Woolworths’ digital, ecommerce and loyalty payoffs start to scale – Strategy – Software

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Woolworths Group has started seeing notable growth in digital and ecommerce as its technology and analytics platforms yield results.

CEO Brad Banducci said the 2022 financial year “was another record year for digital and ecommerce” – with ecommerce sales increasing 39 percent to $6.263 billion.

“Customers are also engaging with our websites and apps more frequently, with an average of over 19 million customers a week across digital platforms during the year,” Banducci said.

“Across all of our ecommerce businesses, we are becoming ever more efficient as our scale increases and as we continue to optimise our processes.”

The retailer now has approximately 1 million active weekly ecommerce customers.

Woolworths also saw its Everyday Rewards customer base rise to 13.7 million members, up an extra 628,000 users from the previous financial year, owning to more personalised offers.

wiq use cases

Since lifting its Quantium shareholding to 75 percent and establishing wiq, a combined entity of Woolworths and Quantium, the team is now working on in-store and online improvements

“The team brings together more than 600 professionals and they’re working on 20 high-priority use cases across group,” Banducci said.

“Early progress has already been made on optimising promotional effectiveness and personalising customer offers.”

WooliesX’s new digital drive

Over the year, WooliesX established a ‘ConnectedX’ platform which links group digital platforms and creates a better and integrated customer digital experience.

Digital traffic via the platform increased 22 percent, which underpins a new real-time loyalty service that enables Woolworths Rewards members to find customised promotions and earn points in real-time.

WooliesX’s ongoing investment in the group’s digital operations facilitated a 63 percent rise in weekly active app users, as well increased visit frequency.

Customer engagement with digital tools enabled a 37 percent increase in users of Woolworths’ ‘Shopping List’ function, and a 29 percent in use of its recipes function, both compared to the year prior.  

Over the year, WooliesX also launched the Metro60 app, which allows customers to receive grocery orders in under 60 minutes.

Running the numbers

Woolworths’ operating capital expenditure for the year was $1.9 billion with FY23 costs expected to come in at around $2 billion.

The company recorded a growth capital expenditure of $525 million, with $121 million invested towards digital and $147 million spent across ecommerce.

Its gross capital expenditure came in at $2.458 billion, compared to $2.174 billion last year.

WooliesX B2C [business-to-consumer] ecommerce sales growth rose 42.3 percent to $4.7 billion in FY22, representing 10.3 percent of Woolworths Retail sales.

Woolworths group sales for the year peaked at $60.849 billion, up 9.2 percent from last year.

Its group earnings before interest and taxes (EBIT) came in at $2.690 billion, down 2.7 percent from FY21.

However, its group net profit after tax (NPAT) reached $1.514 billion, up on the prior year.

Cartology, startups

Banducci added Woolworths sees its data-driven marketing business Cartology “as obviously a critically important platform for our group” with revenue rising 29 percent “supported about high traffic … to our digital properties and the launch of new media products.”

Woolworths is also incubating a number of digital start-ups such as PetCulture, HealthyLife and Metro60 “that are driving innovation for our group as we continue to learn from, and invest in, their growth and development.”

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