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Woolies looks to monetise its customer data

Woolworths has unveiled its plans for Cartology, a standalone media business inspired by US retail giants Target and Walmart, which it announced in May.

Speaking at a launch event in Sydney on Tuesday morning, Woolworths’ managing director and CEO Brad Banducci and Cartology managing director Mike Tyquin said the business will leverage customer data to allow suppliers to better engage with consumers along the path to purchase.

This will include digital out-of home advertising, as well as promoted products on Woolworths’ e-commerce sites, with Cartology placing brands at the top of search results on Woolworths Online and as early as next week.

“Australian shoppers are searching Woolworths online platforms for grocery products more than any other digital platform,” Tyquin said.

“Through Cartology’s ‘Promoted Products’, brands will have the ability for increased ‘on-shelf’ visibility in the digital shopping environment, making it easier for customers to discover new and relevant products.”

The media business will also roll-out digital screens at the front of every Woolworths supermarket across the country from September with relevant, engaging and timely messaging specific to the store that can be easily updated.

“We have the ability to reach customers everyday with personally relevant messages via our unique programs and our owned in-store, digital and social media channels,” Tyquin said.

The ‘Woolworths Screen Network’ is expected to be completed by the end of the year and Cartology will also include performance tracking to assess campaign effectiveness.

Woolworths managing director and CEO Brad Banducci said customers needs are changing but called it an “amazingly exciting” time for the industry.

“We’re no longer competing in our shop, we’re competing in the home, a dramatic change has taken place,” he said.

He said that while Woolworths number one asset has always been its store network, digital and the data collected through its Rewards programs is now just as important.

“Most importantly with those Rewards programs, we’ve got the data and purchase history of our customers,” he said.

“The big difference in retail is, we don’t always have the most profound data on our customers, but we have the most data in terms of frequency because people shop with us two to three times per week and we understand what they are looking for.”

On an average month about 15 million people log on to Banducci said.

“In the next three years, more people will touch us digitally, come to our digital shop, than go to our physical shop.”

He said that while Woolworths has “amazing reach”, its assets are changing, what customers want is changing and how the retailer manages this must change too.

Banducci also said the possible demerger of its drinks and hospitality businesses will not impact Cartology.

“If we go to the demerger we will still hold the major investments in Endeavour Group anyway, however, we would like to think that the commercial arrangement between Cartology and Endeavour would stand on its own two feet,” Banducci said.

“For the next 12 months it will definitely be business as usual and I would like to think post [a derger] that would continue to be the case.”

Cartology is replacing Woolworths previous media selling model, bringing together approximately 50 team members from external agencies Quantium, 1:1 media, TMS Australia and the Media Hub.

This story first appeared on sister site, Inside FMCG.

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