The growth of digital technology and e-Commerce have become massive disruptions for the supermarket business. But the challenges are opportunities rather than hurdles. Customers are the winners with better shopping experiences. This article was first published in SCN’s 2021 Little Guns edition.

The rapid growth in online grocery demand has allowed us to reimagine the role of our stores in our e-commerce offering.

In the financial year 2021, e-Commerce sales make up about 8.5% of total sales at Woolworths as more and more customers choose e-Commerce services to reclaim time in their busy lives. The popularity only continues to grow. We recently reported a further 53% increase in e-Com sales in the first quarter accounting for 11.4% of total sales.

To keep pace with the accelerated customer demand, we’ve been investing in new online infrastructure in a range of different ways for many years. The benefits of these investments have never been more on display than during the past 18 months of the COVID pandemic.

We created a new team of Property e-Com specialists to focus and prioritise these opportunities. This team has combined skills in retail and property management and works alongside our WooliesX and Supermarkets teams to deliver best in class e-Commerce solutions in response to our customers’ shopping behaviour. With people capability, infrastructure and partnerships in place, we were able to scale up our digital operations rapidly, bringing forward plans that would ordinarily be rolled out over three years in a matter of months.

From a bricks-and-mortar perspective, the ability to repurpose and re-orient our stores to meet the rapid and changing needs of our customers has redefined the grocery shopping experience.

Technology drives great in-store experiences
Digital is fundamentally changing the way people shop and engage with us. Approximately 60% of our customers who shop in-store start their journey on our website or apps. In fact, we now have more than 15 million visits to our website and apps each week.

Customers use digital to research the latest specials in our catalogue, check for personalised specials on our Rewards app, search recipes and build meal plans, or navigate their local store with our sort-by-aisle shopping list feature in the Woolworths app.

For those customers short on time in our stores, the speed and convenience of Scan&Go technology has also proven very popular. Designed to make the in-store shopping experience simpler, faster and more convenient, Scan&Go allows customers to scan products on their smartphone as they shop, securely pay in the app, and scan a QR code at the dedicated Scan&Go lane to complete their shop. First trialled in our Double Bay store in 2019, Scan&Go is now available in 36 Woolworths stores across the country.

Scan&Go technology

It is no longer relevant to talk about online and in-store as two separate shopping channels because our customers don’t look at it this way. To them, it’s one brand, and whether it’s a digital or physical experience, they expect that the experience will be as seamless as possible.

Even as digital usage soars, our physical stores remain the cornerstone of our business. While the way customers interact in these settings will change over time, stores will continue to play a pivotal role in the way customers interact with our brands, products and services.

As such, it’s never been more important to provide our customers with personalised, connected and consistent journeys – whichever way they want to engage with us.

New ways to shop accelerated during COVID
During the COVID lockdown between July and September 2020, our online sales increased by 100%. This was achieved for the most part through our existing store network, where more than 80% of our online orders are fulfilled.

Our contactless ‘Direct to Boot’ service, which allows customers to collect their online grocery orders without leaving their car, has proven incredibly popular with customers. Customers simply order their groceries online, then when it’s ready to be picked up, they park their vehicle in a dedicated pick-up space and let the store know via their app when they have arrived. The customer’s groceries – which have been hand-picked by our personal shoppers in-store – will be packed directly into the boot of their car within minutes.

In the past 18 months, we have worked with our landlords to roll out 590 Direct to Boot pick up locations and 92 drive-through sites across Australia. Customers love the service, and it’s one of our fastest growing shopping methods.

In the first quarter of this financial year, we saw 38.5% of our e-Com sales generated from Pick Up orders – up 4.8% on the corresponding quarter in 2020. This shift from home delivery to Direct to Boot is ultimately a great outcome for shopping centre owners, as it encourages higher visitation, redefines customer habits and provides opportunities for customers to shop longer in their centres.

The contactless ‘Direct to Boot’ service allows customers to collect their online grocery order without leaving their car

Indeed, some of our shopping centre partners have seen visitation numbers increase where our Direct to Boot service has been rolled out.

Reimagining the future of our stores
With the continued growth of online shopping, we have also started to reimagine what the future of stores will look like. Just over 12 months ago, we started picking the first online orders for Melbourne customers from a newly built e-commerce floor located at the back of our existing supermarket at Carrum Downs.

In partnership with Takeoff Technologies, the 2,400m2 e-Store uses state-of-the-art technology to sort and move products from automated storage units directly to team members hand-picking customer orders. These units can hold up to 10,000 of the most in-demand grocery products, while fresh fruit and vegetables and meat will continue to be picked from the shop floor. The e-Store has created 170 new jobs.

Since opening Carrum Downs, we have opened a second site in Maroochydore in Queensland to boost home delivery capacity and service levels for our Sunshine Coast customers.

Woolworths eStore uses state-of-the-art technology

Combining a traditional bricks-and-mortar store with this state-of-the-art micro-fulfilment technology helps our teams provide faster and more flexible deliveries to our customers’ homes while helping reduce congestion in the aisles for our in-store customers.

We’re evolving the shape of our supermarket footprint, with all new and existing stores to have a dedicated e-Commerce area and Direct to Boot facilities for customers.

Creating better experiences together
There is a world of opportunity ahead of us to use digital to improve experiences for our customers. As our customers continue to look for faster, more convenient and flexible shopping options, we will continue to innovate and invest in new technology to ensure we’re meeting expectations and delivering a consistent and seamless experience.

We look forward to working together with our shopping centre partners to deliver the best possible grocery experience for our customers.