Woolworths tenders sales data sharing as digital race acceleratee

Sue Mitchell 
June 18, 2018
AFR

Woolworths and Wesfarmers are racing to build their digital and data analytics capabilities amid increasing competition in the $90 billion food and grocery market.

One week after Wesfarmers unveiled plans to double its investment in digital and data, Woolworths is revamping its sales data sharing services in a move aimed at tailoring its range to meet customer needs and giving suppliers better insights into customer spending habits.

The retailer has launched a request for proposal and invited its existing data and research partners – IRI, Nielsen and Woolworths’ 50-per cent owned data analytics firm Quantium – to participate in a tender for its sales data sharing platforms. 

Woolworths already gives more than 3000 of its larger suppliers access to sales data through Supplier Connect, where suppliers receive monthly scorecards and reports, which measure their performance against rivals and which analyse shopper spending habits.

Woolworths now wants to make that information accessible to a wider range of suppliers, including small- and medium-sized manufacturers, by offering tiered data sharing services at lower price points.

Woolworths also wants to make the data more granular, analysing shopping trends by channel (supermarkets, convenience stores and online), by store or clusters of stores, by days of the week and by SKUs (stock keeping units) to identify opportunities where the retailer and suppliers can customise the product range to better suit local demographics and preferences.

Woolworths also hopes the new data-sharing model will give suppliers confidence to invest in innovation and bring new products to market while overcoming concerns that new products will be copied by competitors.

“We know our customers want us to provide a locally relevant range in each and every one of our stores, along with new and innovative product offers that help them in their everyday lives,” said Woolworths’ director of long life, space and insights, Peter McNamara. 

“The changes we’re planning to make to supplier data sharing over the next couple of years will help support our vision for a properly differentiated and improved range for customers.” 

In a letter sent to suppliers on Monday, Mr McNamara said the new data sharing model would give suppliers the confidence to bring new products to market without competing suppliers having visibility of their performance. 

“This will protect supplier IP and innovation at Woolworths, which will help foster greater differentiation in our range,” he said.

Broader information on category performance would remain available to suppliers for benchmarking purposes. However, the new model would not undermine investments in innovation by showing suppliers’ SKU level performance to rivals.

The data sharing model includes Woolworths’ BWS liquor chain but excludes data from its customer loyalty program, Woolworths Rewards. It is expected to be phased in over two years.

A Woolworths spokesman dismissed suggestions the retailer would profit from selling the data to more suppliers.

“It is not our intent to charge suppliers more for their scan data entitlements, in fact we are looking at introducing lower price points to provide suppliers with more options to access data that better aligns with their requirements, the spokesman said. 

“This will include an entry level data package suitable for smaller budgets, as well as adding more information to the commercial reports.”

Woolworths currently subscribes to Nielsen’s Home Scan panel, which tracks household grocery consumption. 

IRI is Woolworths’ data agent partner and provides Woolworths with Market Read through tools such as Temple and Smartview. Woolworths currently provides underlying sales data for these reports.

Quantium provides a range of tools and analytic services combining scan and Woolworths customer data.

More information is expected to be released at Woolworths annual supplier forum in early July.