Woolworths in Australia has an ambition to evolve its business into a ‘food and everyday needs ecosystem’ and in the last week we have seen three big developments that will further facilitate it towards achieving this goal.
1. Purchase of controlling stake in data analytics firm Quantium
At the heart of every retail ecosystem is a huge amount of data that is generated from activities across physical and online retail, digital platforms, services, logistics, financial services and technology. Woolworths has therefore decided to increase its stake in Quantium from 47% to 75% via a AU$223m deal. This will see the retailer create a new business unit called Q-Retail that will provide dedicated focus on the Woolworths Group operation.
The move will further strengthen the retailer’s ability to use Quantium to analyse customer data across all elements of its evolving ecosystem business. It will allow the Woolworths to tap into the power of advanced analytics and new AI technology, drive business synergies and achieve new levels of shopper personalisation, as well as help the business continually improve.
Woolworths Group CEO, Brad Banducci, commented, “Advanced analytics is key to improving the experiences, ranges and services we provide to our customers and the support we provide to our teams and suppliers. The way we gather data, interpret it, and protect it, is becoming ever more important.” Quantium’s senior team will remain in place, while the business will also continue to operate in other sectors outside of retail.
2. Plans to launch a new marketplace platform later this year
Woolworths plans to launch an online marketplace that will initially offer an extended range of sister-brand Big W products as a pilot. To aid the launch, the retailer’s venture capital arm, W23, has made a multi-million dollar investment in Melbourne startup Marketplacer, which helps businesses set up their own online marketplaces. Although Woolworths will only have a minority stake in Marketplacer, it will allow the retailer to use its expertise to facilitate its launch.
Digital platforms, whether marketplaces or social media, are a key element of all retail ecosystems. The Woolworths marketplace will allow the retailer to sell its own inventory via the platform, as well as pick third party businesses to do so as well. It is understood that the marketplace will focus on ‘core everyday needs categories.’
W23 managing director, Ingrid Maes, commented, “W23 invests in innovative startups that accelerate our ecosystem strategy, and where long-term win-win partnerships are an inherent advantage for both parties.” In recent years W23 has invested in meal kit provider Marley Spoon, last mile provider Sherpa, digital healthcare incubator Eucalyptus, nutritional data experts Spoon Guru and website optimisation business Longtail UX.
Source: IGD Research
3. Implementation of new in-store cloud-based merchandising technology
Woolworths has partnered up with Cloud-based visual merchandising software provider One Door in a move that will help the retailer improve its store efficiency and experience for shoppers. The new deal will see the tech rolled out to 80 stores to start with, before a total estate roll out in 2022. A key element of retail ecosystems is technology that provide real time analysis of performance and helps operations continually improve. The solution will use AI cameras and software to assist with planogram compliance, promotional display set up and product availability, providing performance metrics at a store level.
The software can examine the size, floorplan and layout of individual stores and use shopper data to generate individual store plans. Staff can also upload photos, report issues, check merchandising compliance, as well as request additional stock, if required, through the system. The software is mobile-first and therefore can be used on digital devices, such as tablets. This will make it easy to use on the shop floor and ensure in-store issues can be resolved in a more timely manner.
Woolworths Group data and analytics general manager, Doug Frank, commented, “One Door allows us to simplify a critical and time intensive task, making life easier for in-store merchandisers and helping ensure our products are presented to customers the right way. As we continue to tailor and localise our range in different stores, it’s important we draw on the best technology to make it simpler for our stores to execute for our customers.”