Kroger's AI Shopping Assistant Includes Ads from the Start

Grocery giant Kroger has launched its new AI shopping assistant, which includes advertising features right out of the gate. This move follows a trend seen in competitors’ chatbots, where ad implementation often comes later in development.

The AI assistant is available on most of Kroger’s grocery banners’ websites and mobile apps, excluding Harris Teeter. The tool was developed in partnership with Cooklist, an AI platform designed for grocers. Shoppers can use the assistant to plan meals, find recipes, and build a cart around budgets or dietary needs.

The inclusion of product listing advertisements at launch is notable, as other assistants typically introduce this feature later on. For instance, Walmart’s Sparky shopping assistant didn’t get advertising features until January, one year after its initial release. OpenAI began testing ads in ChatGPT several years after its debut.

According to Kroger Precision Marketing, the grocer’s retail media business, advertisements may appear when the AI assistant is building a list for shoppers. This could be triggered by consumers asking for back-to-school snack ideas or other specific queries. The ads will be labeled as sponsored content and displayed alongside organic results.

In an interview with Modern Retail, Brian Spencer, marketing director for Kroger Precision Marketing, explained that including advertising features in the AI assistant is about keeping up with the evolution of shopping habits and consumer expectations. ‘Consumers are already accustomed to seeing product listing ads across e-commerce sites,’ he said. ‘They expect those PLAs to be relevant to what they’re looking for.’

Spencer noted that showing up in the assistant requires no additional setup on behalf of advertisers, as long as they have a product listing campaign running with Kroger Precision Marketing. This means brands can easily reach consumers through the AI shopping assistant without extra effort.

The inclusion of advertising features is just one aspect of Kroger’s growing focus on data-driven marketing and e-commerce sales. The company reported that its e-commerce sales were up 19% in the first quarter, while Kroger Precision Marketing saw a profit growth of over 20% year-over-year during the same period.

Kroger CEO Greg Foran highlighted the importance of having ‘the depth of our data’ to measure actual purchase behavior and not just intent. This allows brands to target their advertising efforts more effectively and gives Kroger a competitive edge in the market.

The company’s emphasis on leveraging its customer relationships and scale is paying off, as Foran noted that 95% of Kroger’s transactions are tied to a loyalty card. ‘That means we can measure actual purchase behavior,’ he said. This level of data analysis enables Kroger to engage with customers more effectively and monetize those relationships.

Foran also emphasized the long-term benefits of having trusted customer connections, stating that ‘those with scale and trusted customer connections will be the long-term winners.’ He expressed confidence in Kroger’s ability to lead in this area due to its unique position as a technology layer closest to the customer.