Woolworths: Where did it go wrong?

2 Things: customers won’t believe the Fresh Food tag when most of their food isn’t. Seen Whole Foods in the U.S.? Fresh.

Secondly, WOW marketing will never succeed if their marketeers are constantly usurped like skittles from Snr management.

It’s the result of numbers of factors I reckon.

But I do wonder if their decline in sales are correlated with their market research expenditure and their shift towards big data/predictive analytics/marketing pseudo-science/'”insert whatever-u-call-it-buzzword” analytics. They were generating insights using their internal data with the wrong assumption that it is representative of the entire aus shopping population and using the insights for their campaigns.
Any first semester pimple faced stats student would know that sampling from your own data leads to a bias sample. This is proven by the recent Roy Morgan research, which showed that Aldi customers are entirely different to Woolworths shoppers.

i say it’s the beginning of the end for big data/predictive analytics/marketing pseudo-science/'”insert whatever-u-call-it-buzzword” analytics.

From only shopping at Woollies to now mainly shopping at Coles it is because Coles have the Vitasoy Oat Milk, the Buckwheat Flour, the chicken marylands and the vac-packed meat. I pay little attention to marketing, except that I will do a couple of shops at Woollies to get some school vouchers over the next weeks (will also have to duck into Coles for the things I can only get there tho).

Woollies, stop eliminating products that I want and I will shop at your stores!

PS: My Mum has converted to Aldi for similar reasons.

PPS: I own Woollies shares! And I feel like a mug for doing so.

the first thing i look for in a supermarket? how close it is to my house. after that, whether they stock aussie & independent brands. after that, quality of goods. after that, price. way, way, waaaaaay after that, the marketing/advertising campaigns.

adguys overestimate how important they are to consumer staple brands. down down, cheap cheap, it’s all the same thing.

It will horrify many, but surprise none, to know that there is no Woolies brand guideline document. Which explains a lot.

They also continue to “disappear” staff to avoid awkward redundancy headlines.

The rest, if not all can be put down to utterly incompetent management. Rumours are that they are going to change how they approach loyalty. Stand by for another debacle…

Coles and Aldi don’t need luck or strategy. Patience will deliver them success.

decline in sales? let me give you free advice woolworths- your fruit and vege quality is below c grade, there is no client service, your check out staff are bland, the foods and products you stock are 1980’s, your whole product range is opposite of progressive countries overseas and the foods you stock are not what the people really want to consume?? ah, and let’s not forget the vegan and vegetarian foods you lack and that 99.9% of all your foods, even the health foods are full of toxins, sugars, preservatives etc!!! there you go, free advice…..how about a restructure with real ‘in touch’ humans running the company!! I’d manage the company for a quarter of what your ceo gets now!!

It’s insulting to think that this is the way Woolworths have decided to speak to their customers. With a 20 year old pop star we’ve barely or never heard of, and the Birds Eye birds recoloured. Talk about cheap. Add that to the injury of their overinflated prices and less than fresh offering and tired customer service and you can see why customers are saying fuck you. The 80’s called, they want their ad campaign and their outdated supermarket back.

I used to alternate between Coles and Woolies online shopping. Every time I bought a lettuce from Coles it was big, fresh and delicious. The next fortnight it was Woolies turn – smaller, significantly less fresh and even almost hollow in the centre…not to mention slightly bitter. Also carrots that would bend rather than snap and green on the loose potatoes. Fresh food people….what a joke.

Items I liked to buy have gone and been replaced by their homebrand equiv – which actually isn’t as good. Some items have gone and there’s NO replacement for them.

But the crowning glory is Woolies new online grocery upgrade – it’s hopeless. Slow, it freezes, i can’t search for stuff, it won’t scroll at times, it has oversized product boxes but with tiny print of the items. I can’t stress enough how terrible it is. I now do ALL my online orders at Coles and since it appears Woolies aren’t going to fix their website I’ve even unsubscribed from their email specials. I’ve washed my hands of them completely.

Can’t fault anything in the article really.

Woolworths continues to be a case study for a business that has lost its way. They’ve forgotten their core and gone to tackle Wesfarmers head on. Although they have moved aggressively to take market share off Bunnings, most of it has been at the cost of their supermarket chain. They’ve also ignored the ability for Bunnings to fight back and hold its market share, so much so their Master business break even point has been extended for later in the future. That said, they still have an opportunity to turn around their business. Only if they can prepare to stop or slow down their Master store openings and instead use that capital to fund improvements for customer centric systems, processes and operations in their day to day activities.

