Kroger Retail Strategy: Customers, Innovation & Relationships

Strategic Planning and Building Relationships

Kroger is one of the most successful large retailers when it comes to strategic planning and building customer relationships. The company has consistently demonstrated a willingness to adapt to meet the needs of consumers in a changing environment. Kroger Pickup — its online ordering service — allows customers to shop virtually and then collect their items without ever having to leave their car. Its Kroger Plus Card is another example of relationship building: it allows loyal customers to earn fuel points on purchases and save on select items.

The strategic planning required for online ordering was something Kroger had to begin developing years in advance, given the significant front-end and back-end work involved in building the necessary computer applications. That preparation paid off considerably when the coronavirus pandemic arrived in 2020 and many shoppers turned to Kroger's online ordering platform to obtain groceries without risking in-store exposure to COVID-19. Had Kroger been less forward-thinking, the platform would not have been designed, developed, and ready to deploy. Instead, Kroger anticipated that online ordering was the way of the future and took the necessary steps to deliver that capability to customers. Its loyalty program has further strengthened customer relationships by enabling shoppers to earn fuel points redeemable at Kroger gas stations. In these ways, Kroger has built lasting relationships with customers and demonstrated a clear capacity for future-oriented planning.

Three Actions to Enhance Customer Relationships

Kroger implemented a mandatory mask policy for all customers entering its stores in response to the coronavirus pandemic. While some customers were comfortable with this requirement, others objected strongly. Many shoppers wrote to Kroger's corporate office arguing that the policy violated their personal autonomy. From a customer relationship perspective, one action Kroger could take to enhance consumer relationships would be to allow customers to decide for themselves whether to wear a mask, rather than mandating compliance. The principle that "the customer is always right" is one Kroger has long benefited from, and applying that principle consistently — including during health crises — could help retain customers who feel alienated by top-down mandates.

A second step Kroger could take to enhance customer relationships would be to expand into home delivery. Competitors and platform services have already entered this space, and Kroger could offer a comparable service that allows people to receive their groceries without leaving home. Home delivery represents a growing convenience expectation in the digital age, and expanding this offering would help Kroger remain competitive in the years ahead.

A third way to strengthen customer relationships would be to further develop its organic and locally sourced food offerings. Organic and locally grown foods have grown steadily in popularity, and Kroger could establish its own farmer's market-style section within stores or as a standalone concept. This approach would create meaningful connections with local producers, growers, and consumers simultaneously — extending the community-oriented brand identity that many shoppers find appealing.

Nontraditional Forms of Retailing

Nontraditional forms of retailing that Kroger has pursued include online shopping and driverless delivery. Online shopping is a relatively recent addition to Kroger's customer offerings, while driverless delivery remains a work in progress as fully automated vehicle technology has not yet been commercially deployed at scale.

Two actions Kroger could take to capitalize on consumer trends in retailing are worth highlighting. First, Kroger could open dedicated farmer's market locations where locally sourced foods can be purchased directly by consumers. Traditional farmer's markets allow local growers and producers to bring items to shoppers without intermediaries, but they are often small, inconsistently located, and open on irregular schedules. A stable, conveniently located Kroger-operated venue for locally produced foods — bringing Kroger's operational quality and oversight to the format — could appeal strongly to consumers who value local sourcing. This would mirror what Kroger has already done with organic items under its Simple Truth label, extending that model into a new product category.

Second, Kroger could offer pre-packaged online grocery carts for customers who do not want to spend time selecting items themselves. With a single click, customers could have a cart assembled by local Kroger employees and delivered to their home — a service that could be branded as "No Hassle Shopping." This could also function as a subscription service, delivering the same items on a recurring basis for customers who prefer consistency. Subscription models are a major trend across retail — from razors to streaming platforms — and their application to grocery delivery represents a natural next step for the industry (Wagner, Pinto & Amorim).

Conclusion

Kroger has taken significant steps to address trends in the grocery retail marketplace through strategic planning and customer relationship building. It has been at the forefront of online grocery shopping and maintains a strong loyalty rewards system that benefits shoppers seeking savings and fuel points. Its mandatory mask policy, however, is a polarizing measure that risks driving away customers who feel the company is overstepping its role. Not all consumers perceive the COVID-19 health risk in the same way, and a policy that feels coercive to a portion of the customer base may cause lasting damage to those relationships. Looking ahead, Kroger's best opportunities lie in expanding delivery services, developing locally sourced food offerings, and exploring subscription-based grocery models — all of which align with where consumer expectations in grocery retail are heading.

Works Cited

Atkins, Kelly Green, Archana Kumar, and Youn-Kyung Kim. "Smart grocery shopper segments." Journal of International Consumer Marketing 28.1 (2016): 42–53.

Conlin, Ronald, and Alice Labban. "Clustering attitudes and behaviors of high/low involvement grocery shoppers." Journal of Food Products Marketing 25.6 (2019): 647–667.

Kroger IR. "Ownership."

Wagner, Laura, Catarina Pinto, and Pedro Amorim. "On the Value of Subscription Models for Online Grocery Retail." European Journal of Operational Research (2020).