It has been two years since Kroger introduced us to the Krojis (their animated characters), and love them or hate them it would seem they are here to stay. They are in television ads, in print ads, on the website and can be found all over the store. At that time, it was big news for Kroger and helped usher in their new branding “Fresh for Everyone”.
It goes without saying that a LOT has happened at Kroger in the past two years, we also think a number of noteworthy developments have happened recently as well. So, this week’s QuickWit is focused on the top Kroger stories…
Welcome to the first Kroger QuickWit:
Corporate:
Kroger adds another BILLION dollar brand to their portfolio with Home Chef reaching that milestone. Founded in 2013 by Pat Vihtelic, Home Chef merged with Kroger in 2018. Since then, Home Chef has advanced the mealtime shortcuts and solutions to transform how customers approach meal prep.Partnerships:
Kroger geographic expansion made possible by Ocado
The Ocado news isn’t new, but now that the sheds (the name for the automated warehouse) are coming online they are making headlines. Kroger is leveraging these locations in new geographies where they have no physical stores. The first location is in Florida, with the NorthEast to be next.
It’s one thing to get current shoppers to adopt grocery delivery. It is going to be a much larger hurdle to convert a shopper who has never stepped foot in one of your stores. Kroger seems committed to make this happen. If the Ocado sheds become profitable, and can win in new geographies Kroger is going to be a force to reckon with!
Instacart to help deliver groceries in 30 minutes
The collaboration establishes Kroger as first grocery retailer to directly provide a national convenience delivery solution which is available through Kroger’s site and app and Instacart’s new “Convenience Hub” on the Instacart Marketplace. With the launch of Kroger Delivery Now, Kroger redefines convenience by being the only delivery service in America that doesn’t require customers to make a trade-off on selection, quality, price, or speed – and will deliver orders of $10 or more in as little as 30 minutes.
Kroger and Bed Bath & Beyond partner in product offering
The partnership will bring BBB Baby & Home products to Kroger.com and select stores. The omnichannel pilot is Kroger’s further expansion outside of just grocery products. “Anything, anytime, anywhere,” says Rodney. BBB shares went up +80% after the announcement. More diversification added to the marketplace on Kroger.com – looking to become a solution beyond just groceries for their shoppers. And what better segment to go after than families with young children!
It’s cool, it’s robot grocery delivery and it’s not going away.
84.51 / KPM
Kroger launches a Private Marketplace
Big news coming from 84.51 / KPM. Kroger announced at AdWeek last week they are launching a PMP (private marketplace). The platform allows clients to use their demand-side platform (DSP) of choice. Data is money, and Kroger has blown open the doors for extending first-party data beyond their walled garden—while maintaining (shopper) privacy and control. The rollout also marks the first time clients can get self-service access to KPM’s targeting solutions, retail performance metrics, and quality controls like verification and brand safety tagging.
This could be a very big deal for KPM, how they work with clients and how they compete in the market. With this move KPM is really working to set themselves apart from the competition.
Kroger opens transaction-level data to CPGs
The grocery giant’s 84.51° data analytics subsidiary is introducing the 84.51° Collaborative Cloud. This platform is designed to provide 24/7 access to clean, unaggregated, transaction-level data for 60 million de-identified households, updated weekly, in a privacy-compliant, hosted environment that has been built to an individual company’s specifications and data needs.
This is the Holy Grail at Kroger, access to their shopper card data and the ability to bring it in house for CPGs. Long ago this was a pipe dream, but Kroger (and 84.51) has realized the value – both financially and with CPGs bringing better insights.
Shopper
The theory of the “Hybrid Shopper”
During the COVID-19 pandemic, “hybrid shoppers” began merging their physical and digital retail activities and will only continue to increase their omnichannel engagement throughout the upcoming holidays and beyond. The pandemic removed the barrier to get millions of shoppers to try pickup or delivery for the first time, and many are keeping these options in their routine going forward.
Kroger CEO Rodney McMullen expressed the enthusiasm for the future of grocery e-Commerce at the most recent GroceryShop. Kroger wants to remove the shopper from thinking HOW they would receive their groceries, and instead focusing on the food first.
Rodney explained further, “We want to have a customer that when you think food, you think Kroger. And when you tie all of it together, it makes it easy. … We’ve always had the theory of it, but it was the first time we had a true data point that the customer really did switch from one to the other in a totally seamless way.”
And just in case you wanted some more data on the shifting digital preferences of grocery shoppers, this story from the Cleveland Research Company highlights exactly what Rodney was saying.
