The news: Kroger’s AI Shopping Assistant launched with advertising functionality enabled from the start, showing an accelerated effort to narrow the AI and retail media gap with its main rivals.

The details: As of late July, Kroger Precision Marketing (KPM) clients can extend their sponsored listings into AI conversations.

• The format is automatically included when running a Search and Browse product listing ads (PLA) campaign—meaning advertisers don’t need to adjust their setups, bidding strategy, or take any other action to begin running ads in Kroger’s AI assistant.
• KPM’s report builder lets advertisers analyze AI assistant performance separately from other Search and Browse ad initiatives.

Implications for marketers: Kroger is moving faster to monetize its AI assistant than retailers like Amazon, Walmart, and Albertsons, which took some time to incorporate ads into their conversational search functions. That strategy could help strengthen KPM’s appeal to advertisers, especially those seeking low-cost ways to experiment with AI chatbot advertising and maximize AI-driven discovery. Because the assistant is tied to shoppers’ loyalty profiles, it could also enhance the value of the new ad format by enabling better targeting and measurement.

However, other considerations could hamper Kroger’s efforts to monetize its AI assistant. Success will ultimately depend on user adoption, which will require making the feature more visible and useful to shoppers. The assistant doesn’t currently store or remember past conversations, which may challenge Kroger’s ability to deliver a more personalized shopping experience and make advertising less effective. And including ads at launch may be detrimental to building user trust: Nearly two-thirds (63%) of US adults agree that having ads in AI search makes them trust the results less, according to an Ipsos survey.