Dive Brief:

• Kroger is looking for a creative agency of record (AOR) — the first in the grocer's history, according to Adweek. In the marketing world, AORs take on responsibility for all of the marketing services that a business might want. This typically includes brand strategy, interactive media, web development services, digital marketing and purchasing ad time on the company’s behalf.
• Kroger wants something fresh and innovative, Mandy Rassi, head of brand building at Kroger, told AdWeek. “[We are looking for an agency] that can come in and push us out of our comfort zone and help us transform this iconic brand in a way that’s true to our roots, but that is extremely relevant to customers in culture today,” she told the publication.
• Rassi also said Kroger wants to stay close to the work, meaning that while the AOR will have significant influence, it won’t necessarily have free rein over Kroger’s marketing makeover. Being able to communicate the brand’s deep history is of the utmost importance, she told Adweek.

Dive Insight:

With so many grocers updating their assortments, revamping their stores and overall building their brands, Kroger wants to stay ahead of the marketing arms race. The question is whether a creative agency will be able to wrangle all of the grocer's various initiatives into a unified message.

From connected stores to online shopping and private labels, Kroger is investing deeply in promising revenue opportunities beyond its conventional assortment. The company has organized its push under the name "Restock Kroger," which effectively communicates a desire for change to the business community. But the retailer's messaging to consumers needs to focus on the specific benefits of shopping its stores and websites. 

Most of Kroger's recent initiatives are aimed at efficiency, as consumers have less and less time to wander supermarket aisles looking for their items. Boosting efficiency for shoppers also helps brick-and-mortar stores compete with online retailers who lure hurried customers with the promise of getting the weekly shop done from the comfort of their own home and having the goods delivered right to their door.

Communicating efficiency, convenience and selection will be a key focus for Kroger. How can an agency do this in a way that's unique and also unified? That is the multimillion-dollar question.

With $122 billion in annual sales and an ad spend of nearly $80 million during the first nine months of 2018 alone, Kroger is a big fish for marketers. And with numerous regional brands and 2,765 supermarkets across 35 states, coming up with a fresh perspective and branding platform won’t be easy. 

In the marketing world, Kroger's agency request is something of an outlier. The AOR model was disrupted when digital media began to play a much bigger role in the advertising game. Suddenly, traditional advertising agencies had to learn a whole new approach to boosting clients’ business. It also created opportunities for new marketing companies to arise with expertise dedicated solely to generating social media content and operating on digital channels.

Kroger’s decision to seek a creative agency of record bucks the latest piecemeal approach. Since the digital disruption era, many businesses including Budweiser are now retaining agencies on a project-by-project basis to supplement their own in-house agencies. In 2018, 78% of businesses report having some form of an in-house marketing team, marking a 20% increase from 2013, according to Adweek. It’s made for steeper competition between agencies seeking projects and provided them with less control over the client’s overall branding and marketing strategies.