Grocery chain Kroger’s foray into IoT highlights the opportunity marketers have to learn about how to personalize campaigns for the shopper’s benefit. Yes, it's beacons, not bacon we're talking about here. Make no mistake when it comes to applying IoT to improve operations; the savviest leader in that department is Kroger.
CIO reported last July that Kroger introduced beacons to monitor the temperature of its freezers. The beacons are meant to equip refrigerated containers with sensors that check temperatures every 30 minutes--instead of having employees manually check thermometers twice a day--and then alert store managers and facilities engineers if the mercury hits unsafe levels.
In addition, Mobile Commerce Daily reported on Kroger’s app that connects a grocery list to locations within a store, so that customers can find their items quickly and conveniently. The post also reports the use of consumer analytics to provide personalized offers.
Kroger's forays have positioned it as one of the sleeper retail technology stories over the past year, is because journalists and experts have directed a plethora of media attention on a potential new influence in grocery retail, Amazon.
Amazon's IoT devices are expected to grow its revenue: Alexa has challenged search engines in being a starting point to research information while Dash provides replenishment services for everyday consumer goods. Ideas such as those give Amazon the opportunity to gain the mindshare of the everyday consumer alongside other retailers such as Kroger.
Amazon also is likely to strengthen its grocery retail foray, Amazon Fresh. Bloomberg reports a letter from Bezo noting his interest in building the Amazon Fresh service’s market share.
But Kroger has been in a good position to give Amazon a run for the consumer’s money. It is highly regarded as a brand among its customers. In a list of supermarket brands called the Tempkin Customer Experience, Kroger tied for third with other well-known brands and just slightly behind direct competitors such as Publix.
Kroger’s beacons investment represents the key frontier for predictive analytics: improving efficiency in how a retailer provides its products and services. Supermarket inventory replenishment drives ongoing demand for truck deliveries. Thus, the operations of supermarkets offer a unique analytics opportunity because of the effort involved in establishing logistics that support customer demand. As customers have accepted e-commerce, the nature of retail logistics has grown more dynamic.
Plus the identifying of inventory allows predictive analytic to serve the customer better. Predictive analytics play a key role in advancing core business capacity. Grocery retail is ripe for experimentation – margins on products are thin, and competition has grown from unexpected entrants, namely Target, Wal-Mart, and, naturally, Amazon.
There can be misfires with consumers, such as the famous Target overreach in which a customer incidentally discovers his daughter’s pregnancy when he complains about the number of pregnancy coupons coming to his door.
But as Kroger has demonstrated through its app and beacon usage, the promise of delivering a more personalized experience offers too many benefits to be overlooked.
Probably the best lesson from an IoT perspective is that customer experience from within the supermarket will come forth with how services are linked. Amazon’s Dash is an example of relying upon a customer familiarity with products to drive interest in using a service. When Internet of Things is positioned as Internet of Your Things – with “Your” being the consumer – retailers can learn how to better serve the needs of the customers.
The best result from predictive analytics can lead to growing sales, reinforcing the integrity of a grocer’s brand, and its capability to defend against competitors.