Digital's promise

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Digital's promise

By Stuart Aiken - 11/20/2017

As our world continues to be increasingly disconnected and fragmented, technology can act as an enabler. The ability for grocery retail to seamlessly connect the physical store with the digital world is taking us places we’ve never been. The digital channel provides the unprecedented ability to connect with customers, particularly a mass segment of customers who are price-sensitive and budget-conscious; and to anticipate customer needs rather than reacting to them. We are in the unique position to do good for all; making a difference towards better nutrition, better health and the overall well-being of people.

Through the totality of the customer experience, a grocery retailer can be a trusted friend to the customer — someone who knows them, understands them and is there to help them save time and money; to provide inspiration; and to be someone that they can count on. Digital is helping us move towards knowing and understanding the customer at an individual level vs. only the household level, and to meet individual needs at scale. Through data and science, we can understand individual and family preferences to provide recipes and meal planning based on taste profiles, behaviors and leverage products that are on special or offer coupons on items needed for those meals — all within a budget. A couple, for example, who both work in retail jobs for the schedule flexibility and to pay the bills, with two school-aged children in Cincinnati, need to be careful about their budget, but also need easy-to-prepare meals that are suited for their kids who have specific tastes. Kroger can provide customized meal solutions by understanding personal preferences, saving them time, money and ultimately help them in providing meals the entire family can enjoy. This level of personalization quickly and easily provides a solid meal plan, a shopping list — helping the customer to save time and to nurture themselves and their families.

For the most budget-focused customers, data tells us that they tend to plan intently via multiple channels to ensure they can balance their family’s meal needs within their budget. There’s considerable opportunity to streamline this planning process with digital to help customers be confident they’ll stay on budget on their shopping trip. And for those customers that are considered most at-risk of being food insecure, digital is an innovation lever that can truly make a difference — particularly when aligned with Kroger’s Zero Hunger | Zero Waste plan, with the goal to end hunger in local communities by 2025. This is an effort that the grocery retail industry as a whole can support.

Digital personalization, when deployed with purpose, has the opportunity to fundamentally change how customers shop for groceries and feed their families. Digital creates new data streams that can simplify shopper list-making and deepen relationships between retailer and customer. Grocery retail must begin to pivot its focus on the human rather than the product, and towards the impact it can have on individuals and families. This human-centered view considers budgeting and savings, desired health outcomes, and food goals/preferences. There are more forward-thinking aspirational capabilities that may not yet exist, and as an industry we can uncover those through being more in touch with the customer, and by encouraging the customer to share more of what matters to them so that we, in turn, can create something more meaningful for them.

While the penetration of e-commerce in grocery retail is a small percentage currently, this will continue to grow and customer needs will fuel new expectations on experiences. Customers are already realizing savings and convenience opportunities through subscription services in replenishment. As more shoppers engage in ClickList pick-up through Kroger for everyday items, the store needs to transform into an inspirational space for meal planning. And grocery retail must understand that digitally-based delivery services should be accessible to all customers, regardless of income. In the current landscape, services like Amazon Prime, InstaCart and others present a barrier to customers who are on limited or fixed incomes, due to their fee structures. A single mother with five children (including one child who is significantly disabled) in Minneapolis, all take a bus to their local grocer because the mother is committed to serving a hot dinner for her family — this is where ClickList, an on-demand, nominal fee-based model, could be incredibly beneficial, and could truly make a difference in this family’s life. Then there is the slice of the U.S population, who work potentially multiple jobs just to make ends meet and have the same aspirations as we all do, but who cannot afford higher point of entry convenience services.

The more data and technology advances in grocery retail, the greater the levels of personalization can become. Digital enables both the greater capture of individual consumer needs and the channels to fulfill a truly personal experience that is individualized. As the technology becomes more advanced, and grocery retail capitalizes on these advances to shape more complete experiences for consumers, we can also seek to democratize access to convenience, making lives easier for all customers. RL

Stuart Aitken is CEO of 84.51°, the wholly-owned insights and analytics subsidiary of The Kroger Co., where he leads a team of 700 people and also serves on the Kroger Board of Directors.