UNDERSTANDING CUSTOMER NEEDS

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Anissa Baldwin
6 years ago
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PRODUCTS Woolworths homeware offers shoppers stylish contemporary ranges of items for the home, enabling customers to select a look that suits their wants and needs at affordable prices.

1 WOOLWORTHS Woolworths is a respected retail chain that offers a selected range of clothing, homeware, food and financial services, all under its own brand name. Men, women and children s clothing is known for its exceptional quality and durability, and all items have labels that indicate materials used and country of manufacture. PRODUCTS Woolworths homeware offers shoppers stylish contemporary ranges of items for the home, enabling customers to select a look that suits their wants and needs at affordable prices. This includes kitchen and bathroomware, crockery and vases, sheeting, curtaining and, in a limited number of stores, furniture (see below). Their ranges are designed to co-ordinate and complement one another to provide a stylish and contemporary look that is still affordable. Recently, Woolworths has focused on broadening the range and improving quality of its homeware whilst keeping prices down through more strategic buying policies. In 2005, inspired by increasing interest in interior design, Woolworths introduced two dedicated food and homeware stores the Design Quarter in Fourways outside Johannesburg and Willowbridge in Tygervalley, Cape Town. These offer not only an extensive range of appealing and affordable home accessories and furniture, but also provide an innovative in-store experience with opportunities for massages and beauty treatments Free range and organic choices are on the increase in stores as Woolworths moves ahead on its good food journey. Organic foods are audited and certified by an independent body, and Woolworths in-house SANAS

accredited foods laboratory runs routine checks on all food products for microorganisms and pathogens that could potentially cause illness.

fruit and vegetables stay fresher longer.

2 accredited foods laboratory runs routine checks on all food products for microorganisms and pathogens that could potentially cause illness. The information found on every package of the company s food enables consumers to make informed choices about what they eat, and careful handling between the producer and the public ensures that fruit and vegetables stay fresher longer. Building on Woolworth s reputation as a respected and trusted South African retail brand, Woolworths financial services has become an important pillar of the business. Store card sales now make up about one third of total Woolworths sales, and customers can also apply for personal loans at Woolworths branches. Woolworth s core customer is discerning, loyal and not afraid to make her views known if her local store is not meeting expectations. Woolworths works hard to build long-term relationships with customers, listening to what they have to say and consistently providing the right product and service to meet their needs. Woolworths believes that consistent delivery against its brand values quality, innovation, value for money, integrity, service and energy is the way to earn this customer trust. UNDERSTANDING CUSTOMER NEEDS Some recent initiatives, including the World of Difference loyalty programme, are giving the business more information about what people are buying and when, and have increased Woolworths understanding of what customers are looking for. Product ranges can be tailored more effectively and they can provide customers with information which is more relevant to their needs and lifestyles. Woolworths World, a new customer publication, is targeted at Woolworths key customers providing them with news and information that will be of interest to them. PRODUCT AVAILABILITY Customers expect to find the right product, just where they need it and at the right time this remains one of Woolworths biggest challenges and a key focus for the business. Through a dedicated head office team, improvements are being made to planning and distribution systems and they believe that customers will soon start to find more of what they re looking for, in the right place at the right time. ENVIRONMENTAL CONCERNS Feedback from customers tells shows that they are concerned about the environment. Minimising the environmental impact of all products continues to be a key focus for the business and a critical success factor in all new product development.

