IT at Woolworths - Case Study Example

Research Report on IT at WoolsWorth Name Class Unit Date Introduction Woolworths was started in Australia in 1924 and have expanded to be a major food retailer in Australia and New Zealand. The retailer started the fresh food retailing over 60 years ago and have been able to innovate through technology change. The food retailer has been branded as one of the most innovative retailers in the industry due to their ability to provide the consumers with efficient methods of shopping (Ferguson, 2010). Woolworths have more than 3000 stores which are in Australia and New Zealand and have employed more than 20,000 staff. The organisation has also overseas presence in several countries. The Australian food market is very concentrated and dominated by Woolworth and Coles (Walsh, 2010). Woolworth has more than 840 stores in Australia. Being among the leading food retailer, the organisation decisions plays a major part in the industry. We conducted an interview with the Woolworth’s sales manager and the company head of IT department on the role played by technology in company expansion and delivery of services. This research report is based on the interview conducted on information technology use at Woolworths. According to the manager, the competition in the food retail market forced the company to come up with means to attract and serve a larger market. The use of technology in the food retailer was meant to boost the stores merchandising expertise. The organisation sought to enter into e grocery. The growth of the internet helped the organisation a lot in adopting new measures. Online purchases have been increasing among the consumers, making it prudent for Woolworths to adopt it. In order to enhance the supply chain, Woolworths adopted business to business (B2B) platform. According to the manager, this was due to factors that having an efficient supply chain is important in ensuring that fresh food is delivered to the consumers. The platform helped Woolworths to establish a real-time integration with the suppliers. The manager explained that the platform has been a major success in the organisation since its implementation. The platform allows the organisation to have ease in data exchange. The organisation chooses Leadtec as the provider for the B2B platform due to their technical capability. The system enabled Woolworths to have a reliable and fast transmission of orders. For example, the manager used the case of Bartter Steggles who supplies chicken need for a fast delivery system. A lot of companies have adopted technology, which has enabled them to be more reliable (Danziger, 2006). Another move according to manager is the use of Google Apps and Chrome to enhance effectiveness. The organisation needed to have a good strategy in order to promote collaboration, effectiveness and productivity. The company engaged in a transformation strategy to ensure that they are at par with technology. Through technology, Woolworths have been able to bring the management closer to the consumers. The manager is able to stay on the shop floor and have a closer focus on the customer rather than being on the office. The employees are thus empowered to work from any of the devices. The organisation has thus introduced the use of consumer based technology in order to make the employees more efficient and have an innovative working environment (Danziger, 2006). Another area where the company has applied technology is a Woolworths merchandising system. The company has been able to establish itself as one of the users of sophiscated technology to serve customers. According to the manager, the system is core of the company daily operations. Through the system, the company is able to get all information about the products, trade partners, processing of orders, pricing and product’s delivery to the company store. The company implemented the system as a way of improving their business. Through the system, Woolworths was able to remove the manual processing of product information sand enabled electronic receipt system. This has enabled Woolworths to be at par with the industry information standards. By the late 2011, Woolworths was able to benefit from getting the data catalogue in both Australia and New Zealand. Through the use of the merchandising system, the company has been able to gain the product information and eliminate the product specific papers. According to the manager, the system also enabled the removal of the Woolworths Article Form (WAF) and Woolworths Price Form (WPF) (Danziger, 2006). The manager explained how the system works. GS1 is a not for profit organisation which have been involved in designing maintenance standards. The standards developed helps in coming up with unique codes of identification which can be combined with the data carriers such as bar codes and the e commerce processes (Raff & Schmitt, 2011). This enables the business to benefit from improved information sharing. According to the manager, GS1net system have helped the company in data integrity, elimination of manual processes, streamlined communication and reduced claims. The system enabled all the business under Woolworths to participate in GS1 net. Due to increase in digital technology, technology enabled shopping have been on rise. There are varieties of technologies that can be used to enhance e shopping (Cornet, Milcent & Roussel, 2000). For example, Smartphone apps have been in use by many companies to gain access to customers online. The method has been supported due to its simplicity and efficiency. Woolworths have been able to adopt and implement the e shopping technology. According to the manager, the initiative was started due to changing consumers’ behaviors. Most of the consumers have adopted technology in their day to day shopping. Woolworth’s management adopted online selling due to growing interests on the consumers to shop online. According to the manager, the retailer had to adapt to the technology and implement an e commerce platform (Cornet, Milcent & Roussel, 2000). According to him, the consumers preferred shopping online due to lower prices, convenience and saving on time. The introduction of online shopping has helped those who could not visit the shops due to various reasons such as disability, home chores and