Feeling the pinch from online-only grocers, many brick-and-mortar supermarkets are beginning to dip their toes into mobile marketing this holiday season. Kroger, on the other hand, is jumping all the way in.
The Kroger Co. supermarket chain, with almost 2,800 stores in 35 states, boasts annual sales of more than $115.3 billion. But Kroger is still facing many of the same struggles as smaller brick-and-mortar supermarkets, as meal kit delivery services and pure-play digital grocers move into the landscape.
Earlier this year, Kroger launched a new effort to connect online and offline experiences, setting new standards for large supermarket chains. Restock Kroger and ClickList Pickup were both seen as successes for the company, with ClickList Pickup undergoing a name change—it’s now called Kroger Grocery Pickup—in September.
Part of Kroger’s success in testing these new mobile strategies is thanks to the company’s decision to take over North Carolina-based Harris Teeter in 2014.
In an interview with Street Fight, technology strategist Ed Kennedy, senior director of commerce at the global software firm Episerver, said Kroger is “setting the tone” for grocers’ response to digital by embracing it full-throttle with website improvements, ClickList features, partnering with fulfillment providers, and enabling digital coupons in-store.
“Some grocers may need to take a more measured approach by testing these initiatives in smaller markets before rolling out enterprise-wide,” Kennedy cautioned.
But with the holiday season in full swing, Kroger hasn’t stopped looking for new areas for digital investment. The company recently launched voice-assistant ordering for grocery e-commerce, just in time for the holiday season. The capability, announced by The Kroger Co. Technology Division in November, allows consumers to interact with their Kroger Grocery Pickup cart via an action in the Google Assistant voice app.
While not tied exclusively to the holidays, the initiative’s launch came during one of the busiest times of the year for supermarkets. The service, which is activated by consumers saying “Hey, Google” into their device, is designed to help reduce long lines inside stores. It has already launched at a half dozen Kroger-owned banners, but the company has plans to expand the program later this year and throughout 2019.
That’s not all that Kroger has in mind for the holidays. In another example of testing the boundaries, the company will be selling brands that were formerly exclusive to Toys “R” Us inside Marketplace stores this holiday season. The move is part of a partnership with Geoffries Toy Box, a subsidiary of Toys “R” Us.
Kroger is also testing online order pickup at more than a dozen Walgreens stores located in and around Cincinnati. The pilot will run through the holiday season.
Looked at in siloes, Kroger’s initiatives may not seem wholly surprising for a brick-and-mortar supermarket chain working to stay relevant in an environment where more and more shopping is happening online. But collectively, the initiatives point to a larger strategy that Kroger is adopting with a company-wide push to take on any pure-play digital competitors coming down the pipeline.
Kroger initiatives like curbside pickup, mobile apps, and digital coupons are all designed to help eliminate the long lines and crowded aisles consumers dread on busy shopping days around the holidays, explains Andrew Park, senior director of customer experience strategy at cloud-based customer intelligence platform InMoment.
Park says that by ordering online, consumers know if certain items are out of stock, they won’t waste their time going to stores that don’t have what they need, and ideally, they will end up buying more and spending more. It’s also important for brands to be memorable, and Kroger’s strategic push around the holidays is certainly helping the company stand apart from other supermarket chains.
“[Brands] must establish a clear differentiation in shopping experience that focuses on the unique value that their brand brings to the relationship. Those brands who do this well understand the needs and wants of their customers and understand how they uniquely deliver on those needs,” Park says. “It would be a mistake for a grocery store to solely focus on what its competitors are doing and not identifying and capitalizing on what makes it special.”
Stephanie Miles is a senior editor at Street Fight.