5 Ways Kroger Aims to Up Its E-Commerce Game
The chief of e-commerce at The Kroger Co. has outlined five priorities for the grocery chain as it looks to win the customer at every touchpoint of the shopping journey in 2023.
At NRF's Big Show in New York City, Kroger VP/Head of E-Commerce Bill Bennett said the company wants to:
- Make digital coupons easier for shoppers to use.
- Speed up the digital shopping cart and checkout experience.
- Enhance the element of product discoverability online.
- Improve post-checkout communications with the customer.
- Make returns easier than ever before.
[Read more: "NRF’s ‘Big Show’ Offers Inspiration, Innovation"]
"The biggest shift that we've seen in grocery is how customers are responding to the inflation that we see happening in the market. And at Kroger, we see those customers looking for savings in a way that they've never done before," Bennett said. "We have a tremendous digital coupon platform that has seen strong double-digit growth in traffic."
The grocery chain is looking at the entire shopping journey to determine how it can make it easier for inflation-weary shoppers to save at Kroger.
"So everything from smoothing out the digital coupon experience, to reminding customers when they have those coupons clipped," Bennett said. "We're thinking about how do we make the online coupon experience more similar to what the experience is in store. Similar color schemes, similar shapes and queues that sort of point the customer to those savings so that they can really highlight and understand where they can find those."
Bennett says the retailer is also looking to further expedite a customer's shopping cart experience online.
"We invest a lot in what we call 'start by cart,' which is just sort of a carousel of starter products in the homepage based on what you've purchased in the past to personalize. So it speeds up your whole shopping trip dramatically when you add 20% or 30% of your past purchases from that one carousel. The goal obviously is to get the customer what they're looking for as quickly as you can."
But speed also has to be balanced with discoverability, Bennett said.
"I think all of us have had that experience where you're walking through the store, you have an item on your list, you see an item you haven't thought of, or there's a new item in a category that you're already shopping and you're sort of inspired to try something new," he said. "In search results, it's this very careful balance of getting the customer what they've bought in the past, what they're looking for with, 'Hey did you know there's something new that you can come and discover?' So balancing between speed and discoverability."
Bennett also mentioned that Kroger is thinking a lot about fill rate and making sure that customers get the products they ordered.
"How do we fully deliver on what the customer orders. ... The biggest complaint customers have in online grocery is they don't get what they order, but that's across the whole industry. We've got this partnership with Ocado where we're leaning in really heavily to build out our own proprietary delivery network where groceries are picked in an automated fashion from big centralized facilities where you're not competing with customers for the inventory that's there in the facility. So we can do a much better job of promising that inventory to a customer getting significantly higher fill rates, which of course leads to higher satisfaction and repeat loyalty as well."
Bennett drilled down on the concept of loyalty and how Kroger also wants to enhance the post-checkout experience.
"As we think about the post-checkout experience, we think a lot about how to move the customer up to loyalty ladder. You've got to build a relationship with a customer and get them to come back once or twice a week forever. And so just this last year we launched our new membership program we call Boost, which is really focused on holistically developing that relationship with the customer."
Kroger has more than 50% of its customers engaged in its fuel points savings program.
"And so you take that 50% base of customers rather than the much smaller percent that does grocery delivery, and now we give them 2X the fuel points on every single transaction," said Bennet. "So we launched that last summer. It's been a tremendous success so far as we see customers grow their basket with us, grow their frequency, grow their loyalty, and sort of move up that loyalty ladder."
Bennett mentioned Kroger historically has been good as a promotional retailer, highlighting in-store how much savings a customer is getting.
"But online we haven't focused on that as much because online grocery has been more of a convenience service, right? As customers are shifting their perspective more to savings, every time they check out, we're really hitting them with all the ways that they're saving money with Kroger between coupons and fuel points and their plus card savings and all those different pieces. We find that the more that we sort of lean into that trend of customers and help them see the savings that we can deliver, the more we bear loyalty, stickiness and they deal with us."
Lastly, Bennett discussed the company's new online refund service, another avenue to engender loyalty with shoppers but also to prevent return abuse as well.
"Something that's unique about groceries is that you don't get a lot of returns from customers. And so we tend to extend a lot of trust to customers, that when they need or want a refund that we want to take care of them and we get that to them," he said. "Of course, that introduces opportunities for abuse in the future too. We're thinking a lot about the right data science model, the right approach to make sure that we're understanding how customers are using a feature and that it's being used appropriately."