transport issues. He sees online shopping as an eco-friendly way of doing business as it reduces pollution through transport. According to him, a typical shopper can visit the store about 3 times a week. Making online orders help to reduce these unnecessary trips and time saved can be used on other issues (Raff & Schmitt, 2011). The consumers are in most times busy and saving time can help them a lot. The company e-commerce website provides details on products, services, prices and offers. This makes it possible for the consumer to make an informed decision (Cornet, Milcent & Roussel, 2000). The company has thus been able to reach to the consumers more efficiently through the use of technology. The company has customized their e-commerce website in order to ensure that the consumer can easily pick an item and also list the products depending on the frequently ordered products. Although Woolworths have been able to benefit through e commerce, not all customers have appreciated it. Some of the consumers still prefer to visit the retail store making their regular trips. One of the major problems that have made the consumers to avoid online shopping is delivery schedule. There are also consumers who do the shopping together with other activities. For example, the manager cited a consumer who may want to shop for grocery and also combine it with other activities such as picking dry cleaning. This may make the consumer to prefer visiting the store instead of making online purchases. Some of the consumers may fear shopping online due to credit card security and need for immediate products. He asserted that these are areas in which the company has been working regularly to improve on. For some of shoppers, visiting the store has its social aspects. According to the manager, credit card security is an area where the retailers have ensured that consumers that they have catered for. This is due to rise in cyber crime where the consumers can lose their money in fraudulent means online (Raff & Schmitt, 2011). Another barrier that Woolworths have faced in online retailing is the freshness of the grocery. Though the company sells fresh produce, some of the consumers may need to touch and smell before buying to confirm. But the manager asserts that once a consumer buys the products online, they become captivated by the method due to convenience. Online grocery market has been experiencing an increase in consumers. Since its inception, the number of purchases made online has been rising. The manager cited several advantages of e grocery that Woolworths have enjoyed. These are low costs due to fact that there is no rent, taxes, parking to be paid as in the traditional stores. The system also enables inventory management to be easy since the inventory is pooled to fewer locations (Raff & Schmitt, 2011). E-commerce has also been an advantage since spoilage can be reduced and the lead time from the producer to consumer. Through the use of e-commerce platform, Woolworth has benefited from ease of collecting information on consumer behavior which helps the marketing team in targeting and promotions. The firm growth has been incremental in the e commerce sector due to the efforts that have been put in it. Innovation has been the key in online marketing. The manager asserts that though impulse spending is said to diminish on online shopping, the company has put innovation on their website which have attracted the consumers. The company has been trying to make sure that more consumers are attracted to their online stores. Despite this, they are aware that not all consumers will accept to make their purchases online. There are consumers who may want to walk into the store after a long day’s work to rewind and make fewer purchases. There are those consumers who trust the stores and would want to shop where they have been shopping for years (Danziger, 2006). The manager cites that costs incurred in online delivery depend on the number of deliveries in a certain area. The manager claims that despite the advantages that technology has brought to the industry, there are several hurdles that a business must overcome. He asserts that days are gone when one could open up a venture and consider failure as a learning process. To him, engaging in e commerce requires the company to have competent management and well drafted logistics. Idea only cannot be enough to enable the firm to operate in the e commerce industry. For the grocery segment, he attributes success to having solid logistics (Raff & Schmitt, 2011). The fact that grocery market has a thin margin makes it important for the industry to have efficient order fulfillment and delivery for the products. The facts that Woolworths had a solid customer base in Australia have enabled the e commerce platform to succeed. According to the manager, e-commerce requires the company to have an existing customer’s base. As the customer demands for value in e commerce, the retailers are expected to have several capabilities. The managers gave four steps in which Woolworths have undertaken due to enhance their capability. The first step is deep shopper understanding. This involves getting the understanding on the shopper and their online behaviors. This has acted as a differentiating capability for Woolworths. The company has launched shopper loyalty programs that are aimed at making it easier for them to understand their online consumers. Digital and mobile marketing is another aspect that Woolworths have enabled. The use of mobile technology has been aimed at helping the consumers in their shopping experience. The company has also engaged in multichannel retailing. This involves the use of integration of several stores such as online, in store and digital mobile offering. The method has enabled Woolworths to meet the buyer needs. The use of multichannel approach has been enabled through the use of supply chain capabilities and office backup systems. Innovation is the last step. This involves the use of innovative means to enhance online retailing. For example, the way the products are arranged online helps the consumers to have a distinct value in their mind (Danziger, 2006). The Woolworths online supermarket has been hailed as one of the most successful in Australia. The usability of the online supermarket refers to the