1. Channel: Grocery

Kroger Announces Play to Dominate Growing Retail Media Market at Investor Day Event

At its annual Investor Day event, The Kroger Company advanced 10 leaders to speak about the bullish future that this omnichannel grocery retailer sees even after growing ID store sales (ex Gasoline) by 14% and total store sales by $14 Billion in the last fiscal year. Kroger announced that it has set its sights on dominating the growing retail media market and the brand advertising dollars it is commanding.

The influence of data and insights on Kroger’s strategy should be readily apparent given that 4 of the presenters, including Chief Merchant Stuart Aitken, CIO Yael Cosset and Marketing VP Mandy Rassi, are alumni of 84.51, the longitude-based name of Kroger’s data science division which was born from the joint venture Kroger had established nearly 2 decades ago with dunnhumby, UK’s Tesco data science arm, before dissolving it 6 years ago.

The importance of data and personalization of experience permeated nearly all of the presentations. In the section dedicated to Kroger Precision Marketing (KPM), the speaker went to painstaking lengths to detail the rapid growth of retail media platforms, the impending demise of 3rd party cookies in tracking addressable audiences, how brands were both growing media budgets & shifting budget allocations in favor of retail media, and why Kroger Precision Marketing delivered what they argued was the best ROAS (return on advertising spend) of any major platform in consumable groceries.

Key points advanced:

  • KPM is designed to close the loop between media exposure and omnichannel sales
  • Consumers increasingly expect shoppable media
  • 96% of all Kroger sales are household attributable
  • Kroger can help brands target the right HHs, reduced wasted ad impressions & optimize media mix
  • 3X the sales impact of off-site media effectiveness vs. competitors
  • Case study Kraft Heinz: delivering average campaign ROAS of 500%

Kroger’s message to brands seems to be working. They reported the following on brand adoption of KPM:

  • >1,300 brands investing
  • 85% retention rate YoY
  • 200% spend increase from retained brands
  • 135% KPM revenue growth

It would seem that Kroger has come a long way in personalization from its one-trick pony days of loyalty coupon mailers and sits ready to join Walmart Connect, Target Roundel and Instacart Ads in seriously challenging the 800 lb retail media gorilla Amazon in capturing as much retail media budget as possible from brands.

By Peter V.S. Bond

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