Responding To digital Disruption The Woolworths Way

Female store cell phone close-up
SHARE
THIS



While disruption presents significant opportunities for Australian businesses, the biggest risk facing leaders and executives is not to take any action at all.

It’s now a fact: ignoring the wave of digital disruption will result in the loss of customers, and ultimately result in business failure of extinction.

Business leaders only have to look at the demise of big brands like Nokia, Video Ezy and Kodak who are on the brink of extinction due to a lack of innovation, to see the threats of disruption are very real.

According to Ryan Fahy, CTO at Woolworths there are a number of implications for large organisations if they don’t formulate a strategy about how to respond to digital disruption.

“The risk is there’s a competitor out there who we don’t know about, who has a good idea that will hurt our business.

“If we don’t respond to it, or we respond to it too slowly, they would have already made huge inroads into the sector and potentially have started taking customers away from us,” he said.

So what steps is the retail giant Woolworths taking to tackle the threats associated with digital disruption, as well as to take advantage of the opportunities it can provide?

Fahy said there are a number of elements of Woolworths’ digital strategy and a number of methods are required to overcome the challenges the business has faced on the road to digital transformation.

The challenge: innovating in a large organisation

Woolworths is a large and complex organisation, whose customers rely on being provided with high-quality products.

And as to be expected in a large organisation, there are a huge number of processes and people involved in delivering high quality service and products to customers Australia-wide.

Fahy said it has been these processes, and the fact that Woolworths is such a big organisation, which has been their biggest limitation in terms of innovating.

“Innovation requires a business to move and respond quickly. This is something that has been a big challenge for us.

“It’s forced change across the board, because moving quickly means that different parts of our organisation need to interact and talk to each other, when traditionally in the past they would not,” he said.

Fahy believes responding to digital disruption is about taking risks and accepting that failure may be involved.

This can be somewhat daunting for a large business like Woolworths, with numerous internal systems and processes.

“Taking risks is a big part of digital disruption, and if you’re going to fail, fail quickly. In our organisation there has been a reluctance to fail in some respects, so we’re trying to get people used to the idea it is ok to fail.

“If you look at the skill sets in large organisations such as ours, huge risk-taking mentalities is generally not part of our company’s DNA.

“It’s also again difficult to justify taking a risk when you are taking those risks with other people’s capital – such as our shareholders,” he says.

Despite this, Fahy said he has been pleasantly surprised with the reaction of Woolworths staff to digital transformation, and the idea of ‘risk taking’ in the wake of digital disruption.

“Even within large organisations like ours, there are enough people who have that risk taking mentality and can do it with a sense of stewardship over the stakeholders funds.

“We’re finding we do have people within our company that have the right spirit and mentality to facilitate innovation,” he said.

Creating a culture of innovation

According to Fahy, the idea of creating a holistic, detailed digital strategy is not always the right step for oragnisations to take when it comes to innovation.

Instead, Fahy believes a digital strategy comes down to putting the right capabilities in place and getting the right people in different parts of the organisation to communicate.

“For me, digital strategy is creating the right culture, the right relationships, the right dialogue and the right capabilities.

“This enables staff to have the right degrees of freedom to respond to external challenges, but also allows them to be agile and nimble enough to respond to the opportunities bought about by disruption,” he said.

One way Woolworths is facilitating a digital culture, is through the creation of a ‘chief customer and data officer’ in September 2014, who is at the heart of the organisation and drives innovation based on changing customer behaviour.

Fahy said data is being used in two ways in order to meet changing customer demands bought about by digital.

“On one hand we’re using data to see how we can better meet the needs of our customers. But we’re also using data and innovation in terms of how can we actually improve the movement of physical goods for our customers.

We are working on new and better ways of delivering those foods at the right place at the right time, to meet our customers’ needs,” he said.

One example of how Woolworths is responding to their changing customer needs, is through the creation of it’s first dedicated online store, which opened at Mascot in Sydney in August 2014.

