Kroger’s AI shopping assistant has ads at launch

Last week, Kroger launched an AI assistant within the websites and mobile apps of most of its grocery banners, excluding Harris Teeter. The assistant was developed in partnership with Cooklist, an AI platform for grocers. Shoppers can use the assistant to plan meals, find recipes and build a cart around budgets or dietary needs., according to Kroger Precision Marketing — the grocer’s retail media business — which detailed the feature on its website Monday. For other assistants, this feature has typically been introduced later: Walmart, for example, announced advertising features for its Sparky shopping assistant in January, one year after the AI tool’s launch. It had been testing ads in Sparky since the fall. OpenAI began testing ads in ChatGPT in May, several years after its initial launch.

Advertisements may appear in Kroger’s AI assistant when it is building a list for shoppers, such as when consumers ask for back-to-school snack ideas. They appear alongside organic results and are labeled as sponsored content.

“For us, it’s really just about keeping up with the evolution of shopping and evolution of how people interact with retailers,” Brian Spencer, marketing director for Kroger Precision Marketing, told Modern Retail in an interview. “Consumers are already accustomed to seeing product listing ads across e-commerce sites, and they expect those PLAs to be relevant to what they’re looking for. It’s another mechanism to just get the right brands and products in front of consumers quickly.”

Showing up in the assistant requires no additional setup on behalf of advertisers, Spencer said; if they already have a product listing campaign running with Kroger Precision Marketing, they may show up in the AI assistant recommendations.

“It’s just a natural evolution to include product listing ads within the shopping assistant when it’s relevant to consumers,” Spencer said. “Obviously, a lot of the queries that people have with the shopping assistant are not necessarily generating a product list, and in those cases, people are not seeing a PLA. But when it makes sense, when it’s relevant to what they’re looking for, our PLAs will appear.”

Brands will be able to measure how campaigns perform when they are running within the shopping assistant, Spencer added.

Like with other retailers, advertising is a fast-growing segment of Kroger’s business. Kroger Precision Marketing’s profit grew more than 20% year over year in the first quarter, while Kroger’s e-commerce sales were up 19%, according to financial statements from the company.

“What sets us apart is the depth of our data,” newly appointed Kroger CEO Greg Foran said on the company’s first-quarter earnings call in June, adding that 95% of Kroger’s transactions are tied to a loyalty card. “That means we can measure actual purchase behavior, not just intent, and that’s increasingly valuable to brands and advertisers.”

“The fundamentals of this industry are moving in our direction,” Foran continued. “We operate the technology layer closest to the customer, giving us a distinct advantage in how we engage and monetize those relationships. As data and direct customer relationships become the most valuable currency in advertising, those with scale and trusted customer connections will be the long-term winners, and that gives us real confidence in our ability to lead.”