Kroger Beauty and Personal Care

Strategy

7. 29. 2019

SITUATION &THE ASK

80% of Kroger shoppers don’t buy personal care products at Kroger.

What are the PC barriers and opportunities? The micro moments and macro trends? What are the best ways to connect with PC shoppers? Is Beauty a significant category to Kroger PC shoppers?

WHERE WE LOOKEDSecondary Research

WHERE BPC IS HEADED

“Kondo” your routine

One Product to Rule them All

41% of women are interested in using multipurpose beauty

products.

27% are interested in multi-benefit in shower

products.

Source: The Millennial Beauty Consumer-US-June 2019 Mintel, The Beauty Consumer- US-2018 Mintel

WHERE BPC IS HEADED

Just for Me

Customize or Bust

25% of women aged 18-34 would choose a retailer that offered customized products

49% of Millennial women are interested in trying

customized beauty products.

Source: The Millennial Beauty Consumer-US-June 2019 Mintel, The Beauty Consumer- US-2018 Mintel

MILLENNIAL KROGER SHOPPER

Appearance Conscious

Deal Seeking

Cause Driven

Goal Oriented

Persona

Megan is a woman whose shopping choices are motivated by convenience and family. In her group of friends she is considered the one who is always organized and thorough, while also having her moments of being stubborn.

She is not always careful with her money but she tries to be, a frequent shopper along with being an impulse buyer, she often shops when she's bored.

Whenever she needs a product, the internet is the first place she goes to research and look for the best price.

Swayed by coupons, saving money is important to her but getting good deals is an even bigger motivator.

She changes products often based upon value/price; not very brand loyal.

When PC and Beauty shopping she is looking to address specific issues ––ex: frizzy hair, or dry skin –– because she cares about how she looks to others and wants to be seen as attractive and young.

She buys her grocery items at Kroger however she doesn’t explore the store like she does at other retailers. This is making her miss out on Kroger's Beauty and Personal Care offerings.

Women: 54.9%

HH Income 40k+: 84%

Millennials (25-39): 45.9%

MEET MEGAN

Sources: SmarterHQ survey- Millennials: Where they shop, How they Shop, Why It Matters 2017 | Deloitte Global Millennial Survey 2019| Nielson Report The Future of Beauty | Simmons | Mintel | Kantar Retail

HOW DOES SHE SHOP

Millennials are straying away from center store shopping. Usually staying in the perimeter or going to only the aisles they the need to pick something up from.

Source: Kantar Retail Shopperscape February 2017

HOW DOES SHE SHOP

Which Aligns with the browsing behavior of Kroger Shoppers.

Source: Kantar Retail Shopperscape February 2016

WHERE ARE THEY SHOPPING• 83.3% of Kroger Shoppers buy their personal care items from other

retailers.• 35.2% of these shoppers are buying from Walmart.

WHY?

Kroger shoppers know Kroger offers better sales and promotions than other stores BUT they believe other retailers like Walmart and Target have better value (prices for the brands/quality), better quality products and a better selection.

Source: Kantar Retail Shopperscape Reports

SO SHE…A. Shops on the perimeter of the stores, only going through aisles

when there is an item she needs to grab.

B. Buys personal care items from other retailers because there is a perceived quality, value and variety difference.

She believes other retailers have more items for a better value and quality, and when she comes to shop for groceries at Kroger she doesn’t browse the BPC aisle unless there is a specific product she needs.

IT’S A CYCLE

Lack of awareness

false perception

BEAUTIFUL PROBLEM

Kroger shoppers don’t know they can buy their favorite BPC products during their grocery trips. How do we make shoppers aware of the variety of products we have available to suit their needs?

With a catalog of over 50 BPC brands, including staple

heritage brands like Dove, UL is positioned to meet

shoppers needs in a variety of categories.

With 20 years of personalization insights

from their loyalty program, KRO knows how to serve shoppers

anytime, anywhere better than other

retailers.

Values deals over price but price is still a big purchase motivator. Shoppers often buy

BPC from other retailers because of

perceived value difference.

SHOPPER

GET:

TO:

BY:

WE NEED TO

loyal Kroger shoppers

add BPC Products to their Kroger Grocery Trips

creating a platform that engages the shopper to purchase UL BPC products during their Kroger grocery trips

INSIGHT

She likes exploring and discovering new BPC products when shopping, but at Kroger she focuses on needs more than wants. How do we engage her to shift her perspective when shopping at Kroger.

STRATEGY

Create a platform that educates her on the variety of all Personal Care and Beauty items that Kroger offers.

Messages at the moments

she is thinking about PC and

Beauty items throughout her

day/week.

No matter what she needs

she will find the item at Kroger

Triggers:

Source: Beauty 360 HH Segmentation 84.51 | Simmons | Mintel

WHAT ARE HER NEEDS

Consumer Segments

Complexion

Affection

Hair

for Home

Premium

Potential

• Engaged with beauty

overall.

