Trimester 1, 2012
Virtual Shopping moves into grocery aisles
Dr. Ho Yin Wong
Sameer A Shaikh
Gurbir Singh Gill
7 May 2012
Table of Contents
| Page No
| The environment, research and behaviour
| Segmentation, targeting and positioning
| Impact on consumer behaviour
Virtual shopping and online grocery shopping are upcoming trend in the retail Industry of Australia. The aim of the case study is to analyse the recent introduction of virtual shopping by Woolworths, hence suggesting what marketing approach and strategies to be followed for making profitable sales through that area. Woolworths is amongst one of the Australia’s leading retailers. The maximum revenue generated through online shopping is by the Woolworths online groceries, but the company also sells online through Dick Smith and Big W. The company’s Big W brand deals with general merchandise and the Dick Smith operates in electronic goods. In the year 2009-10 the management of Woolworths declared that the total revenue form the online channel has grew by 58% (Ian Mac Gowan, 2012). Moreover, during the financial year ended June 2010 $51,784.8 million (approximately $45,669 million) of revenue were noted, which was a rise of 4.2% over FY2009. Also, the operating profit of the company was accounted to $3,082.1 million (approximately $2,718.1 million) in FY2010, again an increase of 9.5% from FY2009. In FY2010 the recorded net profit was AUD $2,020.8 million (approximately $1,782.1 million), an increase of 10.1% over FY2009 (Data Moniter, 2011). Woolworths has even declared that the company plans to hit the $1billion mark in online sales by 2014 (Herald Sun, 2012).This massive growth in the company’s online sales attracted us to research on the Industry and especially on Woolworths. The report discusses the role of the environment, research and consumer behaviour with regards to virtual shopping. Also, we have discussed different market segments, two main segment that contribute maximum in the sales of online shopping and the segment that Woolworths should focus largely to increase their sales. Moreover, factors that affect a customer in shopping online are explained and considering these factors, decision should be made to increase the growth in this online shopping sector.
Online shopping is the upcoming trend. It means buying of products online with the use of internet on computers, laptops, mobile phones, tablets and other IT resources. All financial transactions take place online and the products are delivered to the consumer within given time slot. Woolworth established since 1924 is one of the biggest retailing giants of Australia.It owns various divisions of supermarkets, petrol and consumer electronics. As it has strong presence and good brand value in Australia it aims to promote itself in the online grocery shopping business and do it efficiently in view of the competitors already present in the market. Woolworths is also has many other brands sellers like BIGW discount department stores, Dick Smith which offers consumer electronics, Woolworths/Caltex alliance providing petrol, Powerhouse and Tandy and Hotels having an active achievement program (Investsmart, 2012) Since past few years sales through online shopping has grown rapidly in Australia. But, with the changing trends it is observed that people use more mobile phones and tablets than desktops which accounts for the internet traffic coming largely from mobiles phones and tablets. To get the benefit of this Woolworths has introduced a virtual grocery store at Flinders street market in...
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