Dive Brief:
- Kroger is enhancing its customer experience through a combination of in-store execution and convenience-focused delivery options, executives said during a Q2 2024 earnings call Thursday.
- The grocer saw a 33% year-over-year improvement in perfect orders, which are online orders filled without substitutions and within the promised time frame, according to CEO Rodney McMullen. Kroger invested in AI that lays out efficient routes for collecting and delivering orders, which helped the company offer pickup two hours after orders are placed at all stores.
- Store associates were key to fueling growth in the number of visits customers made to stores, according to McMullen. The company plans to continue investing in wages for its workers, who also help power Kroger’s faster order fulfillment efforts.
Dive Insight:
Kroger’s CX investments are being made as the company faces off with regulators. The Federal Trade Commission is looking to block the grocer’s planned merger with Albertsons, due to concerns about lack of competition. The companies said the deal will reduce costs for shoppers.
Customer experience improvements are helping Kroger expand its loyalty program membership, which provides Kroger access to customer data that can in turn fuel better personalization and long-term sales growth.
“By delivering a more consistent customer experience, we are moving customers up the loyalty ladder and positioning ourselves for long-term sales growth,” McMullen said during the call.
Kroger collects data and insights from its free Kroger Plus and paid Kroger Boost programs. This information is used to improve product recommendations and create more effective promotions, according to McMullen.
Kroger is encouraging households that check prices on the Kroger app or website to make orders through those channels, which builds loyalty, according to McMullen. The number of households using Kroger’s e-commerce services grew 14% in Q2 2024.
“Demand across our Kroger delivery network, which provides customers a premium shopping experience, continues to grow,” McMullen said during the call. “Customers tell us they love the convenience of on-time and refrigerated delivery right to their homes.”
Investments in customer experience are part of Kroger’s efforts to stay relevant with customers despite ever-growing competition from companies like Amazon, Costco and Walmart, according to McMullen.
The grocer plans to continue updating its services to keep up with changing customer expectations.
“We felt good about those changes that we've made, but we still need to continue to make them,” McMullen said during the call. “It's one of those things where, if you ever think you've figured it out, I would say that that's not good. You need to change.”
