Meijer Stores Preserve That Local Flavor With Finance Transformation

Anja Reschke

Founded in 1934 in the midst of the great depression, Meijer is now a major retailer that operates 228 supercenters and grocery stores throughout Illinois, Indiana, Kentucky, Michigan, Ohio, and Wisconsin.

As a pioneer of the “one-stop shopping” concept, Meijer stores have evolved through the years to include expanded fresh produce and meat departments, as well as pharmacies, comprehensive apparel departments, garden centers, and electronics. The company also includes manufacturing facilities and captive dairies.

Meijer’s growth has been fueled by adherence to six key commitments:

  • Freshness – offering consistently fresh food
  • Community – giving back to the towns and neighborhoods it serves
  • Local assortments – acting like the local grocer of old that knew its customers’ needs
  • Innovation – adopting technology; for example, the company was one of the first to implement laser scanners
  • Personalization – offering customers an individual experience

With the company still growing, why did Meijer decide to make a major investment in software to support its financial operations?

The reality was that the retailer’s financial systems landscape had been custom developed over many years. The company had 450 legacy applications and a complex infrastructure that was hard to scale to support expansion.

Retaining the personal touch

Plus, Meijer’s management recognized that it was getting more and more difficult for personnel to know its customers and maintain the intimacy with them that is so important to the company’s future success. According to Terry Ledbetter, Meijer SVP and CIO, the only way forward was to simplify its systems.

The first phase of Meijer’s transformation journey is deploying software for its finance and purchasing functions, with help from Capgemini. The software is being implemented in a hosted, cloud environment, which will also be used for production, as Ledbetter believes that this is the best way to mitigate project risk and accelerate time to value.

Supporting ongoing growth

However, if the solutions implemented were only for finance and procurement, that would certainly be overkill. Indeed, this is not a standalone project. Instead Meijer is starting a phased journey that will involve a new IT platform that includes all the necessary components to drive value and support the company’s growth in the foreseeable future.

Meijer and Capgemini are implementing a wide-ranging retail transformation program that covers the entire enterprise. The program is organized around four broad areas: store operations, merchandising, supply chain, and finance/administration. The overall objective is to achieve sustainable improvements in Meijer’s cost structure while maintaining its established quality and market appeal. The company set an aggressive goal of sustained selling and reduction of general and administrative (SG&A) costs.

What’s the intended result? The company expects a number of benefits, including improving its competitive position, taking further cost out of its supply chain, leveraging the talent of its people, and reenergizing the omnichannel shopping experience.

Realizing a broader vision

However, as Ledbetter explains, there is one overriding vision that is driving the company’s IT investments.

“When you walk into my store, I want to know what you want and how you like it, and I want to give it to you. That’s very hard to do with millions of people coming through our doors. But I would argue that whoever figures out how to do that will win in this space. That’s what this journey means to us. The only way you can do that is with massive data collection, superior analytics, and by pushing that information into your store directors’ and team members’ hands. And that’s what we intend to do.”

For more on creating moments that matter to customers, anytime and anywhere, see Live Business: Live Customer Experiences for the Digital Economy.

About Anja Reschke

Anja Reschke is the Senior Director of Strategic Ecosystem Marketing at SAP. She is responsible for the development of joint strategic marketing plans, programs, and activities, with global strategic services and technology partners.