Kroger Builds on Its Invisible Advantage
Of all of the ways that innovation is happening in retail, some of the most profound changes are occurring in how retailers and brands engage with and influence shopper behavior.
These marketing innovations, unlike a splashy new ad campaign, are happening in less visible ways that involve data capture, analytics, personalized offers, measurement, integration and optimization. They’re also happening against a backdrop of huge changes in the way that brand budgets are allocated against new and existing media types.
Key Takeaways
- In marketing, retailers have emerged as media platforms, with more realizing the value of their shopper audiences in a digitally engaged world.
- Kroger Precision Marketing (KPM), a cross-channel media solution, can help brand marketers make sense of spending behaviors upended by the coronavirus.
- KPM new hire Nancy Winé, who’s leading advertising sales across all regions and clients, is eager to create new ways to build baskets and drive impulse in e-grocery.
This is due to a quiet revolution happening in the marketing world, in which retailers have emerged as media platforms — networks, in essence. This revolution hasn’t been all that quiet for those involved in marketing, but it’s poised to gain traction in the second half of 2020 and beyond as digital grocery accelerates. Retailers large and small now realize the value of their shopper audiences in an increasingly digitally engaged world where everything is becoming clickable and shoppable. In such an environment, brand marketing budgets are being put to use in new, interconnected and highly measurable ways.
“As shoppers are changing their buying behaviors, and there is an easier connection between an advertisement and influencing the buy, the reality is the days of historic silos in media investment choices are all starting to blur,” says Cara Pratt, VP of commercial and product strategy for Kroger Precision Marketing (KPM) at 84.51°.
Those silos consist of brand investment dollars spent against awareness and consideration tactics, shopper marketing activities in store, or trade investment dollars used for price promotions at shelf. The fourth silo now involves spending related to digitally engaged shoppers interacting with e-commerce.
“We’ve gone from three relatively clear lines of investments on behalf of a CPG advertiser to four potential verticals, which are starting to blur the line,” Pratt notes.
The Rise of KPM
Kroger recognized this shift sooner than most, when, in the fall of 2017, it created KPM, powered by its data science subsidiary 84.51°. KPM functions as a cross-channel media solution focused on precise, personalized communication to customers, with one distinct advantage: It taps into first-party purchase data from 60 million households that participate in Kroger’s loyalty program and are connected to 96% of the Cincinnati-based grocer’s sales.
The insights and capabilities of KPM are shaping up to be especially useful in the back half of 2020 as brand marketers attempt to make sense of spending behaviors disrupted by COVID-19.
Navigating ‘Super-Uncharted Territory’
Helping spread the KPM gospel with Pratt is a former Amazon executive well versed in the advantages of precision targeting. Nancy Winé joined KPM in May to lead advertising sales across all regions and clients. She spent the previous nine years at Amazon, where she co-created the consumables vertical, which is now the largest advertising vertical at Amazon. Prior to Amazon, Winé was on the senior management team for Integer/TBWA, where she launched and scaled Integer’s Digitail practice across more than 600 employees.
“I love to build and make things, and grocery is super-uncharted territory,” Winé says of her decision to join KPM. “Kroger has a footprint and unique ability to win in grocery e-commerce, and I want to help continue to build out that foundation. We have a very long runway with KPM, and we are innovating and creating new ways to build baskets and drive impulse.”