What Can Kroger Teach Us About Long Term Growth?

If you live anywhere inland from the two coasts, chances are that you buy your groceries at Kroger, America’s second largest retailer—which is catching up quickly to the number one retailer, Wal-Mart. The company has experienced a century of consistent and rapid growth due to one integral tactic: Kroger is a master at using data to drive sales.

In the 1930s they were the first grocery chain to test foods on customers and closely monitor quality. In the 1970s they became the first grocery chain to formally deploy consumer research. Kroger subsequently acquired dozens upon dozens of smaller retailers, now making them the fifth largest retailer in the world.

Rather than relying on demographics, which assumes data based on the combination of other data—for example, that all families with 2 children under the age of 10 in a certain neighborhood will purchase individually boxed cereals—Kroger sticks to the data itself. This is because the exact buying trends of individual customers cannot be inferred, but only observed. Perhaps one of those families in the same demographic prefers to eat healthy, opting away from sugary cereals, while another is more price-sensitive and only buys in bulk. There is no guarantee that buyers will respond to the products we assume they will purchase. Thus, there is a higher chance that the resources poured into research, coupons, and email-marketing campaigns will have been wasted. The only guarantee is that customers will continue to buy the specific products that you consistently provide at the same quality level and frequency.

Instead of using demographics, Kroger contracts a customer data specialist to create a unique profile for every customer’s shopping preferences: Do they shop organic or inorganic? Are their choices made for the sake of health or convenience? Do they buy generic or name brand products? No two are alike—and no one is tracked for just a couple of purchases. They are tracked for years.

This type of data helps ensure that costumers will consistently return to Kroger by enabling email-marketing campaigns and tailored coupon packages.

The trade show version of this practice of tracking would be Market View, which enables businesses to closely track their costs and audience responses over time, building unique, comprehensive bodies of knowledge, like consumer preferences and frequency of purchases. Such knowledge, when carefully observed and integrated with other factors can be highly effective in predicting future tradeshow performance.

The lesson we can take from Kroger and apply to trade shows is thus that learning the past is essential to business growth. Using the correct tools, such as we should be tracking past performances and then using that information to focus the future. Of course the real story is not about the technology itself, but the way we use it to achieve a level of transparency and understanding.