mental picture that a client has when making shopping online (Cornet, Milcent & Roussel, 2000). For most of the online shoppers, they have once experienced the traditional shopping experience. This refers to shopping experience where items are arranged in aisles and are easy to locate. The company is thus supposed to make sure that they transfer the traditional shaping experience into online shopping. The manager indicated that shopping online in the company website has been designed to give the consumers ease of access to products and also give them a feeling of traditional shopping. Navigating is one of the sectors where the company has addressed. Contents are well organized and classified which enhances usability. When navigating in the site, it is easy to find the product being searched for. The site uses the pictures of the items and lists their prices. There is also a search button to enhance quick locating of a product. According to research on Australia online retailers, Woolworth’s website had the least search time. This has enabled the users to have consistent results. The site have search button and trolley which makes the shopping experience complete. The website returns the items under one category with headings. This enables the users to scan the results list more easily. Items are placed in clearly labeled columns and the results arranged in alphabetic order. The isles at the website are logically arranged enhancing usability. Use of pleasant color scheme is needed in a website. The manager asserts that colors used by the website have a great effect on usability. Use of company colors has been able to benefit Woolworths more in online shopping. The manager claimed that they could not use bright colors on their website as they can offend some of the users. Woolworth’s website has also been rated as the most appropriate in ordering items (Raff & Schmitt, 2011). If the company website has the items and buttons placed illogically, there are higher chances of poor consumer experience. The manager asserted that there is a need to know that success in e-commerce is also about how the company presents its online platform. Woolworths have been able to gain reputation as having the easiest to use website. The company must make sure that their search facility is fast and reliable. For example, making a search in the Woolworths website returns all the related items making it more convenient for the customer to choose (Baah, 2003). When a company utilized its traditional branding colors in their online store, it becomes easier to increase the consumer confidence. The use of isles in the websites creates the semblance of traditional store layout. The company has been using a fast website, making it easy to load. From the interview, it was evidence that Woolworths have been able to benefit immensely from online retailing. The rise of the platforms has been a positive step in the technology sector that has helped the retailer to increase their competitive advantage. In formation technology in grocery retail is an area that has benefited a lot in the companies such as Woolworths who have been able to take it in the right way (Australian Retail Grocery Case Study, 2009). Business IT is a field that has the potential to help a business gain a competitive edge as proved by Woolworths. According to the Woolworth’s head of IT, there are several items that have enabled the success of their online commerce website. The first item is having an informative webpage. The shopping site has all the information that is needed in the homepage. This acts as a clear signage which guides the users on how to shop. For example, she sites that Woolworth’s use of isles in their e commerce helps the consumers to get to the products fast. The isles have titles and items are kept into divisions. For example, related items such as fruits are kept in the same isle. The page should have a clear left to right path. This means that the user should be led from left to right while making their shopping tasks. If the flow is altered, the users may find it hard to navigate. For example, the trolley is placed after the customer makes a purchase (Raff & Schmitt, 2011). She explains that this is one mistake that many online retailers make which reduces the usability of their websites. The search capabilities should be available in all columns. The search button should be able to return results based on both the words typed and give a chance for user to edit. The company search also enables the results to be arranged logically. The Woolworths results are sorted through description and brand. This enables the results to be grouped depending on the similarity. She added that the color used to differentiate rows should be brand indicative and inoffensive. Websites are also supposed to have simple user friendly instructions. This enables the customers to follow easily and locate items. Woolworth’s website has been based on simplicity which is drive to its success. These implications show that despite the adoption of e commerce platform, the design used plays a major role. The web designers are supposed to test the platform for its usability before it’s implemented. Having a poorly designed e-commerce platform can lead to the consumers being unable to use it which reduces clients (Randall, 2003). Woolworths have proved that the success of online platforms is based on superior designs which are consumer oriented (Raff & Schmitt, 2011). Another area of technology implemented by Woolworths is the use of RFID technology. The technology is used in tracking fresh produce in the supermarket and temperature monitoring. The use of technology was started in 2008 as a trial project. The manager cited that the use of RFID in temperature monitoring was declared viable due to low costs and convenience. This was not the case for the use of RFID in produce monitoring across the supply chain. The managers say that RFID provided the set of technology which they needed in their produce department. The use of tags in produce monitoring helps in reducing manual paperwork and enhances documentation. Woolworths have benefited from reduced wastage and better visibility of stock. The company can locate where a certain crate is without the need of manual tracing. The use of RFID in fresh produce industry