Kroger is pushing into new revenue streams, most interestingly what it calls “alternative profit.” This potentially signals Kroger moving further into advertising and site monetization, an area Gartner L2 previously called out in its Digital IQ Index: Grocery. Given how much advertising revenue has contributed to Amazon’s bottom line, this is an area to watch for Kroger moving forward.
Kroger calls out digital engagement—visits up 40-50% and e-commerce household growth up 82%—in its customer trends data instead of specific sales data, indicating the importance of digital to the firm’s growth strategy.
As L2 analyst Tom Gehani wrote in August, it looks as though Kroger Ship is a path toward nationwide coverage. But given that Kroger Ship still excludes perishable products, only time will tell if the retailer will be able to expand its online product assortment quickly enough to compete with Amazon.
Another area of strength noted in Gartner L2’s study is Kroger’s email marketing. These personalized emails, which focus on Best Customer Bonus messaging and available coupons, have clearly paid off for the retailer.
Meanwhile, private label continues to be an important trend across industries and grocery is no exception. Retailers continue to try to boost their own private label offerings on site and on social media, often at the expense of vendor brands.
Kroger and other retailers are continuing to try to improve the checkout experience. Amazon’s expansion of its cashier-less Amazon Go stores and Walmart’s entry into the space via Sam’s Club suggest this is only the beginning of a competition to see who can provide the most convenient checkout options.