Kroger reinvents grocery eCommerce with data
Josh Mendelsohn | January 19, 2016
In a recent blog post, our co-founder and Vice President of Business Development, Rob Gonzalez, explained how you can't out Amazon Amazon, given their sheer dominance in their specific area of eCommerce expertise. That being the case, Rob recommended that other brands focus on delivering excellent shopping experiences as a means of differentiation. The best way to do that: Simply put, merchandising. (If you want to know more, go read it!)
So, when we came across this article on Business Insider written by Kate Taylor, we couldn't have been more interested.
Here was a brand that was practicing innovation and winning: Kroger. Taylor explained that the regional grocery store chain is poised to dominate the online retail market when it comes to grocery sales.
"Kroger created an omnichannel, personalized shopping experience."
For one, Kroger created an omnichannel, personalized shopping experience by allowing its customers to order groceries online and pick them up at a local store. It provides shoppers with specific, customized coupons, and it has tailored its brand in over 135 locations to offer organic and healthy living products. Kroger will even deliver those consumer goods to its customers' front doors.
Kroger has created a strategy focused on providing something uniquely valuable to consumers, and the company did so by developing a pipeline of merchandising that includes personalized coupons, mobile shopping, in-store pickup and product delivery. In essence, it created a game plan that is required nowadays to succeed in eCommerce.
And it's all thanks to data and a few savvy individuals at this company who decided to take the Kroger brand into the eCommerce world with a unique and modern positioning in the grocery retail market.
Business Insider reported that Kroger merged with Vitacost, a company that leveraged big data analytics to sell healthy living products. Together, they created 84.51, which is now Kroger's customer analytics and insight division. This lent well to Kroger's whole new merchandising strategy: The brand knows exactly what its shoppers want.
This story proves that those who can get the data they need and act on it to deliver convenience and personalization will win.
Kroger has been around for 132 years for a good reason. In the past 12 years, it's been on a binge of grocery market domination, growing its revenue at a rate of at least 5.4 percent for 48 quarters in a row, according to PYMNTS.com. Carein Fleit, senior client partner and leader of executive recruitment firm Korn Ferry's Global Marketing Center of Expertise, told Retail Dive that this sector usually has a 5 percent coupon redemption rate, while Kroger's loyalty program boasts a rate of 70 percent.
Kroger is not only the "best-positioned" business in online grocery sales, according to a Morgan Stanley survey cited by Taylor, but Kroger is the second biggest retail brand in the U.S., despite only having locations in 35 states.
In the past few years, Kroger has made waves in eCommerce - it has changed the game. And it got that way by innovating.