS workforce and that some staffers had been or would be “displaced.”

“Our focus on being as efficient as possible is key to our ongoing success in a highly-competitive retail environment,” Frank Guglielmi, senior director of communications for Meijer, wrote in an email to MiBiz.

Guglielmi declined to discuss Meijer’s strategy or any specific numbers regarding the restructuring of the department. However, a source directly familiar with Meijer’s I.T. department said the changes affected about 10 percent of staff.

The source — who talked to MiBiz on the condition of anonymity because the person was not authorized to speak publicly — said the company would lay off 46 employees and that another 25 would have their employment transferred to CapGemini.

CapGemini is a French multinational I.T. consulting firm with about 190,000 employees worldwide, according to its website.

A spokesperson for CapGemini did not respond to a request for comment at the time this report went to press.

The source familiar with Meijer’s I.T. department said that the changes would occur over the rest of this year and possibly into next year.

The privately-owned Meijer had revenues of about $16.6 billion last year, according to estimates published in Forbes.

Much of the restructuring comes amid the company’s shift to meet consumer preferences for home delivery and curbside pickup of groceries, according to the source.

Meijer’s move to restructure and downsize its I.T. department as part of this business model shift fits with the current dynamics in the grocery industry, according to experts.

Given the number of providers that perform these services and the costs associated with them, many retailers commonly outsource their technology functions, said Marcel Zondag, an assistant professor of marketing at Western Michigan University with a focus on food and consumer goods.

“I think that’s very much in line with any other industry that has to make decisions as to what is a core competency — what is a primary activity you’re going to do yourself and which is one you’re going to outsource,” Zondag said.

Outsourcing non-critical functions to dedicated I.T. providers can help retailers focus on the important technological aspects they need to run new and growing parts of their businesses, he said.

In recent months, Meijer has expanded a home delivery service across its six-state footprint through a partnership with Shipt Inc., a mobile application delivery service.

Similarly, Batavia, Ill.-based grocer Aldi Inc. announced last week that it would begin piloting home delivery in Atlanta, Dallas and Los Angeles through a partnership with Instacart, another app-based delivery service.

Still other retailers, including stores owned by Byron Center-based SpartanNash Co., are creating “click-and-collect” services that allow customers to shop online and visit a store location to pick up their order. Among them is Meijer, which debuted its Curbside service in 2015.

Additionally, many retailers are turning to “big data” mining to personalize customer experiences, a shift that continues to cause significant changes in the industry.

Trade publication Food Dive named data mining as one of the seven major industry trends “that will define grocery retail in 2017.”

While data mining may have been the last of the seven trends mentioned in the report, WMU’s Zondag believes it’s one of the most important shifts playing out in the rapidly changing retail grocery industry.

“You could argue in grocery retailing that understanding your shopper, which at the end of the day is a data game, is pretty prime to your success,” Zondag said. “The sea change in the industry is based on the fact that knowing your customer is actually the key to success.”

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