A Real ‘Omni-Presence’
As a result of the behavioral shifts, Kroger’s website engagement is at an all-time high. The retailer’s 23 million unique monthly shoppers make it the leading retailer in the food and grocery category, according to comScore. And fueled by 116% year-over-year growth in 2020, its $10 billion-plus in e-commerce sales makes it one of the 10 largest online retailers of any type.
“To be number 8 on the list is a pretty massive accomplishment when you think that, about five years or so ago, we didn’t have an e-commerce business,” says Kalmbach. “The customers evolved, we met them, and now this is very much a part of what we believe the future will be. It’s been very exciting for the company but also humbling that we were able to show up in that way.”
To that end, Kroger finished 2020 with roughly 2,225 e-commerce pickup sites and about 2,500 delivery locations, which means that 98% of its shopper households now can utilize at least one of those options. Elsewhere, the first of 19 automated customer fulfillment centers that will roll out in conjunction with supply chain partner Ocado opened in April 2021. That partnership also boasts proprietary software in stores that will help employees pick and assemble online orders more efficiently for the shoppers using pickup services.
“A general guiding principle for us is [that] we want to own the relationship with the customer. We want to be able to build the solution and deliver that experience to them,” says Kalmbach, when asked about Kroger’s strategy for striking external partnerships. “But where we can feed in really unique, differentiated capabilities to better serve them, we’re all in.”
Innovation doesn’t begin and end with order fulfillment, of course, and Kroger is looking for ways to help customers solve their meal planning needs as well. Among recent activity is a partnership with Whisk, part of the Samsung Next food technology platform, in which Kroger customers can turn recipes from a variety of publishers, brands and apps into a smart shopping list for instant purchase from their local store. Another is an internally developed Twitter-based tool called Chefbot that gives customers recommendations based on snapshots from their fridges or pantries.
“At Kroger, we really embrace the culture of testing and learning. So there are very few things that we’re not willing to put in play in a pilot so that we can test and learn and continue to innovate,” says Kalmbach, pointing to the drone service currently being tested near Dayton, Ohio, that will deliver products anywhere the customer needs them. (“Imagine you’re at the park, you’re having an awesome barbecue, and you forgot your s’mores kit.”)
“It’s about having the mindset of being willing to … try things, knowing that many will fail,” she says. “But when you hit that experience that really resonates with the customer, then you have the ability to bring it to life.”