Kroger, Ahold Tout Need for Fresh Data, Streamlined Digital Ops
Kroger’s Michael Schuh isn’t between 45-54 years old and doesn’t live in Louisville, KY, have teenage kids or drink diet soda – but he gets served digital ads assuming he does.
"I drank too much diet soda in college among other things, but none of those things are true now," said Schuh, director of product strategy and innovation, Kroger Precision Marketing. "None of those things are going to help an advertiser reach me in the moment. … So how can a marketer expect that media spend to be effective with me when over half of the data points they are using to target me … are completely inaccurate?"
Schuh, along with fellow director of product strategy and innovation at 84.51, Kroger Precision Marketing Lindsay Pullins stressed the importance of verified behavior data during a morning session on the final day of the Path to Purchase Expo in Chicago. He compared the results of his own shopper profile gleaned via third-party data and Kroger’s first-party data. The third-party data, as mentioned earlier, revealed inaccurate household information, while Kroger’s first-party data accurately fine-combed Schuh as an average spender of $74.29 per visit, along with his preferred store, what inspires his shopping habits (quality and convenience), what brands he’s loyal to (Simple Truth, Old Spice, Chobani) and what categories he’s open to brand-switching in (cheese, salty snack, frozen waffles).
“The game has changed,” Pullins said. “We have to get personalized.” Kroger Precision Marketing, with that first-party data, can target different messages to different shoppers such as identify a shopper who’s never purchased a brand and curate a deep offer to get that person to buy. On the other hand, a shopper who is very loyal to a brand can get a message that rewards the purchase.
There are much deeper examples, but Kroger is unlocking what a shopper deems valuable to them through data, and value doesn’t just mean a lower price anymore, Schuh said, adding that the data only gets more granular as it collects more and more over time.
During the presentation, audiences got another glimpse at Kroger’s new branding effort: “Kroger: Fresh for everyone,” which the presenters said is an effort to reach all shoppers, regardless of location, and shopping behaviors, that everyone deserves fresh, affordable food. In a sense, that mission ties very much to Kroger’s data reach.
The goal is to enable commerce anywhere and make everyday moments shoppable. Schuch outlined this as making certain products are available, noting that by the end of the year 93% of households in the U.S. will be able to access Kroger digitally. Second to that, he said, it’s about being accessible, meaning to be able to shop on any device anywhere, and the last piece is continuing to optimize and deliver relevant messaging.
Kroger Precision Marketing tools offered to brands include video, influencers, Pinterest, display and native ads, push notifications, personalized online offers, and more. Pullins mentioned that Kroger emails have a 40% open rate, because they’re “customized and personalized.” Not sharing many details of the program, she said a case study aiming to retain female shoppers that exposed a select group of shoppers to emails and banner ads pre-shop, tied to an in-store display offer, garnered a 71% increase in household lift compared to shoppers not exposed to the ads.
Speaking just before Kroger in the large keynote hall, Linda Crowder, sales team lead, Peapod Digital Labs, an Ahold Delhaize company, acknowledged that with banners such as Food Lion, Hannaford, Giant/Martin’s and Giant spread across regions and working differently on digital, things are a bit disjointed and misaligned. For one, Food Lion customers get grocery delivery from Instacart, Hannaford shoppers use Hannaford to go, and the rest use Peapod. She said that will change as Ahold is developing “a singular digital site, all powered by Peapod Digital Labs.”
At the local level, stores will continue to practice the fundamentals, manage joint business planning and collaborate with brands as they always have in order to serve its local shoppers, Crowder said. But brands looking to enhance that digital reach across banners, personalize messaging to target shoppers or present a more omnichannel effort, Peapod Digital Labs will serve as that one-stop shop for digital opportunities.
“Our DNA is built on innovation and collaboration,” Crowder said, noting that Ahold with Peapod has been delivering groceries for 30 years. The company generates more than $1billion in e-commerce sales a year, fulfilling more than 6 million online grocery orders annually across 26 dedicated e-commerce fulfillment centers.
Ahold anticipates a more than 30% bump in e-commerce growth in 2020 and aims to have 600 click and collect locations running by end of the year, a segment of big growth for the company, Crowder noted.
Empowering the new omnichannel growth engine, as she called it, is the fact that shoppers who buy both online and in-store spend up to 3% more than just in-store shoppers. Crowder sees cross-brand retail media partnerships on the platform and in-store in the form of addressable TV spots, online and mobile video ads, social media and digital banner ads all working to target past shoppers and tackle “top funnel” goals such as awareness, interest and intent. Mid-to-bottom funnel tactics aiming to get products on the list and in the cart include consumer promotion offers, retail website media, store media, sponsored product ads and in-store shelf ads.
Over two days, Nov. 13-14, the Path to Purchase Expo hosted more than 50 educational sessions and learning labs. Coverage on the sessions will be expanded at the Path to Purchase Institute and Path to Purchase IQ.
The show also exhibited innovative media companies and solutions providers. The most innovative curated by Path to Purchase IQ editors in a program called Show Stoppers.
NOTE: This story originated from P2PI sister brand Retail Leader.