April 2014

Kroger has always been an innovator. It was the first store to combine meats and groceries under one roof, and the first grocery store to have its own bakery. Kroger pioneered the use of optical scanners in the checkout aisles and was one of the first grocery chains to open superstores, a move that has helped it weather competition from big box stores like Sam’s Club and Costco. That drive to innovate has helped make Kroger the nation’s largest grocery chain and the second largest retailer in the country after Walmart.

But, what has really driven Kroger’s recent success is its commitment to the customer experience, and particularly how well it has applied its customer loyalty program. Kroger launched its “Kroger Plus Card” program in 2003. In 2010, Kroger partnered with Shell gas stations allowing customers to redeem points earned on their Kroger Plus Cards for fuel. Well over two million customers use Kroger’s shopping app, which allows users to download coupons, sort coupons by relevance, sync coupons with their shopping lists, monitor their Kroger Plus reward points, and even refill prescriptions.

Last year, a study by Maritz Loyalty Marketing found that Kroger had the highest rated loyalty program in the grocery sector, with an overall satisfaction rate of eighty-three percent. In fact, ninety percent of register transactions are completed with a Kroger Plus card, and eighty-five percent of all United States households in markets where Kroger operates have a Kroger Plus card.

The Way I See It

  • As behemoths like Walmart and Amazon continue to gobble up market share – in everything from groceries to clothing to consumer electronics – I see more “traditional” retailers needing to double down on the customer experience in order to compete.
  • Successful competition is going to be increasingly dependent on maintaining an ongoing conversation with customers via the tools and channels they prefer, namely their mobile phones and social media.
  • Data – not just gathering it, but using it in novel and effective ways, and ways customers are comfortable with – may wind up being the biggest difference-maker for retailers.

The Way the Industry Sees It

I sat down with Natalie Ream, Vice President of Customer Communications & Marketing at Kroger to discuss customer service and customer loyalty programs as a way to differentiate.

What’s made your Kroger Plus program so successful? What have you been able to tap into about the way customers like to use these programs that your competitors haven’t?

Our Plus Card program is successful simply because of our ability to deliver real value, and to uphold the trust that our customers place in us as it relates to their shopper data.  Through our shopper card program we are able to capture and analyze shopping behavior, and then apply the insights we gather to create offers, discounts, and recommendations that are meaningful and relevant.  We are very careful to protect our shoppers’ data and their privacy.  Our customers have come to expect us to know them better, and they tell us that they look forward to hearing from us!

What’s the relationship between the Kroger shopping app and more traditional print coupons and circulars?  Will the app and social media eventually replace coupons delivered in the mail, by newspaper, or handed out at the checkout counter?

For more than ten years we have been perfecting our ability to deliver highly-relevant, personalized coupons for the products that our customers like and buy the most through our ‘Loyal Customer Mailings.’  We are now applying that expertise to the digital channel through our mobile app, which allows customers to sort digital coupons by relevance to them.  By applying real-time insight derived from their shopper profile, we can sort and deliver relevant offers based on what we know about a customer’s product preferences or lifestyle segment.  Because we have five generations of customers shopping with us – and because each generation and each customer is unique in terms of their preference for how we talk to them – our aim is to meet our customers and talk with them in the channel or channels that they prefer.

Continue Reading Kroger Gets Its Fuel from Customer Rewards

1896 was a big year – the first modern Olympic Games were held in Athens, Greece; the first x-ray was taken, and, of course, The ADVERTISING Club of New York was born. Located in the heart of Manhattan, The ADVERTISING Club is the industry’s premier venue for networking and creativity and professional development. As such, the club plays a vital role in cultivating advertising professionals of tomorrow and supporting the thought leaders of today.

While The ADVERTISING Club may be best known for the International Andy Awards, which recognize creativity and innovation in advertising around the world, it has garnered its most recent attention for its “I’mPART” initiative, which celebrates diversity within the advertising and marketing industry and works to recruit a wide variety of fresh young voices and talent to the business. That goal is embedded in last four letters of the name – Promote, Attract, Retain, and Train. I’mPART was recently featured in The New York Times, which celebrated I’mPART’s success in making the advertising industry more inclusive and more reflective of the diverse and increasingly global market it is trying to reach.

The Way I See It:

  • I see The ADVERTISING Club remaining an important pillar within the industry, and a symbiotic relationship forming between the older and younger generations. We will continue to see millennials mentoring the older generation on emerging technology and how to best implement it, and the older generation providing seasoned advice that only experience can provide.
  • I see The ADVERTISING Club playing a strong role in continuing change within the industry on the topic of diversity, not just from a race and ethnicity perspective, but a gender one as well.
  • I see The ADVERTISING Club paving the way for young people and creating a more inclusive industry.

The Way The Industry Sees It:

I sat down with Gina Grillo, President and Chief Executive Officer of The ADVERTISING Club of New York to discuss the impact the Club has on both the industry and the members.

The ADVERTISING Club (The AD Club) of New York has been engrained within the industry since 1896, and encompasses thousands of industry professionals. In terms of membership, have you seen members you’ve attracted at a young age stay active within the Club throughout the duration of their career? What’s the longevity trajectory like?

Our membership of four thousand strong includes many legacy members who joined The AD Club as young professionals and have grown up and progressed in their career with us over the years. While the industry focuses on recruiting new talent, we see retention as just as big of an issue and believe it is critical to nurture talent after they have entered the field. Part of our mission as an organization is to support members along their career journey – as they move up the ranks – keeping them active both within the industry and within The AD Club. We also have a Young Professionals group that is designed to help advertising, marketing, and media professionals ages thirty and under grow to become tomorrow’s leaders. It is truly inspiring to see this ambitious, philanthropic, and outgoing group of future industry leaders develop themselves as professionals and people.

It’s no secret that The ADVERTISING Club has a myriad of impressive initiatives. Are there any initiatives that the Club is especially proud of?

Advertising is about experimentation in communication. It is the business of inventing ideas to be discussed, debated, assessed, and adjusted daily. The AD Club exists to support this process through a number of initiatives around our core pillars – access, creativity, professional development, and diversity. We are proud of our efforts in all of these areas, but I am especially proud of our diversity initiative, i’mPART. It’s our belief that diversity of people, ideas, culture, and craft is a major driver of creativity and creates better work in our business. i’mPART is a fundraising effort that aims to raise awareness of the benefits of diversity and support the nation’s leading diversity programs.  i’mPART employs an acronym that represents the four pillars of the initiative – to Promote, Attract, Retain and Train diverse talent. It’s a movement to make diversity a priority and increase accountability for this issue through a ten-year-long benchmarking survey by PricewaterhouseCoopers (PwC), which will track the progress of diversity programs to ensure long-term success. We are committed to supporting diversity of thought and seek to inspire a diverse mindset in the advertising industry.

Continue Reading Creativity is Poppin’ in New York’s The ADVERTISING Club