Dive Brief:
- This week, Kroger's Dip-branded clothing will officially hit stores, according to an announcement from Kroger. The new line will be available at 300 Fred Meyer and Kroger Marketplace stores throughout the U.S.
- The pieces are stylish and affordable, according to Kroger. More than 80% of items in the Dip brand cost $19 or less, and the collection includes clothing for men, women, juniors, kids, toddlers and babies.
- “Dip creates a new experience for our customers, focusing on a thoughtfully designed and curated collection that is simple, stylish and affordable,” said Christina Groth, Kroger's vice president of general merchandise. “During the product development process, we were intentional about creating a brand that's unique and resonates with our shoppers – and we believe we've done just that.”
Dive Insight:
While other major retailers such as Target, Costco and Walmart have long featured grocery departments alongside clothing and other household items, it’s unusual for a grocery store to make the reverse move. Last year, Heidi Klum launched a clothing line at Lidl, while Hy-Vee also sells clothes alongside groceries in some locations.
Kroger emphasizes the affordability and simplicity of Dip, which seems to line up with the needs of shoppers who are pressed for time and looking for convenience and good prices. Kroger has not gone into this process blindly, having leveraged insights from 84.51°, its data analytics firm, to help shape its strategy and design for the Dip brand. This should, in theory, set Kroger up for success.
As far as timing goes, fall is a smart choice. The launch of Dip coincides with the conclusion of New York Fashion Week, which may catch the eyes of fashion-forward shoppers. Parents may also be looking to supplement back-to-school clothes as the school year gets underway, and the weather is starting to cool in many markets, so shoppers may be primed to grab a new sweater or a few clothing essentials.
Consumer reaction to the new brand will be particularly interesting, especially for those shoppers in Kroger Marketplace format stores. It’s unlikely that the success of the clothing brand will make or break Kroger, but it certainly would be a major win if it sticks. A positive response to Dip would cast Kroger as an innovator, with other grocers likely trying to replicate the strategy.
One wonders what direction Kroger sees itself going in terms of the in-store experience it is offering. Will it begin to look like a Fred Meyer with groceries, or something totally new? Is the clothing line intended to add to the shopper experience, or is it a revenue stream? The profit margins for clothing are much higher than groceries, and after disappointing reactions to earnings last week and ongoing performance pressure, Kroger may indeed need a revenue booster.
This move seems to be more of a competitive play to align with Walmart or Costco than Amazon, but since Kroger seems to be competing across the board with major retailers both online and brick-and-mortar, it’s tough to say what Dip's ultimate purpose may be.
