Watch out, Amazon and Walmart – Kroger is coming

Dan Berthiaume
Senior Editor, Technology
Kroger's customer fulfillment center

Kroger may be positioning itself to become a major retail technology platform.

Already well-established as retail technology platforms, Amazon and Walmart have increasingly been pivoting into the grocery vertical. It looks like grocery giant Kroger is striking back by attempting to move into the broader retail tech space. 

Kroger has operated its 84.51° proprietary data center since 2015, parallel to the Walmart Labs and Amazon Lab 126 in-house innovation organizations. But here are three more recent examples of Kroger pushing into retail technology territory where Amazon and Walmart have already planted flags.

Online marketplaces
The most dramatic (and recent) step Kroger has taken into wider competition with Amazon and Walmart is the ongoing integration of digital marketplace platform Mirakl into its Kroger Ship ship-to-home program. The retailer will offer Kroger Ship customers an extended aisle with more than 50,000 additional products. 

Kroger Ship delivers private-label and center-aisle groceries, household essentials and bulk merchandise through third-party carriers. Additional goods will be offered across multiple categories, including natural and organic, international food, specialty items, housewares and toys. 

Kroger plans to officially launch its expanded third-party assortment in fall 2020. The company’s digital marketplace will still be significantly smaller than those offered by Amazon and Walmart, but this could be the start of something much bigger.

Digital advertising
The retail digital advertising marketplace is dominated by Amazon, Google, and Facebook/Instagram. However, Walmart has been expanding its in-house advertising offering this year with a new partner network and enhanced capabilities designed to increase advertiser access to Walmart shoppers and ability to measure results.

In the last few months, Kroger has followed suit with several programs intended to open its customer base to CPG advertisers. These include an offering that lets companies strategically target in-store customers at specific times with audio ads; a service to provide brand advertisers with closed-loop sales data from Kroger to leverage in campaigns across multiplatform media company Meredith’s portfolio of food and lifestyle properties; and integration of Kroger sales information with a shopper data program for CPG marketers from streaming TV platform Roku.

Kroger is not as far along in its evolution as a retail digital ad platform as Amazon or Walmart, but is definitely setting the framework for continued expansion in this potentially lucrative area.

Fast online fulfillment
In May 2018, Kroger entered into an exclusive partnership with U.K.-based online grocer Ocado that enables the supermarket giant to leverage the Ocado smart platform’s online ordering, automated fulfillment and home delivery capabilities. 

Specifically, Kroger is leveraging Ocado’s digital and robotics capabilities to automate and better manage warehouse operations, logistics and delivery route planning. As a result, the company has announced plans to develop at least nine state-of-the-art customer fulfillment centers (CFCs). 

CFCs will incorporate automation and artificial intelligence (AI) to expand Kroger’s products to a larger footprint with faster omnichannel delivery. Both Amazon and Walmart have been steadily reducing their delivery timetables (with unavoidable COVID-19 service interruptions), and Kroger is making a concerted effort to at least stay competitive.

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