Woolworths’ cyber aisle push

Jeff Whalley
From: Herald Sun

September 17, 2011 12:00AM

THE fierce battle for market share between Australia’s supermarket titans is poised to spill into the digital realm as Woolworths ratchets up its online offering, heaping pressure on resurgent rival Coles.

Industry experts say online grocery retailing is finally set to penetrate the mass market as Australian retailers follow the lead of their counterparts abroad and tap the internet more aggressively to bolster sales.

Woolworths is putting the finishing touches on a new website that is expected to cherry-pick key features used online by global goliaths including Tesco and Carrefour.
The Australian group last month poached an executive from Tesco — which has an exhaustive online business — and has coaxed back respected Myer merchandise manager Penny Winn, who will return to head up its online business.

Industry experts say local retailers are about to fight a major war around the “one brand and multiple offering” model that exists in UK and Europe, where supermarkets offer far more than groceries.

While Woolworths and Coles have sold groceries and other products online for years, they have failed to capture the success enjoyed by supermarkets overseas.
The internet accounts for just 1 per cent of Australian grocery sales — less than a third of the proportion of online sales in markets such as Britain.
An industry source said Ms Winn’s critical skill would be blending traditional retailing with the new “multi-channel” demands of the online world.
“She brings expertise around technology and a vision around the opportunities it brings.”

The source said the current Woolworths platform was “Jurassic” compared to what was to be rolled-out, much of which had already been trialed on the group’s New Zealand website.
Analysts believe Woolworth will ultimately use the new portal to sell products from all of its businesses, including Big W, Dan Murphy’s, Dick Smith and the hardware warehouse operation now being rolled out, Masters.

A Coles spokesman said the retailer had a successful online offering and had no plans for a rapid transformation in response to Woolworths’ move. “We are growing into the new market progressively.”

Deakin University retail industry fellow Stephen Ogden-Barnes said the move to Tesco-style retailing “was already underway”. Mr Ogden-Barnes said the war would be played out in sales of non-grocery goods as Woolworths and Coles looked to leverage their extensive household reach.
“You want to sell those items that are yet to reach maturity. How hard do I fight to sell a tin of beans? Or do I sell car insurance.”
The prospect of selling financial services nationally without traditional overheads such as a rent for shopfronts would be mouth watering for the retailers, Mr Ogden-Barnes said.
Australian Centre for Retail Studies executive director Colin McLeod said Ms Winn would play a critical role at Woolworths, which launches its new site in November.