Kroger’s Customer Science Division Will Put Omnichannel In the Express Lane

One would be tempted to forgive the casual observer who thought that if there’s one area of retail that would be protected from the storming evolution of online sales, then it would surely be grocery. Indeed, according to a 2014 PwC survey, only 5% of grocery shoppers ranked online shopping in their top three shopping options, with half of them citing that the main reason they don’t grocery shop online is that they cannot see or feel the actual product.

However, I’m afraid to say that forgiveness will not be granted by this blogger concerning this issue, for when we venture to delve a little deeper into the requirements of the 2016 grocery shopper, we find that digital expectations are in fact quite high on the shopping list.

Indeed, the same survey also revealed that over half of the respondents wanted the opportunity to integrate their mobile devices into the shopping experience. Though it seems that actually going to a physical store to browse the aisles and pick out in person what looks most fresh and appealing remains important to grocery shoppers, once in the store, the ability to use a mobile device to pay, create grocery lists, view store maps and earn loyalty points is actually very appealing.

And so it is to the credit of the US’s largest supermarket chain Kroger that their app enables all of the above – and a lot more besides.

The Kroger Mobile App

The Kroger mobile app – which has been downloaded more than 9 million times – contains localized shopping lists, targeted ads, store search functions, and even (in select stores) the ability to scan and bag items while shopping.

Watch a video about the app here!

The scan and bag feature is particularly innovative as well as popular (where available). With the ultimate goal of reducing checkout lines and checkout times for in-store customers, the app allows shoppers to immediately bag groceries as they pluck them off the shelves, and payment is taken automatically at the end of the shop.

Although the Downtown Cincinnati-based supermarket company has yet to confirm whether or not this scan and bag function will eventually roll out nationally, there have been rounds of expanded testing, which Kroger officials say are showing lots of potential.

"Customers tell us they love scanning and bagging and seeing their grocery bill while they shop," said Kroger spokesman Keith Dailey. "We are expanding our pilot to 15 locations in Cincinnati to reach even more customers and generate more feedback with an eye toward continued innovation."

Pushing Online Sales

As noted, online sales for grocery is met with a certain amount of resistance from customers who prefer to touch and feel in-store rather than simply click and pay online. However, with a combined focus on providing customer convenience and intelligent interpretations of customer data, Kroger finds itself deemed as being the best-positioned retail company for online grocery gains in the US by Morgan Stanley in a recent ecommerce survey, beating out companies like Walmart, Target, and Whole Food.

Merging with Harris Teeter, Kroger was able to start utilising Teeter’s Express Lane technology, which enables customers to order online and pickup in store. And it wasn’t long after this that Kroger began testing its own click-and-collect service based on the Express Lane model – ClickList – which is currently available in nearly 200 locations.

Another mergence with nutrition and healthy living ecommerce company Vitacost accelerated Kroger’s ecommerce growth by two to three years, according to Keith Dailey. Vitacost’s experience with home delivery meant that Kroger was able to use the technology and insights available to test the delivery of more than 36,000 health-related and organic products in Denver under the ‘Live Naturally’ platform.

Driving Online Sales With Customer Science

A further weapon in Kroger’s expanding arsenal is the company’s customer analytics and insight division – named 84.51° – which gathers and analyses data from customers to improve its online performance. From the Morgan Stanley report:

“With its 84.51° 'customer science' division, Kroger has industry-leading data analysis capabilities. We believe the use of 84.51° knowledge can help Kroger continually refine its ecommerce offerings, likely leading to online grocery share gains.”

The 84.51° division is in fact an extension of Kroger’s existing partnership with dunnhumby – a customer science company that strives to help retailers perfect the customer experience through the use of data to craft personalization innovations.

"We are excited to bring our insights and capabilities to more of the American market and to continue our relationship with Kroger over the next five years" said Simon Hay, chief executive officer of dunnhumby Ltd. "The wider US market is a fantastic opportunity for dunnhumby to help more retailers and brands undertake a similar journey using data-informed insights to delight their customers and earn their loyalty."

Indeed, this partnership is perhaps the most important for the future of Kroger’s online grocery shopping efforts – something that Kroger’s CEO and chairman Rodney McMullen is very clear on. The last word goes to him.

"Kroger and dunnhumby revolutionized retailing in the U.S. by focusing on the customer, and we intend to do it again with 84.51°. We are launching 84.51° with a powerful foundation, including a decade of experience and a team of incredibly talented associates from both dunnhumby USA and Kroger. The ability to combine what we already know with other partners is exciting and will speed up innovation. We expect these innovations to grow our business and deliver a world-class customer experience. We will continue to utilize data science for the benefit of the customer and to deliver a personalized experience, both in store and online. Doing so will continue to differentiate Kroger and create value for our shareholders."

About John Waldron: John Waldron is a technology and business writer for markITwrite digital content agency, based in Cornwall, UK. He writes regularly across all aspects of marketing and tech, including SEO, social media, FinTech, IoT, apps and software development.

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