One of the main flaws of the Woolworths marketing strategy is the “fresh food people” is not in line with what they deliver to their customers. Unlike Coles, they’ve not invested time and effort to improve the look and value add of their stores. Instead they’ve only looked to fill their own pockets. For Woolworths to hold its market share it will need to become leaner and more efficient. It will need to make hard decisions and work on making it easier and more valuable for the customer to shop with them.

The lesson here is not only to keep on brand, but to deliver on your brands promise day in and day out.

How about allowing us to buy brands we know and not replacing them with all the Woolies so-called Select brands!

Leaving aside the Masters debacle, the problem seems to be that Woolworths’ supermarkets have no identity nor plan of business. It really seems to be follow the leader and hope we get a lucky break. I doubt that even a food poisoning outbreak at coles would help them much at present. They want to remain a top brand retailer and yet market cheaper products. The word cheap, is cheap across the board, in quality as well.
They have no nimbleness in the market. New or seasonal products can’t be introduces with any speed, nor do they appear to have any localised product ranges. Their range of ethnic foods is the same no matter where they are situated. New brands or ranges are not promoted or welcomed. It is as if you are annoying if you don’t want what they stock. It is almost as if they have taken the form guide from the old USSR shops.

Where the fuck do you start?

Bring back Samantha Jade

scantily clothed in the freezer Isle if possible

Some agency chump should win a prize for that

Great article

I honestly don’t spare a second deciding on which supermarket to go to. If I’m nearest Coles I go there, Woolworths, there. I also could not tell you anything different about what they have got or what they are like in terms of food or price. I think I’m probably the exception to the rule, but I just consider them to be one and the same.

I do think there is a place for a more upmarket supermarket though, one that focuses on premium, ready to eat foods, oven pizzas, quality sandwhiches, fresh fruit bars, curry counters – I’d go there for sure! Thomas Ducks was close but it tried to be too farmy.

I’m hungry!

If you apply any reasonable business model Woolworths have failed. For example their Mount Eliza store is jumbled in every aspect and customers go across the road to IGA for a modern approach.
Range of goods is limited, fresh is never fresh,pricing is poor and functionality leave much to be desired.
Corporations such as Woolworths treat their customers with distain in all aspects.
Management need to focus on the business and what the customers require, not what they believe the customers require.

Dropping the products people want to buy (and will pay a premium for) in favour of Woolworths Select. An ancient idea poorly executed.

Also known as making shareholder value more important than serving the customer. What could possibly go wrong?

@ richie – agree with you and in fact, Woolies have already dipped a toe in the water. Their new (ish) store in Double Bay, Sydney is amazing and should be used as the template for Woolies. Amazing fitout and design, fantastic service, amazing range, premium quality meat, freshest F+V, cheeses, seafood, bakery etc etc, This store really does the whole ‘shopping as an experience” well.

Hi Woolies PR Welcome to the discussion. Think the quote about shopping as an experience was a bit of a giveaway…

Too many good people let go, too many mediocre people hired, too much happy clapping.

Bring back Greg Foran from Walmart, give him 5 years with no interference and watch Coles go down.

Groucho – your observation of happy clapping rings even more true as they are based in the Hills, right next door to Hillsong. Join the dots and pray Greg makes a return.

Liam must be new in PR and not know that Thomas Dux is / was their premium offering. There is nothing redeeming about the big-but-bland Double Bay store. “It has a cheese room” is all I’ve heard of note. And if a cheese room is your biggest experience point then you’ve already lost. The Dan’s next door is of note though. As is about Food beneath.

Overall Woolies seems to be ripening for split up and takeover / sale. Masters is a debacle; Big W declining terminally; Financial Services are flailing; Rewards are valueless; Woolies itself jumping at the shadows of Coles, Aldi and Lidl.

Bye bye Woolies, it was nice knowing you. I give it 3 years.

Hi despise shopping at Woolworths. I’ve heard too many stories from too many people in the fresh food industry about how Woolworths screw their producers for every dollar. And I’m sure the general consumer has too.

The only reason I might go there occasionally, is for convenience. Similar to running to 7/11 for toilet rolls at 11pm at night. I don’t like going there either, but both stores fulfill a need. There is no (positive) emotional attachment to either of them.

I LOVE ALDI. I feel like I am getting value for every dollar I spend. My partner and I (who incidentally earn over $400k between us) love cramming our Aldi bags full of Aldi goodies and paying half the price of other supermarkets at the counter. Sure, they don’t have everything, but we head to our smaller retailers to get what we can’t find there.

