Woolworths builds supplier ties by sharing consumer data

Woolworths will give its suppliers unprecedented access to its goldmine of customer data.

Woolworths chief executive Brad Banducci. Photo: Adam Yip

Woolworths will give its suppliers unprecedented access to its goldmine of customer data, harvested from shoppers each time they pass through the checkout, as part of an overhaul of their relationship that will touch every aisle of the stores.

As part of chief executive Brad Banducci’s objective to build a customer and store-led culture at the nation’s biggest supermarket chain, Woolworths has developed a new linkage with its suppliers called “Supplier Connect” that will help direct the flow of customer data.

The portal was launched to a first group of 100 suppliers on ­October 27 and will now be rolled out to most of the suppliers by the fourth quarter of 2017, The Australian can reveal.

The Supplier Connect portal will include an enhanced feed of data from the nation’s largest data analytics firm, Quantium Group, which is 50 per cent owned by Woolworths and is used by many retailers to sharpen their customer offers.

A letter sent by Woolworths head of buying Steve Donohue to suppliers and obtained by The Australian unveiled the plans that the ­retailer has to share customer data with grocery and food manufacturers in the hope it will help better connect brand owners with their end customers.

The overtures come as both Woolworths and rival Coles have fought allegations in recent years that they squeezed their supplier base as well as claims that Woolies would push through unfair changes to supply contracts, including contracts ­already agreed and signed off.

Just before Christmas, Woolworths beat the Australian Competition and Consumer Commis­sion in a case brought by the regulator accusing it of unconscionable conduct over its “Mind the Gap” scheme, which the ­retailer used to help plug a $50 million hole in its profits.

Since being appointed chief executive in February, Mr Banducci has sought to improve relations with suppliers as a key pillar in his transformation of Woolworths that will improve its offers to ensure the type of groceries in demand by customers are on the shelves.

It will require Woolworths to work more closely with its supplier base and a sharing of customer metrics, a point made by Mr ­Donohue in his letter.

“Our new ways of working have been developed over the last nine months with significant input from a number of our suppliers,” he wrote.

“This engagement has enabled us to deliver a program that we are proud of. The key principles ­behind the development of Supplier Connect are: increased transparency, consistency and a focus on customer centricity.

“All of which I believe are ­important elements of successful trade partnerships.”

Mr Donohue said Supplier Connect would use a fact-based and consistent approach to measure and recognise supplier performance, deliver a more struc­tured approach to supplier engagement as well as better customer data from Quantium.

“The success of Supplier Connect is dependent on changing our ways of working to enable transparent and consistent engagement both on a daily basis and in the creation of medium to long term plans,” the letter said. “Our aim through Supplier Connect is to create an environment conducive to delivering mutual outcomes that will ultimately benefit our customers”

Woolworths suppliers will be able to gain access to periodical data from Woolworths and Quantium and will also be able to order premium data packages from the analytical firm if they wish. Woolworths believes it represents the biggest change to its relationship with suppliers in many years and will give them ­unprecedented data to better understand their customers.