Kroger's Technology Integration

Kroger launched ClickList in 2015, allowing customers to order online and pick up in store.

This business is similar to the expanding "e-Grocery" market, however it does not deliver groceries to the customer's door. Despite the fact that Kroger has not revealed any sales or user data on ClickList, the public response has been encouraging, with lots of room for growth in the $9.4 billion market.

Kroger is also testing Smart Shelving, which will inform customers when they pass products they might need, give targeted advertising, and save labor expenses associated with the existing practice of re-pricing by hand.

The position of phones that utilize the Kroger app to deliver these services will be tracked by beacons placed throughout the store. Targeted advertising, where Kroger spent $648 million in 2014, may have the greatest cost-cutting potential with this technology. Kroger has achieved marketing response rates of over 60% by providing relevant, tailored offers, which will dramatically cut advertising budget and improve inventory management performance.

Finally, and perhaps most crucially, Kroger is collecting and analyzing "big data" to gain a better understanding of its customers and impact strategy. Kroger bought Dunnhumby USA's data-mining technologies in 2015 and formed 84.51°, a data collection and analysis firm. Kroger can increase operating margins by using motion sensors, temperature sensors, online shopper profiles, purchase history, and weather to effectively capture and analyze customer data. This allows Kroger to improve inventory forecasting, analyze customer buying patterns to inform supplier negotiations, determine which products to carry and where based on local demographics, and develop customer loyalty programs to increase the l This capability has already resulted in hundreds of millions of dollars in cost reductions, according to Kroger executives at its annual investor day in November 2016.

Steps to Take Next

These technological advancements have resulted in more efficient operations, higher margins, and more loyal customers to date, but Kroger is overlooking an opportunity to extend these competitive advantages to the grocery delivery business. Kroger recently invested billions of dollars in the Midwest, acquiring hundreds of stores and introducing 120 Wal-Mart-style supercenters. The $9.4 billion grocery delivery sector is growing at a rate of roughly 10% per year, luring customers away from traditional stores. The web infrastructure and data collection used by Kroger should be expanded and applied to grocery delivery. By maximizing savings through inventory management, labor usage, and advertising, this service has the potential to make Kroger the market leader. Check more information at feed kroger com.
 

Millennials are increasingly eschewing grocery stores in favor of restaurants and the rapidly growing number of food delivery services. Despite this, Kroger, the country's largest retailer by revenue, is booming. Data collection, online ordering platforms, "smart shelves," and quick checkout are all examples of how Kroger uses technology. Is that, however, sufficient?

The classic supermarket is under jeopardy. People are eating out more than they are cooking at home, according to current trends. Additionally, groceries can be acquired from a variety of places, including AmazonFresh, huge convenience stores, and retail behemoths like Wal-Mart. Traditional grocery businesses must discover innovative methods to use digital technology to establish new distribution channels, strengthen consumer relationships, and cut costs in order to remain competitive. Kroger, the nation's largest supermarket company, has weathered the storm thanks to a number of technological and digital linkages.

Kroger strives to provide value to its consumers by offering high-quality products at reasonable rates, a pleasant shopping experience, and personalized loyalty benefits.

Kroger's value proposition and business strategy have essentially remained same, but three examples of how the company is currently incorporating digital technology are online grocery ordering, digital shelving experiments, and the collecting and analysis of "big data."