Kroger, Ahold Tout Need for Fresh Data, Simpler Digital Operations
Ahold Delhaize USA has more than 2,000 stores under various banners across the East Coast. The Kroger Co. has even more outlets across 35 states and 22 banners. The reach of both of those companies is huge, yet top digital executives from the retail giants discussed the importance of leveraging data, predictive analytics and the use of their digital platforms to get very micro in their reach. The executives presented morning sessions on the final day of the Path to Purchase Expo (P2PX) in Chicago.
Path to Purchase Institute members can access more than 1,800 shopper marketing and technology insight articles, more than 14,000 marketing and merchandising images, and detailed retailer profiles — including operations and strategy info. See profiles for Kroger and Ahold Delhaize on p2pi.org.
While Ahold Delhaize’s presentation detailed its efforts to better streamline its digital offerings into one universal platform to better target shoppers, Kroger met audience members head-on with one question: “What data are you using to drive effectiveness in your media campaigns?”
Presenting alongside Lindsay Pullins was Michael Schuh — both directors of product strategy and innovation at 84.51, Kroger Precision Marketing — who stressed the importance of verified behavior data. Schuh compared the results of his own shopper profile gleaned via third-party data and Kroger’s first-party data.
The third-party data revealed inaccurate household information like the ages of his children and even his own age, as well as where he lived, that he rented and didn't own, and that his interests somehow were diet soda and minivans. Kroger’s first-party data, however, 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 identifying 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's 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, with the message that everyone deserves fresh, affordable food. In a sense, that mission ties very much into Kroger’s data reach.
The goal is to enable commerce anywhere and make everyday moments shoppable. Schuch outlined this as making sure that certain products are available, noting that by the end of the year, 93% of U.S. households will be able to access Kroger digitally. Second to that, he said, it’s about being accessible, by which he meant being 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, and personalized online offers. 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 that 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 with shoppers not exposed to the ads.
Speaking just before Kroger in the large keynote hall, Linda Crowder, sales team lead at Peapod Digital Labs, an Ahold Delhaize Co., 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 develops “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 to serve their local shoppers, Crowder said. But for 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 $1 billion in ecommerce sales annually, fulfilling more than 6 million online grocery orders annually across 26 dedicated ecommerce fulfillment centers.
Ahold anticipates a more than 30% bump in ecommerce growth in 2020, and aims to have 600 click-and-collect locations up and 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 of 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 were curated by Path to Purchase IQ editors in a program called Show Stoppers.
Path to Purchase Expo is a three-day dynamic learning event produced by the Path to Purchase Institute, focused on omnichannel shopper marketing strategies and technologies throughout the supply chain. It includes educational learning labs and innovative product and service exhibitions. Learn more at p2pi.org.