The online shopping fray, that is. Kroger just announced its new e-commerce and home delivery push, Kroger Ship, which puts it squarely in the competitive race with Amazon, Walmart, Target, and just about every other large US retailer.
Its offering is necessary but seems a bit late and may not be enough. Their prices are relatively low and no membership is required. Delivery speed of two days is decent. But Kroger Ship is based on its own brand and non-perishables only. Can this really compete against the others — and Amazon most of all? They need ‘delighters’ to break people’s Amazon habit, especially Prime members. Plus, Amazon keeps raising the bar.
While Kroger has to be online and offer home delivery (cost effectively, quickly, and easily), the real question is how they will differentiate. Kroger’s other recent moves are far more powerful. Restock Kroger, the company’s strategic plan to redefine the food and grocery customer experience, includes Kroger Ship but goes further. They also:
- launched a Culinary Innovation Center in Cincinnati, an R&D lab which will allow them to “accelerate product development for Our Brands, produce new recipes for Prep + Pared Meal Kits, explore new restaurant concepts, host food tastings and focus groups, and increase our associates’ culinary knowledge.” In addition, they acquired Home Chef to sell its meal kits in stores and online.
- took a stake in British online grocer Ocado Group PLC to run automated delivery warehouses and process digital orders and is working with electric-vehicle startup Nuro Inc. to test driverless grocery deliveries.
Now, these are innovations!
The move into meal kits and fresh prepared foods is a smart one – with much higher margins than the center-aisle goods it is selling through Kroger Ship. If Kroger can combine the insight into customer preferences it gains from the lab with the convenience of meal kits and home delivery, they’ll have a winning formula. They still face competition, particularly from Aldi who just announced its launch of a fresh food home delivery service, but they’ll have an edge with the lab.
The Ocado Group and Nuro deals are also smart. Automated delivery, driverless trucks, and seamless online ordering will help make Kroger a one-click auto-decision for consumers.
Couple these innovations with Kroger brand loyalty, local appeal, and personalization, and they could easily pull ahead of the pack.