Kroger Elevates 84.51° Leader To Run AI Strategy | Fast Five Shorts

Kroger.

I can't wait to talk about this.

Kroger has created a brand new executive role, Chief Data and AI Officer, and filled it by elevating Milan Mahadevan, the president of its 8451 analytics subsidiary, to lead the company's entire AI and data agenda going forward.

According to Grocery Dive, the appointment was announced on Kroger's fourth quarter earnings call by Chairman Ron Sargent.

Mahadevan will continue to lead 8451 in addition to taking on the role.

And all of Kroger's data and AI teams will be consulting consolidated under his leadership.

His mandate is to, quote, fully maximize, not not just maximize, Jen, fully maximize Kroger's data assets and develop next generation agentic capabilities that, per the company's statement, will, quote, reinvent how we operate as enterprise and redefine how we engage with our customers, end quote.

And side note, reinvent is definitely the most overused word in all of retail media coverage.

CFO David Kennerly said the decision to create the position makes, quote, a big statement about how serious we're taking AI, end quote.

And confirmed that Kroger has significant investment dollars in 2026 and beyond targeted at making sure that we crystallize this opportunity.

That too was a quote, Jen.

Here we go.

Is naming an insider from 8451 to run Kroger's AI strategy as its new chief AI officer.

The right move?

I like this move, Chris.

So I'll talk a little bit about why retail media is like near and dear to my heart.

I love talking to retail media leaders because there are many entrepreneurs inside of these large companies and so there's just this really cool factor about those that do really well in this space.

But Millen has been with 8451 for I think 10, 11 years.

He started in an innovation role and then he moved to the COO and now the president and CEO of the group.

Before that he was with Dunn Humby.

So I don't hate this move.

I think it's a really strong choice.

Retail media was just as unheard of as some of this AI opportunity not that long ago.

True.

And I think leading a retail media group of this scale, you could sort of call it an insider.

But in many ways when you're in retail media, you're acting as a vendor partner to the business.

Hence the reason to create 8451 rather than just call it Kroger and a media division.

So if I were recruiting for this role I like the transferable skills.

I like someone that has led and built what they have in retail media.

I think they're going to have deep experience and expertise in turning data and algorithms into revenue.

I think they're going to be fantastic at understanding how to build out new technology platforms and they've got that cross functional experience.

So they're enough of an insider or Millen in this case I would expect is enough of an insider that he truly understands the business well enough to implement AI in a way that could take hold in all of the areas of the business, not just one, not just merchants, not just operations.

Right where and how could it be successful?

The other thing I know about retail media leaders is like I mentioned earlier, they've got like this entrepreneurial spirit which means they have this good mix of scrappy.

Figure it out.

You've got two to three years to make this thing profitable.

And by the way, there was nothing there before.

You've got that.

But they also, and Millen specifically in his role I would expect has incredible vision and strategy.

So they have to have both.

My only pause on this was when you said he will take over this new AI officer role but continue to run 8451.

So to me that's one heck of a role they're asking from Millen.

We have talked to so many leaders that have been part of 8451.

Don Humby, Albertsons retail media Collective Targets Roundell.

I've never heard anyone, Chris, anyone in the retail media space, no matter their success, size, scale that say they have it all figured out.

So what that means is Millen is now responsible for continuing to innovate and elevate 8451 which is also still changing at the speed of light by the way, the opportunities there.

And the CFO is now saying his new side project.

And I don't want to say it's a side project, but that's what it feels like to me.

This is my only hesitation is the CFO is saying also could you quote, reinvent how we operate as an enterprise and redefine how we engage with our customers?

End quote.

So for that reason, Chris, I think I like the move.

I think he could be a fantastic candidate to take this over.

I don't think it shows quite the big commitment that this headline is saying it does because if they were really that committed, I think they would take them out of 8451 and truly carve out this new role and make hey Millen, this Is your job.

Go make it happen.

That would show a bigger investment to me.

Okay, all right, so, so what I heard from you is, and we're going to go a little long on this one everyone, because I think.

Well, I already have Chris, so I set you up for that.

I'm going to go even longer because I think this is a really important topic.

You know, it's basically, it's about how do you implement AI in a retail organization?

And so what I heard from you Jen, is you're basically saying he's got the qualifications for the job.

Like he seems like on paper he seems like the right guy for the job.

My question though is, is, is making a chief AI officer the right thing to do?

Because we had A and M on a few, we had a similar story.

Like I don't remember who it was, which retail it was, might have been Dollar General, but I'm not sure.

We asked them about that and they were a little worried about that because they thought it was very similar to the approach that we took back in the 90s when E commerce came along.

You separated E Commerce out as this kind of separate thing and it lived on its own and therefore it didn't get inculcated back into the full extent of the business.

Which I'm hearing when you're saying or you're talking, you're like, that's going to be tough.

Yeah.

Because he's still got to run a retail media business and he's got to figure out how to operationally get this inside of an entire organization too.

So, so, so that's really tough.

So I'm, I'm personally split on this and I'm gonna kind of stream of conscious tell you why.