WOOLWORTHS = GREEDY. ALDI = VALUE

Until they can change the above equation in people’s head, they will continue to falter.

Woollies ANZAC marketing is still Fresh in my Memory.
Take me a while before I want to go back and reward them with my $$$$$$.

Bring back some customer service and I may consider shopping at woolies again…. I am tired of having to self checkout my huge weekly shop and pack everything myself….I can pay half the price and do that at Aldi

Put some staff on the checkout counters…..!

It is a false economy to chop staff on the floor – chop them in your admin departments instead if you have to but you will get fewer and fewer customers if they can’t find staff to help them.

Is that the longest article ever posted on Mumbrella?

Marketing 101 = understand what consumers value, offer products and services that meet their needs, create a great and consistent brand experience that delivers on the promise, communicate it, and proof it. Not rocket science really. So where have they gone wrong…Hmmm where do you start…
– they lost sight of what customers value and replaced their favourite / trusted brands with home brands (that they could make a greater margin on)
– they screwed their suppliers, forcing them to produce home brand versions of their products that they had invested millions in, or else risk being deleted from supply
– They force fmcg brands to spend in their media channels so they can make more money
– they force their suppliers to be on sale more than 30 weeks per year, yet don’t reduce their profit margin, but force suppliers to carry the loss for risk of diminishing shelf space, prominence or supply
And I could go on.
– More like the “mouldy food people” than fresh
– terrible environment with narrow isles
– worst car parks ever
Kind of nice to see them get their just deserves. Greed eventually catches up with you.
Here is some free advice:
– start building valuable partnerships with your suppliers and stop screwing them for your own gain. Great businesses are built from win / win relationships
– make a promise you can actually deliver on
– allow fmcg brands to invest in their brands – not line your pockets
– get off the always on sale drug – you are actually reducing the value of the category, brands and products, not driving profit for anyone – and I’ve seen econometric modelling that proves it
Nice to see your cheap cheap (horrendous campaign) fall off its perch.

Even with some bias, I think the Mumbrella comments here provides better insight than what Woolies’ big data analytics will ever provide. I wonder if their Big data analytics will tell them ‘why’ people dislike Woolies’ or ‘why’ they are changing to shopping at Aldi? From what I can see, Woolies Big data just looks at answering the where, what, when, who questions and makes wild assumptions of ‘why’ based on the other 4 Ws. Not to mention sampling bias and omitted variable bias, which are huge problems in any predictive models and a number of other issues i can’t be bothered explaining.

If the primary purpose of big data analytics at Woolies is to make assumptions on why the customer is doing what they are doing from their actions then it’s as dead as a doorknob. (do i need to Harvard reference when i am commenting here?).

If only Woolies asked instead of assume then who knows….

Coles beat them to it to the Master Chef sponsorship.

Now imagine the banks have some competition applied from overseas

We just need govt to make it wasier to generate a banking licence… Then we will all be better off

Competition is something Aust is yet to learn about

This is the way business and the whole country should be run- the organisation underperfoms and you are out.

What, Leo Burnett escapes all blame?

Yep, they’re even more screwed than they know.

Wait till Amazon get serious here.

First, Big W will die (mercy killing, really).

Then Woolies.

Maybe they should review their marketing agency panel and get some professionals in to turn it around. Not amatures causing bad PR with distasteful ANZAC campaigns.

I know this is Mumbrella, but the best creative teams in the world can’t fix the customer experience. Really insightful comments here from Nic about the dynamics of the supply chain and further proof that this organisation needs to go right back to basics. Product, not promotion.

As a frustrated customer, with a Woolies down the road, I suggested starting with abandoning the “Woolworths Select” experiment and instead stocking the products/brands people want to buy, many of which they could easily justify a premium for if they create the right shopping environment. And then maybe a delicatessen that doesn’t look like 1978 and an artisan baker with the smell of fresh bread wafting around?

Or hire another ad agency and cross fingers?

I have a Coles and a Woolworths next to each other in the same shopping centre. Coles is large, well lit, modern and has self service check outs as well as lots of registers. Woolworths hasn’t been updated in years, has less range, always has cues. Often does not have a single register open apart from the express lines and the staff try and tell you “jokes” and ask personal questions when you’re just trying to buy some milk.

It’s pretty clear why it’s empty and the one next door is packed. It takes longer to get something in the empty supermarket.