SUPPORTING SA EDUCATION THROUGH MYSCHOOL The MySchool programme gives customers a chance to contribute to the development of education in South Africa and they encourage as many people as possible to

3 SUPPORTING SA EDUCATION THROUGH MYSCHOOL The MySchool programme gives customers a chance to contribute to the development of education in South Africa and they encourage as many people as possible to subscribe to it. Every time someone makes a purchase at Woolworths, and their MySchool card is swiped, a percentage of their total spend at Woolworths is donated to their nominated school. It is now even easier for people to contribute. There is no longer a separate MySchool card. Donations are now possible with the use of any of the three Woolworths cards World of Difference, Store card or Visa card. Through the programme, Woolworths presently contributes around R1m a month to South Africa s schools. SELLING FORMATS Driven by the varying customer needs, Woolworths has developed distinct selling formats, including full-line stores, stocking the complete Woolworths range, those with only clothing and home products, and Woolworths Food stores selling only Woolwoths food. These are complemented by the Engen Food stops, offering customers the convenience of shopping a limited Woolworths food offering, 24 hours a day at a convenient location. The new Woolworths Home and food stores in Johannesburg s Design Quarter and Cape Town s Willowbridge shopping centres have proven to be a successful combination shop and more locations are being sought for this format. The on-line channel, In the Bag, offers customers the convenience of shopping through fax, phone or the internet. IN-STORE EXPERIENCE Woolworths aims to provide a high level of customer service and is constantly seeking ways in which to enhance customers in-store experience. Recent developments include areas for beauty treatments and massages in a small number of our stores, the complete re-design of our beauty displays to make testing and sampling easier and more effective and, an increased focus on service throughout the chain. CONVENIENCE Statistics show that people are making shorter, more frequent visits to supermarkets and therefore need stores that are easy and quick to access. This need for convenience is the driving force behind Woolworths extremely active new store rollout programme. Between June 2005 and June 2006, Woolworths opened forty new

stores across South Africa and the programme continues, including two new stores in Soweto Jabulani Mall and Maponya Mall (due to open in late 2007).

4 stores across South Africa and the programme continues, including two new stores in Soweto Jabulani Mall and Maponya Mall (due to open in late 2007). For those customers who work full-time, opening hours in many stores have been significantly extended. In two stores, Woolworths will trial in-store pharmacies in 2007, bringing an even more convenient offering to customers. FRANCHISEES A number of Woolworths stores (more than 150) are run on a franchise basis. They are continuing to expand South African franchise stores in appropriate locations and formats. Over a third of the franchises are black-owned and they are focusing on increasing that proportion, in support of their commitment to helping to build successful BEE businesses and support South African entrepreneurs. SUPPLY CHAIN Woolworths supply chain operates a centralised distribution model covering all inbound logistics, the central distribution centres and their transport operations, as well as deliveries to stores. This centralised model is the core platform for supporting Woolworths ongoing growth. Woolworth s centralised distribution model provides clear competitive advantage simplifying distribution for suppliers (a single drop or pick up), simplifying deliveries to stores (again a single drop), lowering the cost to operate and improving control of the key aspects of logistics, for example, the cold chain, ultimately ensuring that product quality is of a consistently high standard. The model enables Woolworth s supply chain to deliver and sustain cost-effective availability of a wider product range in different store types across broad geographic locations (for example, full-line stores, food stand-alones and Engen Food Stop convenience stores). The total distribution units handled through Woolworth s distribution centres grew rapidly for the second successive year and resources in all distribution centres were expanded to cope with this growth. Supply chain management have focused on the end-to-end optimisation of the cost to supply and this focus is delivering results. Good productivity gains in labour and transport enabled Woolworths to reduce the distribution cost per unit in food despite the 33% increase in the cost of fuel in the past year.

5 As Woolworth s growth strategy demands the roll-out of new trading formats, new sourcing locations and new product types, so the supply chain and logistics operations are continually reviewed in order to provide the necessary support. The most significant operational challenge of 2007 was the 55 day national strike experienced by the Woolworths distribution team over the peak trade period in December. Service levels were maintained throughout the strike and customers needs were fully met during this critical trading period. The focus areas for the year (2007) were to bring on line the Midrand distribution centre in early 2007, to enable an effective and efficient import capability for all product types, and to lead an integrated project to improve availability across all product types and store locations. Environmental efficiencies and a focus on the social aspects of this new work environment remain key drivers of this programme. Planning has commenced for investment to increase capacity in Cape Town and Durban. Source: &

Matas FY/Q4 2016/17 Results

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