While 40% of Kroger shoppers today download a digital coupon before they shop, around half still consult the weekly print ad.
As a result, loyalty through personalized experiences “is not just about a sexy app,” said Matt Thompson, VP of digital business at Kroger, during a presentation at the National Retail Federation show Tuesday in New York.
Personalization at Kroger, Thompson explained, is about using shopper data so as to inform “all the elements of how we make decisions, whether they are choices about our stores and the assortment of products and services we put in those stores; whether it’s how our associates engage with our customers, [or] whether it’s decisions we make on private brands to meet their needs. “What customers are really looking for is — you can call it ‘omnichannel’ or ‘seamless’ — but it all needs to come together in a way that's relevant to the customer.”
Kroger, Cincinnati, accomplishes this not merely through collecting shopper data, but analyzing it through scientists at 84.51, Kroger’s newly minted analytics firm, said Yael Cosset, CIO for 84.51.
“Data for the sake of data is not going to drive much value,” Cosset said. “It may make us smarter, but without the science to harvest the data and find that nugget of information allowing us to understand the customer better, the data is just a dormant asset.”
Personalization takes multiple forms at Kroger, Thompson added, including electronic ads that display offers most relevant to shoppers: An online circular, for instance, will present different “front page” items to a shopper whose purchases indicate a vegetarian diet over a non-vegetarian. Similarly, readers of Kroger’s “MyMagazine,” which includes a mix of recipes, shopping offers and other articles, get a “handpicked” selection online.
Thompson also emphasized the importance of in-store service as a means of personalizing the experience for Kroger shoppers. “The mobile app has to be great and we want to make sure every digital touch point is personalized and relevant,” he said, “but it’s also about making sure our associates have the ability to deliver on that personalized experience as well.”
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The value in building loyalty through personalization is not always to drive greater sales per visit, but in driving a long-term relationship with Kroger’s best shoppers, Cosset noted. He likened 84.51’s mission of replicating the customer relationship that existed between a local butcher he shopped with while growing up in France.
“The butcher was not measuring our loyalty based on how much meat we bought that day,” he said. “He took a long-view of the relationship, making sure if I reward you as a customer by creating a special relationship, we will continue to interact over time.”