Christine Foster, group vice president of commercial strategy and operations at Kroger Precision Marketing, talks about the benefits of grocery data, helping brands see all the way through the marketing funnel, and the scale of its loyalty data set.
Damian Fowler (00:00):
I'm Damian Fowler.
Ilyse Liffreing (00:01):
And I'm Ilyse Liffreing.
Damian Fowler (00:02):
And welcome to The Big Impression.
Ilyse Liffreing (00:09):
This week we're talking about something marketers love and sometimes struggle with data.
Damian Fowler (00:14):
We're joined by Christine Foster, group vice president of commercial strategy and operations from Kroger Precision Marketing.
Ilyse Liffreing (00:21):
Kroger knows what people actually put in their carts, which is a lot more useful than what they say they might buy.
Damian Fowler (00:27):
The question is, what do you do with that?
Ilyse Liffreing (00:29):
So today we're digging into how brands can turn shopper data into smarter media, better creative and real results. You have visibility into real purchase behavior at scale. How does that change the way you advise brands on creative messaging and timing? And is there maybe perhaps an example that you can point to?
Christine Foster (00:51):
Yeah. Brands are doing business right now in a rapidly changing consumer behavioral set. They are kind of up against thinking through how is that behavior changing and what do we do about it in real time. Things go viral in an instant and it can change how people shop. And so brands really need data signals that they can trust. And to your exact point, not just say what they are going to buy but actually did they buy and how many. We have a saying if you know the cart, you know the heart. The special thing about grocery data is that you are getting this visibility into purchase signals over rapidly. You're getting it over a time horizon. You are looking at things that are purchased across categories. Much of our carts are 15 plus items or more. That is a lot of data and a lot of behavioral signals for a brand to be using and making decisions off of.
(02:02):
These signals we really believe are really crucial for ad campaigns and being able to meet the audiences as their taste, literally their tastes change and as their lifestyle is changing. And I think that more than ever is how brands win. If you understand the things that you should be taking a key moment and moving towards it with an ad campaign, you're going to win the hearts and minds of consumers more fully than your competitors. And so this data is super powerful in enabling advertisers to do that.
Damian Fowler (02:42):
How are brands ... You talk about precision. How are brands leaning into the precision that you can offer?
Christine Foster (02:49):
Yeah, that's a great question. Well, our data has, like I said, a variety of different kind of behavioral views that you can cut, splice and dice and use for more precision targeting. Think about things like a lifestyle change in a consumer and maybe they are thinking differently about what they are buying more fresh products. Those kinds of signals are really powerful and enable in a completely privacy centric way.That's just buckets of audience data that allows you to get more granular into where is this audience going? How are they thinking about potential of your product? Where are there opportunity for you to intersect and kind of surprise and delight them? You can exclude category buyers and just focus on kind of a brand awareness and kind of a bigger opportunity to not just kind of retarget those same buyers that have already purchased because we know they have already purchased your brand, but who isn't purchasing your brand, but they purchase the brand next to you on the shelf.
(04:04):
Those are very clear signals that brand buyers should be using to think differently about how to use precision data.
Ilyse Liffreing (04:13):
What can Kroger really do with that data that other platforms basically can't?
Christine Foster (04:19):
Yeah. I think we would look at the ways that Kroger comes to market as a little bit different. And last year we pulled together our insights, our loyalty marketing, and our retail media services within Kroger together. And the reason we did that was so that we can help, again, back to the other question, which is how do we make sure we're not just retargeting the same people over and over? How do we make sure we're helping you expand your brand appetite in market with more and different customers that have maybe never bought? And what we see now in the market is that there's a lot of companies that monetize their websites, but the power of pulling together those insights and loyalty marketing and retail media services really enable us to meet the needs of advertisers differently, which then helps us as a retailer meet the needs of our customers.
(05:19):
And I think that's the special thing about retail media is that we are both serving the same customer.
(05:31):
We're not just helping you find impressions or on a website and not that there's anything wrong with that, but we care if that customer converts. It matters to us. And so I think there's a kind of skin in the game, if you will, on both sides, which makes it a really special space in the market. And it goes back to your question around closed loop, that's the power. We can actively see where something is or is not converting and help guide those brands back to different product innovation ideas, different marketing strategies, different perspectives on how they think about their customers and where their customers are actively changing.
Damian Fowler (06:13):
How do you think about the consumer journey from before that consumer steps into a Kroger? How far back do you track that?