And with Woolworths’ total online sales, including general merchandise, exceeding $1 billion for the first time in 2014 – growing 40 per cent in the December half – it was a smart move to make.

While it is too early to say if the company will open up more dedicated online stores across the country, it certainly shows how they are finding new ways to engage their customers, adapting and innovating in order to remain relevant in digital market.

Fahy believed another important aspect of any companies approach to digital, large or small, should be learning and partnering with other organisations.

“We’ve got a reasonable number of interactions where we are trying to expose our people to nimble and agile entrepreneurial organisations to see how we can work together.

“This could involve start-ups, or even smaller organisations with a very different perspective on the market. In some cases they might have a capability that could help us out, and in other cases we might have something that could help them out,” he said.

 

Please login with linkedin to comment

Jamie Oliver

Latest News

First Lady Michelle Obama and President Barack Obama Dance Together at the Presidents Ball
  • Media

Netflix Secures Producer Deal With The Obamas

It seems former US president Barack Obama and former First Lady Michelle Obama aren’t quite done with the international spotlight just yet. The Obamas have officially signed a multiyear deal with Netflix, which will see the power couple producing films and series with the streaming giant. According to Netflix, “The Obamas will produce a diverse […]

How To Spot A Trend Versus A Fad
  • Opinion

How To Spot A Trend Versus A Fad

Nils Vesk (pictured below) is an innovation architect who’s delivered programs for some of the most prestigious organisations in the world, including Microsoft, IBM, Commonwealth Bank and Nestle. In this guest post for B&T, he shows you how to spot a lasting trend that’s not merely just another passing fad…   The importance behind learning […]

Opinion

by B&T Magazine

B&T Magazine
Study: Almost Half Of Aussies Browse Mobile Retail Sites For “Retailtainment”
  • Marketing
  • Technology

Study: Almost Half Of Aussies Browse Mobile Retail Sites For “Retailtainment”

A new study today has revealed that although mobile commerce may have begun as a convenient way to shop on-the-go, it has quickly developed into an entertainment experience for many Aussies. The PayPal mCommerce Index Trends Report 2018 (which you can read in full here) found that two thirds (67 per cent) of Aussie smartphone owners browse shopping sites just […]

by B&T Magazine

B&T Magazine
Why Engagement Is The New Rule Of Content
  • Opinion

Why Engagement Is The New Rule Of Content

In this guest post, King Kong’s head of growth, Sabri Suby (pictured below), takes a look at recent changes to Google’s rankings and how it will affect content makers and the measure of any content’s success… Changes to Google’s ranking algorithm mean that time on a page is valued higher than the number of clicks. With these new rules […]

Opinion

by B&T Magazine

B&T Magazine
Fairfax Media Recruits 20 Trainee Journalists Across All Its Titles
  • Media

Fairfax Media Recruits 20 Trainee Journalists Across All Its Titles

Fairfax Media has today announced the recruitment of 20 trainee journalists to join the newsrooms of The Sydney Morning Herald, The Age, The Canberra Times, The Australian Financial Review, Brisbane Times and WAtoday. This represents one of Metro’s largest trainee intakes in years and underlines the commitment of the mastheads to fostering a new generation […]

Sydney Australia - November 7, 2011. An extreme close up of an American express card issued by the Australian bank Westpac.
  • Media

AMEX Launches Global Media Review

Are there not enough hours in the day? Are you cheek-by-jowl with your co-workers? Well, hopefully you won't win this.

