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Kroger Launches Direct-to-Customer Online Grocery Platform

Kroger Launches Direct-to-Customer Online Grocery Platform

Kroger launches ship-to-customer service. (PRNewsfoto/The Kroger Co.)

Grocery giant Kroger is set to launch their new direct-to-customer online grocery delivery platform, Kroger Ship. The program will initially be available in four markets: Cincinnati, Houston, Louisville and Nashville.

“Kroger Ship is our next step in creating a seamless experience that allows our customers to shop when and how they want,” said Yael Cosset, Kroger’s chief digital officer. “Our new service is just one more way we are redefining the customer experience as part of Restock Kroger, bringing more convenience and options to shoppers across America. Kroger Ship complements and joins our 2,800 grocery stores, 1,250 curbside pickup locations, and delivery service from 1,200 locations.”

After the initial launch, the retailer plans on expanding the service to additional markets. Kroger Ship will offer consumers a curated selection of 4,500 Our Brands products, which are not available anywhere else online, along with over 50,000 center-aisle groceries and household items that were influenced by Kroger’s subsidiary market research company, 84.51⁰.

The service offers free shipping for orders over $35, otherwise, the shipping charge is $4.99. However, Kroger is offering free shipping with no minimum purchase and 15 percent off first-time orders during the launch phase. According to the company, Kroger Ship offers exclusive money-saving deals and promo codes along with a set-and-save subscription model.

“Kroger Ship brings together the best of our digital, technology, logistics, 84.51°, merchandising, and Our Brands teams to deliver our customers convenient and curated food inspiration,” added Cosset. “Kroger’s e-commerce platform expands our offering beyond the physical store to include even more products. Along with staples and customer favorites, Kroger Ship will carry bulk and additional sizes, and focus on Our Brands, local and international food and flavors, specialty items, and health and wellness products – making it easier than ever before to be your family’s hero at mealtime, or anytime.”

Kroger has been quite meticulous with the rollout of this new program as the retailer plans to take on major players in the online grocery business such as Amazon and Walmart. In May, the retailer announced their partnership with Ocado, a British e-commerce company, to accelerate and improve their online shopping services. The exclusive partnership allows Kroger to have access to the Ocado Smart Platform which offers online ordering, automated fulfillment centers and home delivery capabilities. More recently, Kroger publicised their partnership with Nuro, a California-based robotics company, to use self-driving cars for delivering online orders. Both of these investments seem to lead up to this recent launch.

However, Amazon still stands strong as a competitor with $2 billion in online grocery sales last year. This might be why Kroger is setting up a similar e-commerce platform with their set-and-save subscription model that allows customers to save and reorder their favorite purchases. Kroger’s partnership with Ocado allows the retailer to stay on-par with Amazon’s automated fulfillment centers as well. Walmart has also invested in self-driving cars for online orders, however, their service drives customers directly to stores and back. Kroger has an advantage over Walmart’s service as their self-driving cars deliver groceries directly to customers.

After their announcement on Wednesday morning, Kroger’s shares went up by about one percent in premarket trading. So far this year, the retailer’s shares went up by more than five percent to a trade value of $29. So, it seems that the retailer’s efforts are paying off.

“With the support of Our Brands, and Kroger’s manufacturers and suppliers, our vision is to build a seamless e-commerce system that offers our customers an ever-growing number of products and allows Kroger to ship nationwide, serving America through food inspiration and uplift,” said Frank Bruni, vice president of supply chain and procurement at Kroger.