Kroger: the Grocery, Retail, and CPG Powerhouse

by Rachel Novosad | Customer Loyalty

 

When you think of mass retail powerhouses, behemoths like Walmart, Amazon, and Target tend to be top of mind, ubiquitously associated with everything from groceries, apparel, beauty and home goods. One name that might not pop up as readily? Kroger. Kroger is arguably America’s most underrated grocery store with an estimated 2,764 stores nationwide.

Reporting $121.2 billion in sales at 2018 year-end, Kroger is actually the largest traditional grocery company in the U.S, headquartered in Cincinnati, Ohio and founded in 1883. Now, it’s a retail, CPG, and customer loyalty powerhouse.

Kroger has almost 3,000 grocery retail stores under a variety of banner names including supermarkets, seamless digital shopping options, price-impact warehouse stores, and multi-department stores. With locations across 35 states and Washington, D.C., they also have 253 fine jewelry stores under names like Fred Meyer Jewelers and Littman Jewelers.

Kroger’s success and genuine brand love continues despite its place in a changing and highly competitive landscape. It’s a turbulent time in the US grocery industry – instead of one-stop shops, customers are now looking to convenient online retailers, discount produce chains like Trader Joe’s and higher-status names like Whole Foods – and yet Kroger continues to thrive. Why?

Kroger Brand: Private Label CPG

Plain and simple, Kroger has consistently built trust with its customers over its many years in business. The company has long grown customer loyalty with a more traditional approach and a friends-and-family ethos, being known for its home-grown private label goods. Kroger has been manufacturing and selling its own food products since the beginning. Today, their private-label CPG portfolio represents 30.5% of all products sold. And their customers have trust in these products with 83% of customers shopping at Kroger purchase its private brands.

Customers trust Kroger’s private labels because they know they provide value and consistency, for a highly competitive price. One popular example is Simple Truth, Kroger’s touted store brand of organic and natural foods, which spans more than 35,000 CPG products.

Kroger and Retail Technology

Kroger understands the importance of innovation, and they’re no stranger to it. The company has been at the top of its innovation game since its early days, being the first store to combine meats and groceries under one roof, and the first grocery name to have an in-store bakery. They even piloted the use of optical scanners at check-out.

Despite its reputation for familiarity and tradition, Kroger has kept up with the times and rapidly-changing convenience technology. They’ve grown to offer a self-checkout app, curbside pickup, and one-day delivery by robot cars! In August 2018, Kroger partnered with Mountain View, California-based vehicle maker Nuro to pilot a self-driving grocery service with one of Kroger’s Fry’s Food Stores in Scottsdale, Arizona.

And that’s not all, Kroger has plans to take on Amazon too. Partnering with Microsoft and starting with two stores in Monroe, Ohio and Redmond, Washington, Kroger has installed smart shelves powered by Microsoft technology, designed to inform and guide shoppers to the item they’re searching for. (Kroger has expanded this technology to selective shelves in 100 other stores across the country as well.)

Kroger’s Community Values

It’s no secret that more “traditional” retailers need to step up their customer service in order to compete with the likes of behemoths like Walmart and Amazon, but Kroger also takes it a step further. From being touted as the only store to stay open during a hurricane, to helping community members get back on their feet after natural disasters, to prioritizing other give-back initiatives such as donating 330 million meals through more than 100 Feeding America food bank partners, Kroger consistently shows their communities they care.

Kroger also pays its nearly 500,000 employees an average of $14 an hour, which is well above the retail industry average and tends to result in better talent, customer service delivery and retention.

Kroger Rewards and Customer Loyalty

They always shine with their commitment to the customer experience, especially since launching its plus card program in 2003, and later partnering the card with Shell gas stations in 2010 to earn and redeem fuel points. Kroger Community Rewards allows everyday users swipe their card to earn points toward Kroger’s social and non-profit programs, an innovative way to use customer loyalty for a good cause.

Beyond that, the millions of users using Kroger’s shopping app were able to enjoy easy access to coupons and great user experience, allowing them to download, sort and sync coupons with their shopping lists, monitor their reward points, and pharmacy services like refilling prescriptions. On the flip side, they utilized the data behind consumer behaviors on their app, tailoring promotions to individual customers.

More recently, continuing to prioritize its front-end experience transformation, Kroger implemented a new rewards system in 2019 where shoppers earn double the perks for using its new debit card and mobile wallet together, including fuel points and private brand discounts.

Do you want to take a page out of Kroger’s book, and proactively boost customer retention and lifetime value, with a loyalty program that rewards purchases and consumer advocacy? Well, you came to the right place. Annex Cloud’s comprehensive Customer Loyalty solution delivers full online, in-store, and app-based loyalty functionality to engage and motivate customers to choose your brand no matter where they are shopping.

An Annex Cloud customer loyalty solution can allow you to reward your customers throughout the whole customer journey –from purchasing to writing reviews, referring friends, connecting on social media, and more. Don’t put off launching or revamping your loyalty program any longer, contact us or request a demo today!

 
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