Kroger launches Boost membership program
This new membership program that offers two options for no-fee delivery service; unlimited no-fee delivery within 24 hours for a $59 annual fee, or in as little as two hours for a $99 fee. The program has rolled out in the Cincinnati, Atlanta, Indianapolis and Columbus, with additional markets set to be added in 2022. Delivery and eCommerce are going to be a huge focus for Kroger as they start to build their presence in geographies without physical stores – such as Florida. Lots more to come here from the Kroger Company.
Now What?
Last week’s top retail news:
CVS has a great quarter and adds Physicians to their payroll
CVS announced earnings that beat expectations, seeing revenue rise by 10% compared to a year ago. They also raised their forecast for the rest of the year. Additionally, CVS announced that they are working with ‘speed and urgency’ to create physician-staffed primary-care practices. CVS has invested a lot in health over the years, but this really is taking it to the next level.
Nuro raises $600 million from investors
Our favorite robot delivery vehicle maker Nuro has raised $600 million in Series D financing from a group of investors that includes Kroger and Google. They also announced entering a five-year strategic partnership with Google Cloud under which it will use computing and storage capacity provided by the internet company to help develop Nuro’s self-driving vehicles.
Circle K to test check-out free tech in their stores
Circle K stores in Tuscon, Arizona will serve as the initial rollout of a check-out free option via Grabango technology in a partnership with Alimentation Couche-Tard Inc. Convenient stores getting more convenient, something we are definitely in favor of!
Ulta Beauty makes same-day delivery deal with DoorDash.
You’ve got to give it to folks over at DoorDash – they are working hard to hit profit. Deal after deal and solution after solution have hit the newswire recently, and the latest is with Ulta. The 6 market rollout will offer beauty on demand. Consider me a buyer if I can get Dapper Dan delivered to my doorstep.
HelloFresh posts strong Q3 results.
Group revenue +45% (1.41B Euros; constant currency), US revenue +51%, +41.6% YOY order rates (27.6MM), and increased revenue growth outlook (57%-62% from 45%-55%). Adjusted EBITDA has not changed. A really strong performance, especially as consumers are leaving their homes more often than during the pandemic. It appears, at least so far, some habits have stuck.
Total sales increased +7.8%. ID Store Sales increased +6.3%, net earnings decreased -6.6% YOY. Previous net earnings of Q3 2021 had increased 33.2%. Decent results coming from Publix. Numbers have started to normalize from the highs over the past few years, and so it’s worth understanding them within context (ie. stacked basis).
NRF brings good tidings to their holiday forecast
It’s probably been almost a whole day since you heard the latest holiday prediction or forecast, so here is one more! The National Retail Federation projects November/December retail sales of $843.4 billion to $859 billion, up 8.5% to 10.5% from 2020 results. If you have time, this article has a great breakdown on what to expect for the upcoming season.
Nike and Dick’s tie loyalty programs together.
Nike is offering their loyalty program through Dick’s app and stores. Shoppers will get loyalty rewards from both brands in one location. Interesting to see these brand partnerships play out in loyalty, usually a walled garden space. Moves like this could represent a potential evolution in loyalty strategy.
Dick’s Sporting Goods expands concept stores
The nation’s largest sporting goods chain will open its second Public Lands store on November 5, in Columbus, Ohio. The format, which is focused on outdoor activities and land conservation, made its debut in September near Pittsburgh, PA. They are also re-opening more Golf Galaxy stores with more experiential retail opportunities. With more shoppers looking to go back into the store this year, seems like a great opportunity to redefine the experience!
And speaking of in-store experiences
A great article about how the lines between e-commerce and in-store retail continue to shrink, and brick-and-mortar must retain its unique appeal. Shoppers in-store are looking for a unique and personal experience, and more retailers need to keep that in mind as they develop their approach.
Bed, Bath and Beyond add same day delivery
The retailer is partnering with Uber to help deliver baby and kid products to parents nationwide, from either Bed, Bath & Beyond or buybuy Baby store locations. Yet another retailer working on the last mile and same day deliver solution – anything that caters to busy parents is likely a welcome addition!
Walmart adds another partnership to their offering
This time, they bring in Sir Elton John top bring their shoppers an exclusive eyewear brand. Walmart’s push to upscale their brands continues, this time with a music icon – another great add for the folks in Bentonville!
Under Armour (UAA) is having quite the year
The athletic clothing company had an excellent 3rd quarter and is raising its outlook for the rest of 2021 – predicting sales will rise 25% from last year.
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