Dedicated digital fulfillment centers are an important aspect of Kroger’s seamless customer experience strategy.
The Kroger Co. is building an omnichannel enterprise with the goal of connecting the customer experience across all touchpoints.
In a presentation at the Groceryshop 2022 conference in Las Vegas, Yael Cosset, CIO and senior VP, Kroger, explained the details of the seamless customer experience strategy America’s largest grocer is following.
"We know our customers have different needs based on their daily lives and the question becomes: What, when and how? Our seamless ecosystem brings all of these factors together, without asking the customer to compromise on quality, value or convenience," said Cosset. "Whether our customer shops for a last-minute dinner, their weekly shop, freshest ingredients at the right price, we provide relevant and personalized experience."
According to Cosset, customers are shifting away from shopping habits they established during the peak of the COVID-19 pandemic, when they would shop for groceries in bulk online. Instead, Kroger data indicates customers are using home delivery, in-store delivery and visits to the brick-and-mortar store to fulfill daily shopping needs.
In response, he said Kroger seeks to enable consumers to transition from one omnichannel option to another as seamlessly as possible. The retailer is optimizing what it intends to be a seamless ecosystem that includes stores and dedicated digital fulfillment facilities.
Cosset views the seamless digital ecosystem as critical to customer satisfaction, combining the proximity of Kroger stores for immediate delivery in as little as 30 minutes. This fast delivery model is based on a partnership between Kroger and U.K.-based online grocer Ocado Group.
Introduced in 2018, the partnership leverages a fast delivery “hub and spoke” model relying on a leading-edge automated warehouse concept known as a customer fulfillment center (CFC).
The CFC model combines vertical integration, machine learning, and robotics with affordable and fast delivery service for fresh food. CFC facilities leverage proprietary technology solutions focused on artificial intelligence (AI) and advanced robotics and automation to create more seamless and efficient fulfillment, picking and delivery capabilities for enhanced digital commerce.
Kroger currently operates customer fulfillment centers in Monroe, Ohio; Groveland, Fla.; Forest Park, Ga. (Atlanta); Pleasant Prairie, Wis., and Dallas. The company plans additional customer fulfillment centers in California; Frederick, Md.; Phoenix; Romulus, Mich. (Detroit); Cleveland; Charlotte, N.C.; Aurora, Colo. (Denver); as well as South Florida and the Northeast.
In addition, Cosset said customer reaction to Boost by Kroger, the grocer’s new paid membership program, has been positive. According to Cosset, Boost by Kroger membership and the expansion of Kroger’s fast delivery network contributed to the company growing digital sales 8% year-over-year in the second quarter of fiscal 2022.
Cosset also said he sees the food-at-home trend persisting, with customers wanting to share cooking skills learned during the COVID-19 pandemic and make meals at home as inflation continues affecting prices.
Based in Cincinnati, Kroger operates 2,800 stores under a variety of banners across the U.S., including Kroger, Fred Meyer, Ralphs, Dillons, Smith's, King Soopers, Fry's, QFC, City Market, Owen's, Jay C, Pay Less, Baker's, Gerbes, Harris Teeter, Pick 'n Save, Metro Market, and Mariano's.