Kroger's Bold Leap: Pioneering Digital Distribution of Weekly Ad Content

In a groundbreaking move that challenges industry norms, Kroger, the largest grocery retailer in the United States, recently announced its departure from print circular distribution, opting instead for a digital-first approach. This bold decision signifies a significant milestone for the grocery sector as retailers grapple with the daunting task of reevaluating traditional marketing channels in the face of rising print costs and challenges in weekly ad distribution.

With growing economic anxiety and inflation concerns only serving to increase consumer demand for promotional offering content, robust cross-channel promotional content distribution is crucial. Now more than ever, retailers and their brand partners must be perceived as delivering value to their customers. Those that succeed will find they can attract new consumers, exceeding revenue targets and enhancing their brand value. Real-world examples, such as Undertone’s recent collaboration with a regional grocery retailer, demonstrate the power of personalized, digital deal distribution in driving price perception while strengthening overall brand equity and delivering incremental store traffic.

While print has traditionally sat at the center of the grocery marketing ecosystem, consumers have diverse content preferences requiring a mix of formats and channels. Striking the proper balance between traditional and digital distribution allows retailers to implement true omnichannel promotional marketing strategies that resonate with multiple consumer segments.

The winners in this highly competitive space will be those retailers that balance print and digital strengths. While some consumers still prefer print circulars, the rising costs associated with print production and distribution make digital channels an attractive and cost-effective alternative. Meanwhile, a growing, digitally savvy majority expects more relevant, personalized messaging and offer content to be delivered across multiple digital touchpoints, including display, online video, CTV DOOH, and more.

A robust digital distribution strategy presents an opportunity to evolve the circular concept. By leveraging digital platforms, retailers can granularly target specific audiences, personalize content and offers on a near one-to-one basis, optimize across all touchpoints, drive omnichannel performance, and uncover unique insights into their customers' preferences and affinities. Furthermore, digital distribution expands the range of available offers beyond the physical limitations of the printed page, providing a greater variety of promotional opportunities.

As we look ahead, it’s clear that the future of retail advertising lies in the vast data being collected and shaped by artificial intelligence. This will be used for more sophisticated audience segmentation, precise targeting, and to inform more personalized messaging and offer curation. For example, retailers can align promotions to audience micro-segments to strategically capture market share from local competitors in shared trade areas. Or AI-powered dynamic pricing could display more compelling offers to prospective buyers, enhancing customer acquisition rates. Real-time optimization fueled by AI will continue to facilitate testing, learning and optimization, allowing retailers to adapt offers based on inventory, supply chain dynamics and other factors.

By recognizing the changing landscape and consumer preferences, Kroger sets an example for other retailers to follow suit.

Daniel Aks is the president at Undertone, a Perion company. Undertone is a provider of intelligent, high-impact advertising solutions across all platforms, screens and devices.