As grocers confront the threat of Amazon, Kroger has made digital a cornerstone of its strategy.
Digital sales grew by 90% last year as the country’s second-largest grocer worked to create a “seamless digital experience.” Expanding click-and-collect services played a key role in the increase, CEO Rodney McMullen wrote in his annual shareholder letter.
As the grocer opens those services to more shoppers and drives more traffic to its digital landing pages, it has the opportunity to capture spend from vendors looking to relocate dollars towards digital. However, few retailers are doing this, according to Gartner L2’s Grocery Site Monetization report, which identifies opportunities for grocers to monetize their digital platforms. The study finds that Amazon, Target, and Walmart capture a significant amount of vendor spend, serving over 30% of display impressions for CPG brands.
Kroger currently hosts brand stores for vendors such as Chobani and continues to make headlines with its 84.51˚ program and the promise of a dynamic advertising solution for vendors. However, Gartner L2 analysis identified limited advertising on Kroger’s site. As the grocer fully rolls out its program, it will be well-positioned to challenge Amazon, Walmart, and the rest for a share of vendor spend.