Christine Foster (06:24):
Yeah. Well, we look at marketing as an omnichannel venture. And so for Kroger specifically, we have a suite of services and tools that allow brands to make decisions and to find opportunities with customers that are not on the Kroger website at that time. The partnership with the Trade Desk is a great example of that, helping reach that same audience all the way from where they're spending time out in the open internet or in specific kind of streaming inventory, let's say through when they maybe look and research a product on the Kroger website, but maybe they don't buy it then all the way to in the store. And maybe that's on a screen or maybe that's an opportunity with the digital offer in the store, but then when they actually make that purchase, we can then tie it back to an actual sale for them to see how did it play through the full funnel.
(07:23):
We talk a lot and advertising over the last couple of decades as digital has emerged has talked a lot about last touch attribution and thinking through how you follow the funnel. I think the special thing about what retail media brings to this conversation over the last, let's call it five to 10 years is the actualization of that dream and really helping brands se all the way through the funnel whether or not they're on the Kroger website or they get that inspiration offsite and then tie it back to an actual sale and say, "What worked about this and how do we do it again?" And oh, the lifestyles are changing of these consumers. How do we meet them now where they are?
Ilyse Liffreing (08:15):
When a campaign launches with Kroger, what are you watching most closely in those first few weeks to understand whether something's working or not?
Christine Foster (08:24):
It's a great question. Most optimizations today are happening automatically. We live in the age of AI. So our managed service is no exception and our partners are no exception. We are working with the most sophisticated media platforms in the world. So all of us are really working towards making that as seamless of an activity for media buyers as possible. Our managed service teams are using an AI powered bidding tool that we created in- house called PrecisionBid and that is continually refreshing bids against household level data. And so we can dynamically respond to the shifting shopper behaviors and the conditions in the market and really work towards whatever the objective of that campaign is. For example, if a campaign goal is to optimize against sales, then precision bid in partnership with our media platform partner, the Trade Desk, will ensure that ads are only shown to buyers that have the highest chance of converting.
(09:36):
And so that's a really special opportunity. And so to your point or to your question around what are we watching for a lot of this is becoming faster, easier, better, and media buyers should be and agencies and brands should be leaning into the power of the tools and technology right now that are going to help them really maximize their marketing budgets in a way that we maybe haven't in the past decade.
Damian Fowler (10:03):
In practice, how are brands actually using that data to optimize so it's not just a report on performance?
Christine Foster (10:10):
Yeah. 95% of Kroger transactions are connected to the Kroger loyalty card. That is incredibly important and powerful when you think about as a brand, when you think about which dataset you're going to use. It's the holy grail of how marketing budgets get decided, how we decide what worked, what didn't. And all of that ties back to our loyalty card data, which is one of the highest in the global market in terms of the fidelity.
Damian Fowler (10:45):
Can you give us a sense of the scale of that?
Christine Foster (10:46):
Yeah. We have views that 95% is connected to 60 million households in the US. So it's a huge data set and a lot of powerful insight into the American consumer.
Damian Fowler (11:03):
In general, are you seeing brands come to you with more upper funnel goals like awareness and consideration or do you still see the kind of lion's share of it being performance driven?
Christine Foster (11:13):
I think we're at a really special time where the recognition and the opportunity perceived with retail media is pivoting. We're at an inflection point and I think we're seeing way more upper frontal goals than let's call it four years ago come to us. So the thing that we're seeing more and more of when it comes to specifically tying to upper funnel is applying retail data to CTV campaigns specifically. And it allows these brand buyers, historically kind of like TV buyers to be more strategic about how you want to drive awareness and consideration, but also make sure it's tying in with that performance lower funnel plan and KPI so that you're not out on an island just kind of hoping and praying, but that you can go back to the CFO and partner with your performance level buyer teams and say, "Here's how these strategies that were distinct, we don't expect every CTV campaign to drive an immediate add to car click checkout, but you want to know that it did drive a sales somewhere down the line.
(12:27):
And so you can measure the lift of those campaigns with this data way better than you could in the past. And I think we're seeing that, which is exciting, having more of those conversations right now. I really, I think is a powerful opportunity for brands to maybe exclude loyal buyers. Maybe they are only reaching for new households with this campaign and in the past it would be this broad awareness and then you'd kind of hope that it tethered to your specific onsite or performance campaigns. And now you can put that data together and follow that course and that funnel all the way through to ensuring that it had the impact and then take that reality back to your CFO. I think as marketers in the past, we've kind of relied on these upper funnel kind of creative ideas and had struggled to connect the dots back to the bottom line.
