Kroger has substantially grown its digital business, the mega grocer says. In fact, in Q1 2017 the company enjoyed a 30-percent increase in new digital customers and more than a 30-percent increase in digital visits.
“Our digital revenue more than doubled in the first quarter compared to last year,” said Michael Schlotman, EVP and CFO of Kroger on a recent earnings call with analysts. While digital revenue continue to increase, gross margin is down and operating costs were up for Q1 2017. The grocer is making deliberate and targeted investments in the user experience and is willing to accept these minor short-term financial setbacks.
One key area where Kroger is investing heavily is the personalized offers and tailored pricing it is able to offer its loyal shoppers through My Magazine. My Magazine is a marketing vehicle that delivers personalized content like recipes to consumers based on their shopping behavior and interests.
In Q1 alone Kroger delivered more than six million unique My Magazine offers. “This allows us to offer personalized lower prices to our loyal households in addition to the low prices everyone can see,” said Rodney McMullen, chairman and CEO, Kroger. “This is an example of how we leverage 84.51°’s expertise.
“Our average customer only has to drive a mile to get one of our stores. So it's using that personalization to connect with the customer directly on a one-on-one basis.”
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