Kroger’s retail media business is designed to maximize advertising effectiveness by responding to individual customer needs.
Chain Store Age recently spoke with Michael Schuh, VP, product strategy & innovation at Kroger Precision Marketing (KPM), a division of The Kroger Co. focused on connecting brand partners with shoppers. Schuh described KPM’s mission and how it uses data analytics to deliver relevant advertising that benefits both brands and customers.
“KPM was founded for the purpose of leveraging first-party data, combined with customer profiles, to make localized advertising more effective wherever it lives,” said Schuh. “Whether that is our proprietary app, or other channels such as Allrecipes (through a partnership with Meredith), Pinterest, or Roku connected TV.”
However, Schuh emphasized that KPM’s purpose is not to open up Kroger’s customer data as a “free for all,” but instead to make the money brands spend on digital advertising more effective.
“We use data relevancy to inspire customers in a more impactful way,” explained Schuh. “The customer wants to shop and find products to feed their family. We take ad exposure and localize it to scale, in-store or online.
Basing its targeting efforts on the principle of “right data, right ad, right customer,” KPM seeks to help brands understand the impact of an ad after customer exposure. This includes providing information such as after viewing an ad whether a customer made a purchase or spent more than they had before seeing the ad.
“Our intention is not to create more ads and chaos that customers don’t need,” stated Schuh. “We want to make the money brands spend more effective while reducing the clutter. KPM makes sure ads are relevant, based on what customer the buys and what might be relevant to them.”
According to Schuh, response from customers and brands has been positive. KPM works with 1,300 brands, and has been able to provide enhanced targeting effectiveness with appreciable sales lifts.
Schuh also touched on what he sees as the growing influence of social media as a customer engagement and sales channel.
While shoppers on social platforms such as Instagram now have the opportunity to directly make purchases of products such as apparel and footwear, Schuh said that functionality has not yet occurred in the grocery category. Nonetheless, KPM is ensuring it has an active presence on major social media networks.
“Social media plays a really important role,” he said. “It will continue to be a place people spend a lot of time. KPM displays content to customers looking for inspiration, so social media is an important part of our strategy. It gives us an opportunity to apply data and influence ads in a positive way due to their relevancy to the individual customer.”