# 1 Problem – we don’t believe the hype – I usually do my weekly food only shop near my gym after yoga… usual cost between $50 and $60 …. nursing a sore shoulder, so go to Woolies Bondi Junction instead … mostly same items $80

#2 Problem – Home Brand – most of us think Woolies are killing off Australian suppliers and supplying inferior products

#3 Problem – subconsciously we suspect they are r*ping the farmers … the big supermarkets (oh and our government by the way) exercising short term profit strategies that have severe long term affects for our country.

Simple question , so I will proffer my unqualified and simple answer.

Perception that they were the top dogs, the leaders of the pack and the best fresh food people in Australia. Bean counters and greedy corporate policy to the fore, they started and eventually became champions at the lucrative black art of customer deception.

They strode forward in the busy world like the armies of Genghis Khan, and allegedly began treating everyone, from landlords , to farmers, to truckers, to employees, to customers, like peasantry, and then had the audacity to sing Cheap Cheap, and profess to be the home makers friend.

There used to be an ancient axiom, now fading into antiquity , but perhaps still traceable…maybe even worthy. You can fool some of the people all of the time and all of the people some of the time, but… etc

There’s a common theme in these comments; lack of awareness in regards to consumer perception of their brand as a supermarket and offerings has resulted in a loss of their positioning, and has resulted as it seems, in a loss of competitive advantages to other supermarkets.

As stated above, it’s basic marketing; understanding the values and needs of consumers in order be seen as valuable and a better option for consumers.

For nearly a decade WW’s failed to invest in store refurbishment.
WW’s failed to be competitive on grocery prices
WW’s pricing was about all about profit not about being competitive
WW’s ceased to innovate – literally ceased.
And rather than actually devote time and money to fixing those problems [like Coles had spent the last five years doing] they hoped a couple of new ad campaigns would fix it.
They were wrong.
The problem here isn’t ‘Cheap Cheap’, or Leo Burnett, or Tony Phillips.
The problem is the years of disfunction and laziness at WW’s.
To blame the advertising or the people who created it is a cop out.

Woolies have been beaten by Coles in store sales for the past 20 quarters. Count em, that’s over 5 years. No half competent company Board would allow that to happen. Unless you had a hide, and a retail brain, as thick as Woolies.

They brought in Grant O’Brien as CEO because he was Roger Corbett’s yes man and said yes to continuing to rip off shoppers so the greedy Board and investors made their dough. The other contender, Greg Foran, a retail genius, told them they needed to compete with Coles on price to survive. Greed won out, and look where it got them.

They’re rooted.

I’m a bit late to this party but I do think a lot of the commenters have missed a large part of the point

the reason Woolworths have fallen behind Coles is due in large part to a lack of funds caused by their disastrous Masters investment. That has taken up a huge amount of management time and sucked in a gigantic (billions) amount of dollars, the opportunity cost of which is more investment in store openings, refurbs and other service improvements.

I do agree that the Cheap Cheap campaign is disgraceful in every way, that the Droga campaigns previous to that were wallpaper at best and that the brand as a whole has lost a lot of it’s meaning. But I also believe that advertising is in no way the core driver of WWS down turn, it’s more that Coles have got their shit together, Aldi are a really slick operation providing outstanding value and as above, WWS haven’t had the dollars to invest in improving their store offer

I personally stopped shopping in Woolworths due to poor customer service. In the past, when I had a small basket with goods, the checkout-chick would tell me to take the basket, once emptied, and place it in some stack.

THIS IS HER DAMN JOB!!!!

A customer should never be asked to do the work of the shop keeper! If I don’t want service, then I go to Aldi, where a lack of service (albeit with cheaper prices) is expected.

So I now shop at Coles…

Woolies do not have a problem that advertising can solve.

The sum of the parts is an altogether poor brand experience – across the width of product range, apalling service, high price without any justification, a lack of differentiation on ‘fresh’ (instore or otherwise), and a second place at best on NPD. No, make that a poor third.

Back to basics; back to customer needs. Marketing is more than advertising.

Good article.

I am thoroughly disgusted by the way Woolworths portrays prices in their supermarkets, they have one big price in the middle of their fruit and vegs for say $3.48 and the items placed under the sign are priced at $4.99 and $6.99. The actual item for $3.48 is no where near the $3.48 sign so you think the items directly under the sign are $3.48. I consider this misleading advertising. Also, I refuse to buy Select macaroni because years ago it was Home Brand macaroni priced at 59 cents, then one day the Home Brand macaroni disappeared and the next day it was Select at $1.29, they have since dropped the price to $1.00. Wow what a price jump. They must have made a fortune just by changing the packaging. The product in the bag was the same. I now shop at Aldi and Coles. The people at Coles actually smile and make you feel welcome.