How Data Affects Advertising

Earlier this year I had the opportunity to go with my mom to Brazil. She was invited to speak at an international conference on the grocery business. While we were there she also toured some of the top grocery chains in the country. The company she works for, Kroger, is a top grocery chain in the US and one of the world’s largest retailers.   Lynn Marmer, my mother, is Vice President of Corporate Affairs for The Kroger Company. She was the first female officer for the company.   But enough bragging about my mom, the point is, my mom spoke about a data analytics company called dunnhumby and how this company transformed how Kroger relates to its customers. .

About ten years ago Kroger was not doing too well. They were having a hard time lowering prices while still satisfying their shareholders. How was Kroger going to stay in business? Well, the CEO of the company, Dave Dillon, hired dunnhumby to gather data about its shoppers—what were they buying every week.  Dunnhumby analyzed Kroger’s extensive data on their customer’s shopping behavior.

After collecting data, the researchers and statisticians were able to see patterns in the shopping behavior of Kroger customers.  People in charge of marketing, came up with new ways for the company to market to consumers.  Most effective, the company began sending to customers personalized offers and coupons.  Everyone likes to save money when they shop in the grocery store.  But who needs a coupon for cat food if you have a dog?  With dunnhumby’s analytics and Kroger’s extensive customer data, personalized coupons were created.   Each of Kroger’s millions of households began to receive coupons for the item they buy—specifically targeted to them.

The rest is history.  Kroger is very successful today with strong sales, profits and growing customer loyalty.  And my Mom gets to spend some of those profits on supporting organizations in the communities where Kroger operations—local non-profit organizations that matter to Kroger customers.

So what’s next for Kroger?  How does it continue to grow its sales and loyalty?   One way is to use new media—especially digital.   After a few years Kroger customers downloaded their 1 millionth digital coupon.   Shopping lists on your phone?  Yep.    Kroger keeps inventing new ways to connect with customers.  Dunnhumby continues to be engaged in helping Kroger understand their customers and connect with them.

 

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