Kroger's Nostalgic Strategy | Fast Five Shorts
In this week’s Omni Talk Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, and Quorso, A&M’s Joanna Rangarajan and Mohit Mohal joined Chris and Anne to discuss Kroger's decision to bring back paper coupons alongside their digital offerings. Our experts debate whether this move represents smart customer listening or a step backward, exploring the psychology of tangible deals and how this serves different customer segments. With 40% of consumers preferring paper coupons for their tangible feel, we analyze this surprising retail strategy!
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#Kroger #ecommerce #retailfulfillment #Coupons #Grocery
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Transcript
Kroger has brought back paper coupons.
Speaker A:According to the Street, Kroger has gone back to handing out coupon flyers while also offering digital deals.
Speaker A:The new paper coupons are released in stores on Wednesdays via a single sheet that includes all their digital coupons and specials with a single barcode.
Speaker A:Customers can simply grab a flyer and scan it at the self checkout or ask for help from one of our friendly clerks.
Speaker A:Kroger said.
Speaker A:Joanna, please make sense of this for me.
Speaker A:Do you agree with Kroger's decision to bring back paper coupons?
Speaker B:I do.
Speaker B:I do agree.
Speaker A:I do.
Speaker B:From Chris or it is.
Speaker B:It is.
Speaker B:I do.
Speaker B:I think this is less about paper making a comeback and more about Kroger recognizing, you know, the idea that a discount and a deal just, just feels more valuable when you can touch it.
Speaker B:You know, there's a, there's an element of that look, you know, 90% of U.S. customers say they want discounts.
Speaker B:40% prefer paper coupons because they feel real intangible.
Speaker B:So there are some folks, you know, behind this movement.
Speaker B:Although Kroger does have a very significant loyalty program.
Speaker B:I think they have about 90 million households signed up.
Speaker B:Just because you're part of that does not mean that that those digital coupons that you have access to are driving your shopping planning and the, and the paper planning and the ability to see that is still a very big part of the shopping map and in a very competitive market where value is really driving the intention.
Speaker B:I'm going to go to stop and shop for my meat.
Speaker B:I'm going to then go to shop right for my eggs.
Speaker B:I'm going to round it out at Wegmans for my produce.
Speaker B:You know, I need to know the deal exists and if I don't because it's only digital, then you risk not even having me in the store in the first place, making a stop there.
Speaker B:So I think this makes a lot of sense.
Speaker B:It seems like a no brainer to Kroger.
Speaker B:It's minimal cost to them to print these.
Speaker B:The promotions are through the manufacturer.
Speaker B:So there shouldn't be incremental funding that they're having to put behind it.
Speaker B:They're going to make the same margin on this and it demonstrates they're listening.
Speaker B:You know, we've, we're seeing, just listening to the customers and we've seen it more on the restaurant side recently.
Speaker B:Right.
Speaker B:But whether it's the cracker barrel logo or Starbucks announcing the Apple Crisp comeback at the end of the month, you know, brands are listening.
Speaker B:When consumers feel like there's a diminished experience for them, and that's what Kroger seems to be doing.
Speaker B:So I don't think it's a strategy backpedal, maybe a little of nostalgia, but I think it's just.
Speaker B:It's just wise business.
Speaker A:Joanna, do you think that they should be getting anything exchange?
Speaker A:I think that's my rub here.
Speaker A:Like, there's no loyalty card scan.
Speaker A:Like, why couldn't they do this with a loyalty card?
Speaker A:Like, so that they have some way to track this.
Speaker A:Because I know it's not a huge investment to print all of this, but it is an investment in the time it costs to still shoot that, to print it to, you know, and.
Speaker A:And the sustainability component that, you know, a lot of these retailers have goals that they're supposed to be trying to hit to eliminate paper waste, like creating.
Speaker A:Could they listen to their customers and get, like, the benefit out of this in another way?
Speaker A:Like, it's still a single barcode.
Speaker A:What are your thoughts on that?
Speaker B:They absolutely can.
Speaker B:But what stops them from doing something that's tried and true while they innovate on that, rather than delaying bringing it back?
Speaker B:So I think you're absolutely right on all the points that you made, but I think there's a way to do both.
Speaker A:Yeah.
Speaker A:Chris, you are a resounding hooray for this one.
Speaker C:Yeah, I put my arms up when.
Speaker A:She said, for those listening, not watching, tell us about your perspective here.
Speaker C:Well, I think, I think I agree with you, and I think the question you raised about loyalty is kind of a moot point because, one, if you're a digital loyalty user or that's how you tell the grocer that you're a loyalty member, you're not going to capture this audience with that anyway.
Speaker C:And then two, if you happen to be a loyalty card user and you scan it at the checkout, you're still, as a retailer or grocer, getting that information from the customer.
Speaker C:So.
Speaker C:So I don't really see that factoring in here.
Speaker C:I just like this for the reason Joanna said.
Speaker C:I actually, I actually think this is kind of innovative.
Speaker C:It's not sexy robotic innovation in a way, but it's a way about thinking, how do I do couponing differently in a way that works for my customers and is based on feedback.
Speaker C:So, like, you know, Joanna, you kind of touched on it.
Speaker C:But just to elaborate on it, like, being able to see all of the coupon or discounts on one page, in some ways is a better user experience than having to rifle through my mobile phone or my Desktop because you can see it all in one glance of the eye.
Speaker C:You have all your options at once.
Speaker C:So that is potentially valuable.
Speaker C:So, and I think, like, to Joanna's point, there's a segment of the customer base that's going to want this and you've given it to them.
Speaker C:I think actually personally, I would want it like if I just walked in the store and I could pick up the flyer and see what's on sale.
Speaker C:Yeah, I win on that side.
Speaker C:So, so I, that's why I think I like it.
Speaker C:It's innovative.
Speaker C:It's a different way to think about couponing.
Speaker C:It's not saying like we're going one way or the other.
Speaker C:It's new.
Speaker C:It's interesting to me.
Speaker A:Mohit, make some sense of the last.
Speaker A:You get the last word here.
Speaker A:Yeah, I mean, are you pro paper coupons?
Speaker D:Pro paper coupons.
Speaker D:The way, again, to elevate the conversation the way I would think about this, right?
Speaker D:There's probably three or four key consumer segments here, right.
Speaker D:We've all talked about a lot about convenience.
Speaker D:So, you know, at the other end you have that affluent customer who really doesn't care about the price or the delivery fee.
Speaker D:And convenience is more important for them as it relates to grocery.
Speaker D:At the second end of the spectrum is probably more digitally savvy loyalty app kind of consumers who are either physically going into the store or kind of placing an order through the app or through the platform.
Speaker D:But on the other extreme, which is a segment which we all know has grown just given the macroeconom challenges, is a consumer segment which is, you know, very frugal and really cares about deals.
Speaker D:Right.
Speaker D:And that is probably what Kroger has been seeing as they have probably analyzed their consumer data and probably a dip there.
Speaker D:So I personally am not a big fan of digital consumer digital coupons.
Speaker D:I like my stuff physical, little old school in, in that way.
Speaker D:So yeah, I think it's a step in the right direction.
Speaker A:I'm just going to make mine scan their keychain barcode, their Blockbuster keychain barcode, so I can at least get some data in exchange for that coupon printing.