Jen, I want to go back to you, but you know, on the one hand, on the one hand I, I feel like you need a wrangler of AI.

That's the best way I could put it.

Like you need a, a chief wrangler of AI in your organization.

On the other hand, you also need complete and total buy in from the business units to make AI work for them.

So is putting the data guy in, in a chief role like that the right move?

I don't know because what I hear from folks, I just did an interview on this that we released on Monday.

What I hear from folks is that data is actually not as important as people think given AI because you don't need the data lakes that you once needed because AI can sort through that in all kinds of new ways.

So I'm not sure the data guy is the right person to put in that now, he might be fine, but I'm just saying in general, now, I'm talking broader retail landscape.

You can put it under the cto.

Is that the right move?

Possibly.

And you know, Kroger cto, because you know how these things work, Jen.

You know, he's pissed he didn't get the title.

So there's already going to be infighting about who's going to support who on this initiative.

And.

Or the other option is like, do you just charge your individual business heads with deciding how and where to deploy it?

It's.

It's definitely a tough question, and one to which I don't think anyone has the answers yet, least of all me.

But at the end of the day, it's why we do this show, to help us arrive at a collective understanding of what could or could not be the best move, or what are the right moves to make, or definitely the wrong moves to make.

And to me, it all comes down to what problems are you trying to solve with AI?

So if Kroger has.

So when I hear you, Jen, I say to myself, if Kroger has said we think the best place to deploy AI first and foremost is in retail media.

Yeah.

Then I could get on board with it.

Like, then it seems like it's very aligned strategically.

But if it's, hey, we wanted.

We wanted to find it across the organization.

I don't know.

I think there's still a lot of.

Lot of.

A lot of matzo balls dangling out there that we got to figure out.

But I don't know.

What do you think to everything I just said?

Matzo balls?

That's what I heard.

No, I'm just joking.

That's what I think.

No, I hear you on this, and I think it very much depends.

I think it depends on what your mission is with AI.

So if you are using AI as a business to help you run faster, if you were already going from point A to point B, but you're saying, how do we implement AI to now sprint from A to B, then I do not think there's a need for a chief AI officer.

Someone said it to me recently as.

But if you're building a plane with AI that's totally new and different, and you do need someone who is solely dedicated to understanding how you can utilize AI to build that plane and fly.

And so I think it probably depends on your chief Technology officer, who they are, what they already have on their plate, what their initiatives already were.

Certainly it could make sense to throw AI as a major initiative under your cto.

I don't know enough about what that CTO already has going on, right.

What systems and technologies and are they more technical in nature?

Because I think bringing someone in that's a visionary, someone that already understands how to create buy in.

You said buy in, right, Chris?

Anyone in retail media that has done well and has been there for almost 11 years and continue to see 8451 grow, you're creating buy in on both sides, right?

With the manufacturers, with the business units.

I think if Kroger's mission is to build a plane with AI, if they're like, no, no, no, this thing is bigger, we don't want to just leave our existing processes and do them faster.

We want to do new, different, bold things.

I don't hate the idea of giving someone this specific title to focus.

Maybe they're thinking like you are, Chris, and dipping their toe in and that's why they haven't taken as 8451 roll away.

Right?

They're like, let's see if we made this his title and we're not ready to pull him away from 8451 yet.

But that.

Those are my thoughts to what you said, Chris.

Those are.

That's what I'm.

That's where I'm at.

The one other thing I would say and because I've been talking to a lot of tech companies about this.

In fact, Ellen, I just.

Producer Alan and I just did an interview with somebody where they said like, you know, they made the key point, which I thought was really smart and articulate, was, you know, the boards are all asking everybody, what's your AI strategy?

And that's not the right question.

The right question should be what problems you have or what goals do you need to accomplish and where is AI going to help?

And so when I see moves like this, it starts me to wonder what questions are being asked in the boardrooms.

And when you're making a chief AI officer, it seems like it's a response potentially.

I'm not saying it is in this case, but potentially it's a big watch out to be like, okay, we're telling our board we're putting somebody in charge of AI because we need a strategy around it.

And that is where the issues come in the long run.

I would agree with you there.

I don't think an AI strategy, what is that?

Right.

I mean, if someone asked me that for my organization, I'd say that's not the right question.

The question is, who do we want to be and what felt hard, impossible, out of reach two years ago and what problems are we trying to solve with AI and if.

If I had someone like Mellon to just.

Millen, if you'd like to join my team to step in and say, hey, here are our objectives, like, here's our big picture out of the box, bold vision for who we want to be in the next few years, we need you to help implement AI to move those things forward.

I agree with you on the business heads have to be the owner.

They know their business, they know the current process, so they've got to be in the loop.

But I think those business heads are probably thinking about how to run F. And Millen could be thinking about building the plane that gets you to the two to three year vision.

Yeah, if.

And I'm giving him a whole lot of credit here.

Again, let's just speak in generality, a chief AI.

Yeah, I think that's what we're doing.

Yeah, yeah, yeah.