The year 2020 will be remembered as the moment that has caused unprecedented changes and has changed everything. This pandemic decimated hundreds and thousands of businesses all across the world. A major impact of this pandemic has had on the way consumers were interacting with businesses, which is similar to many of the companies struggling for their survival in the post Covid-19 era. Trade exhibits, physical retail establishments, or in-person trades are unlikely to go away forever, and they will indeed be less essential than they used to be before this pandemic. Because of these shifting consumer behaviors, many companies started facing uphill challenges in terms of adapting and changing their business practices. Those, failing to adapt to the new normal also failed miserably to sustain and survive in the new business world. During these challenging times, no industry or organisation witnessed unforeseen and unprecedented transformations as digital e-commerce companies. Companies like Woolworths registered a significant growth even during this pandemic when all other companies and struggling to survive.
With extended period of lockdown, companies as well as consumers rapidly went digital and started conducting their business on internet, because of which the share of e-commerce in global retail trade increased from 14% in pre-Covid-19 era to 17% in the post-Covid-19 era. Woolworths is one such company which has registered impressive business and growth figures during this period. Therefore, this report aims to investigate and discuss the success story of Woolworths during Covid-19. Successful completion of this study will therefore, help in understanding various factors that are crucial to drive businesses towards business success and sustainability.
Woolworths is a leading Australian e-commerce company with a retail outlet network that comprises supermarkets as well as grocery stores. This organisation was formed in 1924, and as of now, it holds the largest share in the grocery chain market in Australia. Headquartered in Bella Vista, New South Wales (NSW), Woolworths is now operating over 1050 sites across Australia where its supermarket or other physical stores can be found. The company specialises on food and groceries, but it also sells DVDs, magazines, health & beauty products, and a wide variety of other things. The company also has a major share in e-commerce sector through its online stores called Woolworths online, which offers both ordering from home and picking up things at the store, along with home delivery services. During COVID-19, when customer needed things delivered to their homes and people were trying to remain indoors, the home delivery section of this organisation i.e. Woolworths online became even more popular and important among consumers. This has helped the company remarkably improve its performance in all aspects of its operations even during the Covid-19 pandemic.
During the challenging times of Covid-19, Woolworths' online sales department has performed incredibly well, and the firm continued to offer products and services online as well as delivering the same things at consumer’s door. As a result, the company without experiencing much interruption managed to continue its operations and provided exceptional service to its consumers who have had problems accessing the shop and purchasing basic necessities. Higher first-quarter revenues and extremely good sales in the grocery business were attributed to increased demand for online delivery services. Because of all these reasons, 2020 despite being a difficult year for managing the effects of the coronavirus epidemic on its consumers, Woolworths' full-year profit increased by about 78 percent (7NEWS, 2021). The firm also adopted a variety of techniques to achieve success on the internet platform, please its clients, and grow market share, eventually becoming Australia's leading online grocery supplier. The company particularly invested in strategies concerning digital infrastructure development and implementation through which it managed to increase its online presence, online marketing strategies, usage of CRM, Vendor management, Logistics, building trust for online users. All these strategies are discussed in greater detail in the upcoming sections of this report.
Woolworths as an organisation generates its revenue from retail outlet networks comprising of supermarket chains and from online stores called Woolworths Online. The strategy adopted by this organisation to drive its sales revenue is grounded on three key fundamentals as listed below:
These three principles listed above forms the core of the Woolworths operations and it has helped the company better respond to the challenges presented by Covid-9 disruptions when all of its supermarkets and retail stores were closed for months. During this period, the almost all of the revenue generated by the company came from Woolworths Online, its retail online stores. During this time, Woolworths’ e- commerce division performed exceedingly well, and the company aided its customers greatly by offering goods and services and delivering them safely to customer's place when it was nearly impossible for them to go out and visit stores to buy their basic necessities. The company's revenues increased significantly in the first quarter of 2021 as a result of increased sales from Woolworths Online, and it generated extremely excellent revenue from the grocery business. The company's sales revenue in the first quarter stood at AU$16 billion mark, which is 8% higher than the previous quarter data.
This revenue growth could indeed be a matter of huge surprise for other industries struggling to even make their operational expenses. These growth figures can be mostly attributed to increasing demand caused by lockdown in Victoria and NSW regions, as well as strong partnership with Woolworths supermarket that enhanced its e-commerce capacity. These factors led to an increase in Woolworths' revenue and it also shows the significant role played by e-commerce division of Woolworths in driving its revenue when all its in-store purchases were closed for months due to pandemic situation.
From the discussion presented above, it has become evident that web presence through e-commerce or other platforms had become critical for organisations of all size and industry. This has particularly been more crucial for Woolworths to continue its operations and drive its sales amid multiple waves of Covid-19 pandemic and prolonged lockdown measures and helped it in weathering the adverse consequences of this pandemic. As discussed earlier as well, Woolworths as an organisation has always embraced innovation as its core principle. This has helped the company improve its presence in the online market, improve the visibility of its product and service offerings and customers were able to easily find this company and make their purchases with greater ease and comfort. Besides, Woolworths also formulated and implemented a number of web presence strategies as listed below to better leverage the opportunities available through online market.
Customer relationship management (CRM) shows no sign of slowing down in the aftermath of COVID-19. CRM is in fact, assisting many firms in navigating these difficult times. Many small companies were forced to close their operations in the early phases of the epidemic. Woolworths, on the other hand, developed innovative methods to serve consumers and generate revenue without having to interact with them in person. CRM has always been a key part of Woolworths’ success and it has long been using CRM even before this pandemic. CRM provides a single source of information and consistency for the whole company, allowing it to maintain many of its regular business operations. When this pandemic hit, the company spun up its existing CRM to support the operations of Woolworths Online and effective handling of customer’s needs in the time of crisis. By ensuring that all the data and customer requests are accessible from a single location with a comprehensive 360-degree perspective, so that the company was able to keep its whole team on the same page. This one step made running this business a lot easier.
Vendor management
COVID-19 pandemic has put huge strain on practically every firm and each aspect of the supply chain. The spread of Covid-19 virus caused a rapid shift from a physical to a virtual corporate environment, leaving his enterprise with little time to adapt or face the consequences of commercial interruption. Woolworths, for example, is being compelled to adjust to the new reality by assisting internal business divisions in collaborating with vendors as well as stakeholders they might not ever have seen in person. The company particularly employed the two approaches as discussed below to ensure effective management of vendors and the supply chain:
Conclusion
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References
7NEWS. 2022. Woolworths full-year profit BOOMS during COVID pandemic. [online] Available at: <https://7news.com.au/business/finance/woolworths-full-year-profit-booms-during-covid-pandemic-c-3783627> [Accessed 15 June 2022].
