Woolies tells brands to freshen online displays

Woolworths is encouraging grocery suppliers to improve their brands’ attractiveness when displayed on its websites.

Woolworths CEO Brad Banducci

Woolworths is encouraging grocery suppliers to improve their brands’ attractiveness when displayed on its websites as the coronavirus pandemic and home isolation drive a record boom in online shopping.

The supermarket group’s digital arm, WooliesX, has sent to ­suppliers fresh guidelines for the way their products should be featured online, ranging from imaging, health star ratings, in­gredients and country of origin, as Woolworths accelerates its digital strategy and rallies grocery manufacturers to come on board.

And in a sweetener to its army of suppliers, Woolworths has let them off the hook for the latest monthly appraisal and “Supplier Partnership Tier” review that is linked to sales performances of their products, given the volatility witnessed over March and April.

Woolworths chief executive Brad Banducci last week signalled that the retailer would be pulling forward its investment in its digital and online operations at a time when consumers are isolated at home due to the health crisis and increasingly turning to their laptops and mobile phones to shop.

This is highlighted by recent digital traffic showing that over the past seven weeks Woolworths recorded 62 million visits to its website and app, 2.6 million views of its recipe pages and an unprecedented 162 million page turns of the Woolworths digital catalogue.

Now Woolworths grocery executives and its WooliesX digital business are following up with suppliers, reminding them it is more important than ever to have their branding on point and curated to the online world where customers are especially demanding more product information.

In a lengthy letter and presentation sent to suppliers, and ­obtained by The Australian, suppliers were reminded that the coronavirus pandemic had swept in big changes to shopping trends that grocery manufacturers must be cognisant of and adapt their online branding to.

“As the current trading environment continues to be ­influenced by the challenges brought by COVID-19, we continue to work to return to a ‘business-as-usual’ approach so that we can better support our continued commitment to you along with our mutual customers,’’ wrote Woolworths director of buying Peter McNamara and Woolworths director of fresh foods Paul Harker.

“As we continue to see a significant increase in customers shopping online, it is more important than ever we make it as easy as possible for customers — particularly those not familiar with shopping online to find and select the products they want to purchase.

“Therefore it is important to have new products set up and images right the first time. We encourage you to have images of your products set up to ensure your images online are accurate and up to date.’’

In the midst of the health crisis, online shopping has emerged as a key sales driver for the major ­supermarkets, with Woolworths last week in its third-quarter sales update revealing that online shopping was booming.

Total online sales across Woolworths rose 34 per cent to $817m, while digital traffic in March more than doubled to 38 million visits and active app usage increased to 1.2 million users.

Mr McNamara told The Australian that with so many customers shopping and researching products online — many for the first time — Woolworths was looking for suppliers to ensure they had the most up-to-date product imagery and information available for customers.

“Whether it be in-store or online, we want to make it as easy as possible for our customers to shop what they need at Woolworths,” Mr McNamara said.

Mr Banducci believes the improved digital offering from Woolworths, from food to liquor and general merchandise, is well placed to benefit from current shopping trends.

“It is what our customers want. They want it in food, they want it in drinks and discount department stores, and everyday needs. It is always important we give the customers what they need,’’ Mr Banducci told The Australian last week.

Meanwhile, Woolworths has also told its suppliers the normal cycle of product reviews will be placed on hold for now given the huge volatility in trading seen since March that was caused by panic buying.

“Supplier Connect Scorecards for the March trading period are due to be released soon, along with quarterly Supplier Partnership Tier updates,’’ Woolworths told its suppliers in a recent letter.

“Given there are many variables outside of our suppliers’ control, for this quarter we have made a decision to not enact any Partnership Tier changes and release the scorecards with the updated performance data so everybody understands the landscape. We’ll assess next quarter in the coming months as the situation unfolds.”