is thus very vital due to time saving and efficiency. The RFIDS have also made temperatures monitoring better. The manager cited that temperature control helps in making sure there is no spoilage in the company (Raff & Schmitt, 2011). Woolworths were also the first retail supermarket to introduce the self checkout technology. According to the manager, the customers can use the system to scan, weigh and pay for their groceries. The machines enabled the customers to buy credit cards and get petrol reward dockets. This was an initiative that helped the supermarket to get a competitive edge. The technology was adopted since it had been a success in Europe. The main disadvantage according to the manager was loss of jobs. Despite this, the manager insisted that not many jobs were lost since there was an assistant in each of the machines. The loss of jobs due to this technology was felt later, after the assistants were replaced. The technology has been cited to have helped the consumers to gain satisfaction and to enjoy convenience and efficiency. Since the adoption of self check technology by Woolworths, it has been a success in supermarkets which adopted it (Danziger, 2006). In 2013, Woolworths established a plan to offer free wifi in their stores. The manager asserted that this was aimed to help the customers to use their smart phones when the network coverage was poor. The customers were able to access to the online recipes and shopping lists. The technology received good feedback from areas where it was conducted as a pilot study. The manager cited that the provision of the free wifi was an initiative that would help to combine physical and digital shopping. Through technology, the company has been working hard to come up with multi option retail offering. Through the application, the user can locate product, get the offered come up with a shopping list through scanning the bar codes. The company has also been working in introducing virtual supermarket. Virtual supermarket trials have been conducted in streets and train stations using the product image and bar codes as shown in figure below. The consumers can then make shopping using the mobile application. The manager clarified that though Woolworths have been on the technological frontline, they would not abandon efforts to improve their physical stores. Woolworths is a perfect example of the ways in which technology is shaping the grocery shopping experience. The shopping experience has been changed into a comfortable errand that can be done at convenience. The use of new technology has been aimed in making shopping easier (Robert, 2008). Woolworths have been able to provide the customer with ease of locating the products in the store. Through the mobile phone, the customer can find the location of the item they are searching for. This helps the shopper to eliminate aimless searching as the manager claims. The supermarket also enables the shoppers to have coffee. This is through the use of vending machines that have the capability to convert the change into gift cards or cash. The shoppers can also ring up purchases as they make them in the aisles. This helps the customers to reduce the wait time at the cashier’s desk. The mobile applications are available online free which helps in enhancing the shopping experience as shown in below figures (Danziger, 2006). The use of computers for the operations in the supermarket has made it easier to process, store and retrieve information. Since the rise of information technology, the processes at the company have been becoming easier according to the manager. The computers can be used by the company to control the freezers and chillers. Being a grocery store, use of freezers and chillers is extensive. This means that there is a need for an elaborate control to ensure that there is efficiency and reduce the chances of breakdown. The manager asserts that use of modern technology in the sector has helped a lot. For example, he asserts that different products have different temperatures, which they need to be kept at. This would be very difficult to control using the manual methods. All freezers and chillers are linked to a computer in the control room. The computer continuously monitors the temperatures and makes the adjustments automatically (Ferguson, 2010). In conclusion, Woolworths have been able to make great strides in the technology sector. The company has been able to move with the technology, especially in their grocery segment. There have been a lot of innovations and inventions aimed at enhancing the store digital perspective. The use of online shopping has been able to offer the consumers convenience and saved them a lot of time. The company has the best website which has been cited to help the customers to make purchases easier. There are uses of mobile applications in the supermarket which have enhanced the shopping experience. Woolworth’s success in e-commerce can be attributed to their efforts to be at the frontline of technology implementation. The company has designed their website with the user in mind. This is through the creation of a website with high usability. The company has also utilized several technologies such as GS1 net, B2B and RFID that have kept them among the top retailers and helped in their innovation capability being noticed. It’s important to note that when business is able to adopt IT in its operations, there is an added competitive advantage as asserted by the manager. References Australian Retail Grocery Case Study: Challenging the Dominance of Coles & Woolworths. 2009, S.l., Datamonitor Plc. Baah, A 2003, Woolworths - Your quality story?. South African Labour Bulletin, Vol. 27, p. 17- 19. Cornet, P., Milcent, P & Roussel, P.Y 2000, ‘Electronic commerce’, Mckinsey Quarterly , Vol.2, no.1, p. 31-45. Danziger, P. N 2006, Shopping: Why we love it and how retailers can create the ultimate customer experience, Chicago, IL: Kaplan Pub. Ferguson, R 2010, The Brontës went to Woolworths, Oxford, ISIS. Raff, H & Schmitt, N 2011, Manufacturers and retailers in the global economy, Kiel, Kiel Inst. for the World Economy. Randall, M 2003, Winfield: Living in the shadow of the Woolworths, New York, Thomas Dunne Books. Roberts, S 2008., Woolworths'. Pharmacy News. 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