Many would know of Woolworths as Australia’s largest retailer but does this mean the throne isn’t being hotly contested? Although Woolworths has a large market share, infrastructure and experience in the retail game does not mean the company shouldn’t be keeping up to date with the most relevant market research.
Morgan Stanley Research surveyed 1500 customers and found a shift in the market. This primary analysis finds that what you would think is the most desirable market segment to target is being missed by Woolworths. 44% of customers surveyed rated value for money as being the most important factor in selecting a supermarket. This increased from 39% two years prior (2013). This is a significant shift in the market. Did Woolworths have their finger on the pulse? Should they have found this information out earlier to target their products to this market. There is a fair bit of market research to suggest that supermarket loyalty isn’t strong among the consumers. Recent galaxy research survey suggested 9 in 10 Australia would switch retailers with the average shopper requiring a 38% savings and 14% of consumers saying any savings would be enough to motivate a move. The retail market is so competitive and it’s important for market research to be conducted. It’s important to know your current customers and your potential customers. Aldi saw a market for them in Australia that clearly wasn’t being provided. Another study from Roy Morgan Research has showed an increase in Aldi’s market share from 11.6 in March 2015 to 12.1 in December 2015. Whilst Woolworths dropped from 38.5 to 37.3 through the same period.
We’ve identified cost as a major influence on Woolworth’s declining market share but let’s see what else we can find. Do consumers like self-service checkouts? I sure hope so because 70% of Woolworths 976 supermarkets have them. With an article like ““Why Aldi thinks self-service checkouts are a stupid idea” it’s clear to see Aldi’s stance. It might be worth Woolworths conducting some market research on this area…
The author of the following article “These two photos taken 5 minutes apart show why Aldi is such big trouble for Woolworths” shows an interesting observation. It might not be big data but it does support Aldi’s suggestion that checkouts aren’t a great idea. It’s clear to see from the two pictures (taken 5 minutes apart at Woolworths and Aldi) that the Aldi customers will still happy to wait in line.
I believe Woolworths is in a position where their marketing research should continue to better understand their consumers. Surveys might indicate what consumers believe they value however their behaviours could be different if put in a different circumstance. They need to continue to test which brands consumer can do without. This type of experimental research to identify relationships between brands and shopping behaviour will allow Woolworths to further grow their private label and thus reduce prices and aim to gain back some of that market share. One thing we can all learn from Woolworths current position is that no matter how large or profitable the company is market research is vital to stay competitive in the business world.
student no: 212249729