Under competitive pressure from Amazon, Kroger is deepening its investment in the collection and leverage of customer data. This represents more than loyalty and rewards. Like Amazon and Walmart, Kroger wants to build a revenue stream by selling advertising to its suppliers. If you're a product manufacturer with items for sale at Amazon, Kroger and Walmart, those three companies are competing for your advertising budget. The store which can offer you the best return on your advertising will flourish, and that return is based on the ability of the store to capture and correctly analyze data about its customers.
We remember that not too long ago, Target got in trouble for sending diaper coupons to a household where the teenage daughter had not yet told her parents she was pregnant. What next?
Ad Exchanger: Why Kroger Wants to Be a Walled Garden--And Why It's an Uphill Battle, 2017-Dec-14 by James Hercher
The revelation that Kroger is developing a data-driven ad platform, Kroger Precision Marketing (KPM), to launch next year underscores how brick-and-mortars are trying to exert control over their data in the same manner as an ecommerce company. Yet the goal of a true brick-and-mortar walled garden is fraught with challenges.
For decades, retailers sold anonymized data to third-party aggregators, but most are beginning to pull back on that side revenue stream, said Sean Cheyney, VP of North American business development for the retail ad tech company Triad.
“Retailers are starting to see that open data model as them losing control of their most valuable assets,” he said.
Kroger has alerted agencies and tech vendors that campaigns with KPM must run through 84.51˚, a data and targeting business that the retailer purchased from Dunnhumby in 2015, according to three different retail ad tech companies that have been told of the update.