Dive Brief:

• Kroger has named DDB New York as its official agency of record, according to a news release. This is the first agency of record in the retailer's more than 130 year history.
• The agency will be responsible for "developing a refreshed, stronger brand identity" for Kroger, according to the release. It will also support Kroger's omnichannel evolution, which includes in-store shopping, pickup and delivery as well as Kroger Ship, the retailer's direct-to-consumer service. DDB's first project for Kroger is set to debut later this year.
• "Kroger and DDB will work together to cut through the 'sea of sameness' that has arisen in grocery retail advertising, thereby supporting our transformation as a company," Mandy Rassi, Kroger's head of brand building, said in the release.

Dive Insight:

DDB and Kroger have a couple key challenges facing them as they embark on this new advertising partnership. First is developing a message that will unify Kroger's many different brands while still making them feel locally relevant — an ambitious goal that Kroger, which has 2,761 stores across 17 banners, laid out in February when it began its search for an agency of record.

Another challenge the companies face is boosting digital engagement. In-store shopping remains Kroger's bread and butter, but it offers delivery and pickup at an increasing number of stores. Executives have talked up the value of digital shopping and how online consumers spend more money with the company overall. Kroger also wants to claim significant e-commerce loyalty as its high-tech Ocado fulfillment centers come online over the next few years, and as Walmart, Amazon and Target continue their push into e-grocery.

To win Kroger's business, DDB has already started developing ideas that address these challenges. Rassi told Adweek the firm's work with large brands like State Farm and McDonald's also boosted its appeal. DDB named a new president, as well as two chief creative officers last year.

Kroger's move to retain an agency of record makes it unique in the grocery world, which the retailer may see as an advantage over time. Other grocers, meanwhile, have shifted their marketing approaches with messaging that reflects intense industry competition and the rising prominence of young consumers.

Aldi, Raley's and Meijer are a few retailers that have recently developed new ad campaigns. BJ's Wholesale Club just put out a humorous ad featuring a character named Frank who trolls the company's savings.

When Kroger announced its search for an agency of record earlier this year, Rassi said the company was looking to get pushed out of its comfort zone. With sales stuck in neutral and future growth in question, a world-class advertising campaign could elevate Kroger's push into alternative investments, technology and product innovation.