What is the 'secret sauce' to Kroger's online success?
With pandemic-huddled households discovering online grocery shopping, Kroger has broken onto eMarketer’s top-ten U.S. e-commerce retailers list.
“Unlike some other retailers, Kroger was already making extensive investments in online capabilities well before the pandemic.”
America’s largest grocery chain landed at nine, moving ahead of Costco and bumping Macy’s off the list.
“The pandemic has shifted consumer priorities,” said eMarketer analyst Cindy Liu in a statement. “Kroger will benefit from two tailwinds this year: Eating at home continues to be in favor among Americans, and there’s been greater interest by consumers in ordering groceries online.”
"Our associates have been nothing short of incredible during the pandemic and they continue to inspire me every day. We have continued to diligently execute our Restock Kroger transformation while serving our customers when they need us most." - Rodney McMullen, Chairman and CEO pic.twitter.com/ewkvbWbB9Y
— Kroger News (@KrogerNews) December 3, 2020
In its third quarter, Kroger’s digital sales catapulted 108 percent, contributing 4.6 percent of the chain’s 10.9 percent identical sales growth (without fuel). On its quarterly call, Kroger officials cited past investments in fulfillment, personalization and omnichannel as contributors to the online growth.
On fulfillment, Mr. McMullen said Kroger’s more than 2,200 pickup and 2,450 delivery locations has “allowed us to capture the increased customer demand for e-commerce offering during the pandemic we have today, reaching 98 percent of our customers with a seamless customer experience around in-store shopping, pickup, delivery, and ship-to-home modalities.”
From flavored potato chips to sauvignon blanc wine, we’ve rounded up the top 10 trending foods of 2020. See if your favorites made the list and learn more about our food trend predictions for 2021 in today’s announcement: https://t.co/Y1bIXpY02p pic.twitter.com/q5kUvDdi4c
— Kroger News (@KrogerNews) December 17, 2020
The vast majority of digital customers are also shopping in-store, they visit more frequently and, on average, spend twice as much as those shopping in-store only.
He mentioned further plans to build a “flexible network of fulfillment options” with the expansion of its Ocado partnership to build online fulfillment centers in Michigan and in the south.
Online, Kroger is advancing personalization by leveraging its extensive customer data. Mr. McMullen said, “About 95 percent of customer interactions with product on our website and app are enabled by personalization, driving a significantly higher level of engagement in our offers and nearly doubling the likelihood of adding an item to a cart.”
Digital is also incrementally profitable, supported by increasing cost efficiencies around fulfillment and digital advertising revenue.
“We think the pandemic has accelerated the growth or transition to digital probably by three years. A customer really expects to be able to get something in-store, pickup or delivery. And they expect to be able to bounce back and forth based on what’s easy for them.”
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