Andrew Loveday, the General Manager of Property Development at Woolworths maintains that despite the influence of e-commerce on consumer preferences and expectations, physical retail stores remain an essential aspect of the overall consumer experience.
The COVID-19 pandemic had a significant effect on the way people shop, with more time spent indoors leading to a surge in online shopping.
According to Mr Loveday, Woolworths’ nationally saw demand for online grocery deliveries double during the pandemic, necessitating a range of adjustments to meet the unprecedented demand.
Woolworths continues to observe growth online, but brick-and-mortar stores are still critical to the customer experience.
Mr Loveday emphasises the need to accommodate both forms of shopping.
“[Consumers] still want to be able to go to a shop, they want to walk the aisles and touch the products, they want to go to environments that aren’t just shopping centres but are community spaces,” he said at a recent Property Council event.
He said the company has ramped up its ‘direct-to-boot’ initiative across the country as a reaction to the hybridity of online and physical shopping.
“We found that there was a stickiness between good online facilities and good retail facilities,” he said.
“And where you got both right, we experienced the most foot traffic and the biggest sales uplift.
“The other interesting fact is that the start of a shopping experience is changing for a lot of our customers. Whether that’s placing an order to pick up or deliver, or it’s going to our website to look for a specific product, or to look at recipes which they can then go to store or buy online.
“There’s certainly been a shift in terms of the multi-channel way of shopping. Our average digital weekly traffic in the first half of FY23 was 22.7 million, with half of that coming through our apps.”
Mr Loveday said online penetration is still relatively low in Australia compared to other countries. However, companies still need to accommodate for the uptick in growth.
“We’ve developed e stores that combine a supermarket and space for an automated storage system, which enables us to ramp up our online capacity.
“This enables a hybrid model, where the fresh food is picked from the store floor and there’s a whole range of products that are stored in an automated facility.
“If you’re not embracing these changes that we’re experiencing, if you’re not investing in them, then you’re not providing customers with what they want.”
Mr Loveday cited the evolving expectations regarding online deliveries, with customers now anticipating faster and more precise delivery windows, evolving from same day to even as little as a two-hour time slot.
“From our perspective, it’s making sure that we’re providing flexibility and choice for our customers,” he said.
Despite all the changes happening, your local grocery store isn’t going anywhere.
“Bricks and mortar retail remains a fundamental part of how we connect with our customers,” Mr Loveday said.