Woolworths’ “Pick Up” strategy reveals a secret about the future of shopping in an Amazon era

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Grocery giant Woolworths is looking to place groceries in the hands of customers as soon as possible with a new click-and-collect strategy that takes advantages of an emerging trend for Australian shoppers to order groceries via their mobile phones.

The supermarket has renamed its grocery click-and-collect  offering to “Pick Up”, and announced on Tuesday it will expand its in-store collection options to its 970 stores across the country.

In a statement, the head of the supermarket’s online division Lisia Roth said the move, which offers free collection services for orders of $30 or more, speaks to the interests of shoppers in the current retail climate.

Customers will be able to place orders via the supermarket’s app and select a time for same or next day pickup, depending on when the order is placed. Some 4500 employees will be trained to pick and pack the online orders.

At some locations, customers will also have the options to collect their shopping via a drive-thru service or park in specific parking bays to have their shopping brought out to them.

“Not only do customers want ultra-convenience and personalisation, they also want the experience to be painless and seamless. The Woolworths app will send you a notification when your order is ready, and you can alert us when you’re close by, so that we can have everything ready for your arrival,” Roth said.

The announcement comes as retail analysts predict Amazon will be in operation in Australia by Christmas, but experts have previously said the big two supermarkets are relatively well-placed to fight the global retailer, especially on the fresh food front.

In July, analysis from IBISWorld suggested that while all eyes were on AmazonFresh and its potential threat to grocery supply chains, Australian supermarkets still have logistical fortitude.

“The effect on the major supermarket players will likely be mild compared with disruptions in other retailing industries, particularly in the short to medium term,’ analyst Nathan Cloutman said at the time.

“Coles and Woolworths have the advantage of having many physical locations close to consumers. In addition, the major supermarkets already have the scale and logistical strength to expand their online capabilities through options such as click-and-collect,” he said.

The big two will have a need for speed

The big two supermarkets have both been trialling new ways to get goods to customers, with Coles partnering with tech startups like Uber and Deliveroo for pilot delivery programs.

Meanwhile, Woolworths has installed its own innovation arm, WooliesX, to work on programs like the “Pick up” initiative and to better leverage data and new approaches to customer engagement.

The supermarket chain is also conducting trials for one-hour deliveries in some Sydney suburbs for a fee of $15, reports Fairfax, while its BWS liquor outlets in metro areas in Sydney are also offering speedy deliveries for online orders.

WooliesX managing director Amanda Bardwell told Fairfax there are plenty of “on the go” shoppers to engage with on this front, with 65% of traffic to the Woolworths shopping site is through mobile.

Retail expert at Queensland University of Technology Gary Mortimer tells SmartCompany this statistic suggests customer expectations are shifting again, and there’s an emerging trend on the horizon. Shoppers now want more than simply convenient delivery: they want to access goods immediately after purchase.

“It’s like ordering a takeaway pizza now; we tend to do it on the train and we want to grab it on the way home. I think there will be a move away from being the cheapest to being the fastest,” he says. 

When Woolworths revealed its full year result in August, food and beverage sales were up 4.5% to $36.4 billion.

At the time, analysts saw several positives in Woolworths’ ability to claw back food sales from rival Coles, and some saw opportunities for click-and-collect beyond the fresh food offering.

Speaking about Big W’s disappointing result, Euromonitor International analyst Hianyang Chan said as Big W’s parent company, Woolworths would also be looking at “better customer service and most importantly, introducing a flexible, faster and cheaper same-day delivery service”. 

SmartCompany asked Woolworths for further details about the “Pick Up” program but no representative was available prior to publication.

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