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Why Kroger’s Retail Media Business Puts the Customer First

retail media

Kroger Precision Marketing (KPM), the retail media business of Kroger powered by 84.51°, is taking its advertising platform in-house to improve the platform for brand partners, Kroger itself, and most importantly, shoppers. Kroger is leveraging grocery’s unique perks and its own data science expertise to forge its own path forward in the retail media network space.

Retail Media Drives Sales & Trend/Flavor Discoveries

No one knows Kroger customers as well as Kroger itself, and the retailer has already used this knowledge to drive great discovery experiences for its shoppers. A study of thousands of campaigns found that 75% of targeted on-site display impressions and clicks were from new-to-brand households, helping customers discover products they may not have otherwise seen.

“A lot of that goes to our roots as a data science company, and our ability to sift through the longitude of retail data that we have and the ability to put more relevant products and advertisements in front of our shoppers as they are exploring the site and researching various keywords,” said Dan Mayer, VP of Media Platform, KPM at 84.51. “Most of our top keyword searches are not branded — they’re generic searches. That allows our data science to really shine and to put forth new brands or new products that are just now coming online in a way that others can’t.”

This customer-centric design is at the core of KPM’s success. Mayer noted that the company has resisted offering competitive conquesting for advertisers in favor of delivering customers the products and brands that best suit their needs based on their histories. While this closes off some opportunities to sell campaigns to interested advertisers, it ensures that consumers have a top-notch experience when they shop with Kroger and helps build greater loyalty.

Preparing for More Retail Media

Other grocers with the resources to take their retail media network development in-house can benefit from the same approach. Developing your own system rather than relying on the tools and capabilities of other companies lets a grocer fine-tune their approach and their offerings to their needs to ensure the entire system works to deliver on their preferred value proposition.

“It’s really about the ability to control your own destiny,” Mayer added. “There are certainly a lot of great partners out there that can help accelerate some of the early days, which is the path that KPM took, but once you sort of get your legs underneath you and have built out the talent necessary (which we have done over the course of this initiative), you can start to put forward your own roadmap and focus on the things that you know are crucial to the future of the success of your retail media network.”

Even companies too small to build their own networks should pay attention to how Kroger and the rest of the market are developing. The retail media space has been rapidly evolving and Kroger’s next-generation system could set the stage for how these offerings will develop in the coming years.

“This new platform announcement is signaling the maturity of the retail media category,” said Brian Spencer, Marketing Director, KPM at 84.51, adding: 

“Only a few large national retailers really have the scale and the resources to in-house this much technology and capabilities, but I think it signals kind of a turning point in the retail media ecosystem.

“These large national retailers are going to be controlling their own destiny moving forward and really controlling and optimizing that consumer experience,” Spencer concluded.