(13:26):
And the powerful thing about commerce media and retail media is that we have the opportunity now to do that more fully than any time in marketing history, which is exciting.
Ilyse Liffreing (13:37):
That is exciting. Would you say there are any types of brands or categories that kind of lend themselves a little more to the value from retail media right now or are there any that are underutilizing the opportunity?
Christine Foster (13:53):
It's a great question for Kroger. The obvious answer is we work with a lot of CPGs. There's obvious benefit for CPG brand marketers and performance marketers to work directly with Kroger and they're getting a lot of data, a lot of value out of it and a lot of data because we're able to work in lockstep with the retail side of our business, which is the kind of closed loop opportunity. You can see how product moved on shelf very directly attached to the campaigns that you're running. The next phase for growth, and I would say the underutilized point of all of this would be for brands that aren't on that retailer shelf. And in our case, obviously in Kroger Shelves, brands that we don't sell because there is, again, going back to the power of the grocery data, it's such a reliable predictor of lifestyles and interest that we are starting to see interest in the utility of that data for that.
(14:58):
And so you may not be able to close loop it, but very directly back to the on- shelf movement if you're an automotive brand, let's say, but you can tie it more specifically and use that data set more specifically to your own performance metrics and your own KPIs. And we partner with brands all the time that are not on Kroger shelves to help figure out what is that measurement model? How do we prove this work? Because we know that the data set that we have is so powerful.
Ilyse Liffreing (15:32):
Are you getting any feedback from brand partners about what's working so far in the space or what might still feel challenging to them?
Christine Foster (15:41):
I think at the highest level, marketers are continuing to invest in retail media because we have the most reliable data in the market. In the media ecosystem, this is bar none kind of the best and I would say that's the broad statement about retail or commerce media. Obviously I'm very partial to Kroger, but again, back to the point of every marketer is now having to find a little bit of the data driven person inside of them and make sure that they are able to key in on financial results and prove bottom line value. I think that is definitely something that we're hearing really positive feedback. That said, I think there's an opportunity for a broader set of retail and commerce media companies to invest and join Kroger. We've partnered with the IAB on very transparent measurement methodologies. I think there has to be a level of transparency in this ecosystem and that brands need to continue to trust and believe in the power of this data.
(17:01):
And so we're excited to continue pushing down that path.
Damian Fowler (17:05):
Yeah. I mean, measurement has come up as a kind of sticking point because of the lack of transparency across the landscape. How do you think that problem might be kind of ... How might that problem evolve into a better scenario for everybody?
Christine Foster (17:24):
In partnership with governing bodies like the IAB, I think we can get there. So it's not about a one size fits all measurement. It is about being transparent and being open with how you are getting to results. And I think if we do that collectively as an industry, we're going to all be in a better spot for it. Yeah. It can't be a black
Damian Fowler (17:49):
Box. So how does Kroger think about transforming shopper data into something that actually drives meaningful brand storytelling so it's not just targeting?
Christine Foster (17:59):
It's a great question. And retail media at its core is all about growing business, building brands, not just retargeting existing customers, existing buyers, because it is in both of our best interests to capture new buyers, not just kind of share shift around. We want to grow the pie together. And I think that's the power of the utility in shopper data that actually connects brand storytelling all the way through to conversion.
Ilyse Liffreing (18:33):
Okay. So Christine, as more retailers build their own media networks, fragmentation is becoming a real issue. How do you see the ecosystem evolving? Is there going to be more consolidation or more specialization? How does that look?
Christine Foster (18:50):
I would say elimination to your exact call out, the ecosystem can't fully support all of the fragmentation that we see right now. And as an earlier call out, we see a lot of brands monetizing their sites, but it takes more than that to truly be a retail media network. And I think it takes investment. It isn't easy. You need data scientists, you need data engineers, you need a tech stack that's fully functional, you need great partners, you need an operations team, you need some sort of demand generation. This list goes on and on. Look, buyers can't sustain the ever expanding fragmentation, but the actual companies themselves can't sustain the investment that it will require. So I think you'll see some kind of dropout and look for different models. I also think you will see probably some level of consolidation, but it is important for any company looking to get into the commerce media space to really evaluate if it is worth the cost that it will take and investment it will take to build a best in class because brands already have a lot of great opportunities within the ecosystem and within the companies that exist and have stood up these really sophisticated networks already.
