Dive Brief:
- Kroger has used Vitacost.com, a leading online retailer of health and wellness products acquired by the grocer in 2014, to enhance its technology expertise and provide it with a platform for fulfilling home delivery of online orders — an area of increasing importance for supermarket chains facing competition from Amazon and other companies, according to Retail Leader.
- Vitacost, with more than 1,000 products ranging from vitamin D and fish oil to probiotics and herbal, has earned top awards in the ConsumerLab.com survey of vitamin and supplement users.
- "Kroger is focused on improving and expanding our digital offerings every day so customers can engage and shop with us for anything, anytime, anywhere – while enjoying unparalleled product quality and experience across the board," Yael Cosset, Kroger's group vice president and chief digital officer, told Retail Leader.
Dive Insight:
Kroger has leveraged its $280 million Vitacost.com investment into greater sales of something other than groceries, and borrowed the technology to enhance its online grocery ordering. At a time when more supermarkets are looking to provide consumers with something different, this was a savvy move on the part of the company.
Delivery and e-commerce have been areas of increasing importance for retailers amid burgeoning competition from Amazon and meal-kit company Blue Apron. By investing in its own digital means for home delivery of online orders, Kroger is creating another avenue for sales. Kroger has not been afraid to get in the middle of changes taking place throughout the grocery industry, highlighted by its decision this month to offer Prep + Pared meal kits at four of its Cincinnati stores.
Health and wellness items has been a product segment on the rise in recent years, and Kroger was smart to tap into this area of growth as consumers take more interest in their health. The NEXT Forecast 2016 forecasts that sales of health and wellness products will expand 64% to $252 billion by 2019, which includes growth of 9% a year by new and emerging brands.
One thing analysts recommend to stores to help increase vitamin and nutritional product sales is to offer educational support so consumers can have a better idea of what they need and how they help. This could be done online with links to important information about the products.
It remains to be seen what Kroger's long-term plans are for Vitacost.com. Kroger could use in-store promotions or online offers to link its Vitacost site with its brick-and-mortar expertise. Vitacost.com already offers Kind granola bars, coconut oil, green tea and other healthy products. Kroger could continue to use Vitacost.com to focus on health and wellness by expanding its offering of these items, or use the platform to increase the grocer's online presence by selling others goods found in its stores.