• Engages with beauty,

but concentrates on

haircare.

• Not engaged with

beauty. They have

the spending power

but purchase at a low

rate.

• 2% of Households

(417k)

• 3% of Households

(602k)

• 18% of Households

(3.3 M)

• 11% of Sales • 10% of Sales • 33% of Sales

• Higher Income • Price Sensitive • 7% of their trips to

Kroger contain

Beauty

• Family Focused • Family Focused

• Beauty Hunter:

Never satisfied with the

products they have, always

think they can find

something better.

• Hair Necessities:

Always changing

products depending on

specific hair needs and

seasonal conditions.

• Product Chaser:

Wants to be the first

to experience

products.

WHAT THEY CARE ABOUT Complexion Affection: Extensive beauty & skincare routines in the morning and evening. Mainly follows beauty & skincare influencers on social media.Example: Watches beauty routines before bed and plans to buy or sample

products seen in video.

Hair for Home: Minimal beauty and skincare routines. Changes haircare products to go along with the season. They pay attention to celebrity hairstyles and hair trends.Example: Keeps her eye on products that address her specific hair issues. Saw her favorite celebrity on the red carpet and looks up the hair products used to achieve look.

Premium Potential: They shop often and are more likely to pick up and experiment with new products while browsing in store. They like to say they have tried new items first and follow a mix of influencers online.Example: Reads blog about new skincare item, then sees it in store and buys it with groceries.

Morning

Routine

6a-8a

Commute

8a-9a

At-Work

9a-12p

Lunch

12p-1p

Back At Work

2p-5p

After Work

5p-7p

Dinner

7-8p

Personal Time

9-10p

Bedtime/

Personal Time

Get ready

PBC Routine

Takes note of household and personal items to repurchase

Get everyone out door

Catch up on news & emails

Short bursts of phone distractions

Longer period of phone use

Short bursts of phone distractions/planning for after work

Run errandsCan include:pick up kids

grocery trips

get togethers

Preparing Dinner

Clean Up

Can include:get kids ready for bed

prepare for next day

chores

Unwind

Get Ready for Bed

Night BPC Routine

• Facebook• Instagram• Twitter• Shopping List

App• News App• Weather App

• Facebook• Instagram• Twitter• Email • News App• Music App• Radio App• Reading

Online (books, blogs etc.)

• Facebook• Instagram• Twitter• Amazon• Kroger App• Shopping List

App• Email• Text Message• Blogs

• Facebook• Instagram• Twitter• Pinterest• Amazon• Shopping List

App• Text

Messages• Blogs

• Facebook• Instagram• Twitter• Pinterest• Amazon• Kroger App

(Pick Up)• Shopping List

App• Email• Coupon App• Blogs• Text

Messages

• Kroger App (Pickup)

• Shopping List App

• Coupon App• Text

Messages

• Facebook• Instagram• Twitter• Pinterest• Email• Text

Messages

• Facebook• Instagram• Twitter• YouTube• Email• Music App

• Facebook• Instagram• Twitter• Email• Television• Online

Streaming • YouTube• Blogs

A

C

T

I

O

N

S

T

O

U

C

H

P

O

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N

T

S

WHAT WE’VE GONE OVER

• Kroger shoppers come to Kroger to satisfy grocery needs not their BPC

wants.

• We have to create a platform that creates awareness of the Unilever

products to millennial Kroger shoppers.

• Kroger millennial shopper segments: complexion affection, hair for home

and premium potential all have different wants and specific engagement

patterns.

Thank You.

APPENDIX

Behavior & Attittudes (25-39 y/o Female Kroger Shoppers)

67% Children have a significant impact on the brands chosen.

33% Change brands often for the sake of variety.

51% Often use the Internet to help plan shopping trips

47% Buys things spur of the moment

26% Makes an effort to look attractive to people I am interested in.

24% It’s important to keep young looking.

39% Will spend whatever necessary to make self look younger.

Source: Simmons

How do you get information about beauty products? (by age)

Source: Simmons

Personal Care and Beauty Routines

• 75% of women wash their hair as part of their weekend, weekday routine and on special occasions.

• 46% use hairstyling products as part of their weekday routine

• 55% use hair appliances only on special occasions.

HAIRCARE

Source: The Beauty Consumer 2018 Report Mintel

Personal Care and Beauty Routines

• Only 17% of women follow a 3+ step skincare regimen during their weekday routine, while majority (39%) have a 1-2 step routine.

Skincare

Source: The Beauty Consumer 2018 Report Mintel

Personal Care and Beauty Routinesby Age

HAIRCARE

Source: The Beauty Consumer 2018 Report Mintel

Personal Care and Beauty Routinesby Age

SKINCARE

Source: The Beauty Consumer 2018 Report Mintel