(20:20):
If you want to move into this space, I would recommend looking at how you can do that in a different approach.
Ilyse Liffreing (20:31):
For those marketers listening, what does it take to actually operationalize retail media internally? Is this like a budget shift, a team shift, a mindshift ... What was the third or a mindset shift tension? I
Christine Foster (20:45):
Would say it is a bit of all three. So there's a lot of reorging happening. There's a lot of recognition that the omnichannel strategies are the way to move. That takes coordination, that takes different teams working together differently, bringing together insights that maybe they haven't historically. And so I think that that all kind of lends itself to a mindset shift. If you don't have that mindset shift, you aren't going to be able to take the steps needed to pull together the budgets and teams and reorg in a way that's really going to kind of supercharge your overall strategy.
Damian Fowler (21:29):
And zooming out even more ... Excuse me. And zooming out even more, do you think that retail media will remain primarily a commerce driver and audience to this is, or can it truly become a brand building channel on a par with traditional media? I'm asking that as we enter upfronts.
Christine Foster (21:45):
But I'm not sure that traditional media can survive without some level of integration and foundational support from retailers. In a world where everyone's media consumption is driven by personalized algorithms and kind of how we engage with the world is so different today than it was. I think even the term traditional media is probably becoming outdated because media is itself evolving, right? The old mass media approach for marketers is not going to hit the mark anymore. And so I think retail media offers kind of the lily pad to jump to, if you will, and will serve as the foundation for the ecosystem moving forward. And maybe I should broaden that to commerce media will do that. And so as consumer behavior changes and not just from a shopping standpoint, but also from how they consume media, marketers are going to need some consistency and something to connect the dots all the way through.
(22:58):
So the playbook of old doesn't work anymore. Media is more personalized than ever and retail data can fuel that personalization across the entire funnel.
Ilyse Liffreing (23:07):
Well, we have some rapid fire hotsy questions for you now.
Christine Foster (23:12):
Okay.
Ilyse Liffreing (23:13):
What is one retail media tactic that sounds good in theory but maybe doesn't deliver in practice?
Christine Foster (23:20):
Anything that is invasive instead of inspirational. And I would say things that we test that maybe adds in a home on a refrigerator, which we've seen tested. I don't know that that's going to take off in the way that maybe some hope. We also saw a little bit of that with voice. I don't know that people loved jumping in on ads within certain voice boxes, if you will, or voice technology. But I think anything that comes across as invasive to the consumer journey is definitely not going to be long for this world.
Damian Fowler (24:04):
What's a trend in commerce or shopper marketing that you think is overhyped right now?
Christine Foster (24:08):
Oh, agentic. I couldn't leave this podcast without talking about this. It's going to be an important new modality, let's be clear. But I would say it's going to be in addition to the surfaces and ways people engage and shop. And I think there's a lot of data out there that would point in that direction. E-commerce is still growing and will continue to grow. Agentic will be a part of how it continues to grow, but people still want in- person experiences. And yes, there may be ratio shifts over time over the next couple of decades, let's call it, but the in- person experience is still going to be an important part of shopping.
Ilyse Liffreing (24:53):
Last one for you. If budget wasn't a constraint, what is one initiative or a capability you would invest in?
Christine Foster (25:02):
Well, Kroger isn't shy about investing in areas that work. So I'm not going to share my cards today on the areas that we're building, but stay tuned. I think good things are coming.
Damian Fowler (25:15):
If you could redesign the retail media model from scratch, is there anything you'd change?
Christine Foster (25:19):
The biggest problem for all media, not just retail, has been the overemphasis on CPMs instead of outcomes. If we had built on outcomes 30 years ago when digital took off, I think we'd be in a different spot than we are today. So I think that is part that we can redesign altogether.
Damian Fowler (25:43):
And that's it for this edition of The Big Impression.
Ilyse Liffreing (25:45):
This show is produced by Molten Heart. Our theme is by Love and Caliber and our associate producer is Sydney Cairns.
Damian Fowler (25:52):
And remember ...
Christine Foster (25:53):
Media is more personalized than ever and retail data can fuel that personalization across the entire firm.
Ilyse Liffreing (25:59):
And I'm Ilyse.
Damian Fowler (26:00):
And we'll see you next time.