Sydney Water & Republic of Everyone Create Vinyl Records Made Of Recycled Marine Plastic
  • Campaigns
  • Marketing

Sydney Water & Republic of Everyone Create Vinyl Records Made Of Recycled Marine Plastic

Sydney Water has pioneered a way to create records from marine plastics and, in doing so, encourage more people to join the movement of local clean-up groups rolling up their sleeves every weekend to clean plastics, litter and other pollutants from the city’s beaches and waterways. Plastics are collected by volunteers, then cut in pieces […]

Credit Card Compare Names Its First Head Of Marketing
  • Marketing

Credit Card Compare Names Its First Head Of Marketing

Aussie credit card comparison site Credit Card Compare has announced the appointment of Caroline Raffan as its inaugural head of marketing. Raffan (pictured above) has over 10 years’ experience in brand strategy, campaign development, digital marketing, events, public relations, content creation, market research, advertising, stakeholder management, social media marketing, and project management. She joins Credit […]

Why Programmatic Needs To Become A Branding Machine
  • Advertising
  • Marketing
  • Opinion
  • Technology

Why Programmatic Needs To Become A Branding Machine

In this opinion piece, Phil Murrell (pictured below), country manager for Australia and New Zealand at Sizmek, argues that programmatic ad spend needs to move up the branding funnel. When I started in digital advertising way back in 2004, we got our media insertion orders via the fax machine. We relied on that machine to […]

Opinion

by B&T Magazine

B&T Magazine
An Apology To Salmat’s Karen Lewis
  • Media

An Apology To Salmat’s Karen Lewis

Whoops! B&T's stuffed up and this certainly comes with our sincerest apologies for any offence caused.

by B&T Magazine

B&T Magazine
Adland Execs To Be Locked Up
  • Media

Adland Execs To Be Locked Up

Continuing adland's fascination with prison when it comes to charitable causes comes this latest trip to the slammer.

Australian Directors’ Guild Announces Mentorship Winners
  • Campaigns
  • Media

Australian Directors’ Guild Announces Mentorship Winners

Now in its second year, the Australian Directors’ Guild’s (ADG) Commercial & Content Directing Mentorship program announced its next round of eight mentoree recipients. The winners were announced at a special event held last night at FINCH, Sydney and attended by members of the screen and advertising industries. Acclaimed director, and ADG President, Samantha Lang, […]

Diversity Case Study Series: OMD
  • Advertising
  • Marketing
  • Media

Diversity Case Study Series: OMD

One need only look at the Cadbury Favourites chocolate selection to know it has nought to do with industry diversity.

by B&T Magazine

B&T Magazine
Eyeota Deep Dives Into Australian Automotive Purchase Behaviour
  • Media

Eyeota Deep Dives Into Australian Automotive Purchase Behaviour

Eyeota, the global leader in audience data, has today released its latest results on automotive purchase intentions in Australia. The results provide a deep dive into what motivates the buyer and segments those into six different personas.

APN Outdoor Joins The AANA
  • Marketing
  • Media

APN Outdoor Joins The AANA

AANA's annual Christmas dinner and dance got a teensy bit more crowded following this announcement this morning.

QMS Introduces ‘The Lonsdale’ To Melbourne
  • Advertising
  • Media

QMS Introduces ‘The Lonsdale’ To Melbourne

Digital outdoor media company QMS Media has turned on a new premium landmark digital billboard situated in the heart of Melbourne’s CBD. Delivering a commanding presence at the major intersection of Lonsdale and Russell Streets, ‘The Lonsdale’ offers extended dwell times to both vehicle and pedestrian traffic, impacting more than 2.2 million contacts per month. […]

Portrait of a woman looking through out the blinds. Office worker looking through window blinds
  • Opinion

The Lurking Brand Threats Facing CMOs

Treading on gardening rakes and possible alien abduction notable omissions from this CMO threats piece.

Opinion

by B&T Magazine

B&T Magazine
Women In Media Profile: Susannah George
  • Media

Women In Media Profile: Susannah George

B&T is delighted to profile Urbanlist supremo Susannah George who, we understand, is not related to George Brandis.

by B&T Magazine

B&T Magazine
Ikon Lands Avis Budget Group Account
  • Advertising
  • Marketing
  • Media

Ikon Lands Avis Budget Group Account

B&T chooses and recommends Avis and John Karandonis shoes. Hang on, that was the end of Sale Of The Century.

by B&T Magazine

B&T Magazine