Woolsworth and Amazon Assignment Help

Woolworths and Amazon customer loyalty

“Customer is king” how many times have we heard this phrase? The reason we hear this is a lot is simple that your product needs to be sold and the customer is the one buying it. Amazon’s international popularity suggests its loyalty is higher than any other online store and 83% food retail executives (according to a survey) say that amazon is the biggest threat to traditional grocery stores (Redman, 2018). All this suggests that other online store are not considered that big a threat, the reason for that is amazon’s customer is loyal. How to make sure your consumers are loyal? This is key to retaining a good market share.

To understand consumer loyalty we have to look at the consumer decision-making process.

Problem recognition is when the consumers learns that he/she needs a certain product after that the information search begins in which the consumer starts to search where to buy the product this search generally includes the quality, the price and the ease of purchase. After gathering the data the consumer evaluates the alternative products (or platforms where he/she could purchase the same product from) to choose the most suitable option and then the all-important purchase takes place, the process does not end here once the product is purchased the consumer evaluates how satisfying the product is and if the consumer is satisfied he/she will be more willing to come back to the same store to buy the same product (Marshal, n.d.).

Now that we know the general layout out of the consumer decision-making process we need to know where to act to get the consumer to purchase our products and make him/her loyal to Woolworth. It is clear that after the consumer recognizes his/her need of a product the information search begins, Woolworth should be on the top of their search list. To do this Woolworth needs to spend marketing budgets to make sure that it is coming on top in the google searches, for example Online store Australia if you click on this link you can see that Woolworth is not appearing on the first page so when a customer searches for an online store Amazon is the first option he/she sees and due to its popularity the customer is almost bound to click on that and order the product from there. Woolworth should be present on the search history on the top and to do this we need to invest in SEO (search engine optimization) marketing, this process takes into account the keywords related to your business and optimizes your name so that it appears on top of a google search that is related to your product or services (MOZ, n.d.). Apart from investing in SEO marketing Woolworth needs to use social platforms to market its product and services so that when people search through the net they can see sponsored ads on their social media feeds. Browser history has enough information to link them to customer’s social media platforms. Algorithm’s work to show people what they inquire about online on their social media new feeds which makes this marketing very efficient (Zorz, 2017). Investing in these options will make sure that you land in the information search of your consumer which means the consumer will be more likely to purchase from you.

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Woolworth’s online contact with customer should be the best so when the customer lands on Woolworth’s page to research for any product he/she should get all the information very easily. Once the purchase is made the quality of the product and the service that the consumer experiences determines whether the consumer will be retained or not. Satisfied consumers lead to loyal consumers and that is what we need to achieve in order to have a significant share of the online store market in Australia.

The idea behind Amazon has changed online shopping, it can be said that Jeff Bezos’s vision of an online store was right on point. His vison included top notch customer service, that is to create a customer base that was loyal to Amazon (Hariharan, 2018). This indicates the importance of a loyal consumer base. Quality control is one measure that needs to be taken to make sure that consumers do not get disappointed and are compensated in full if there is any mistake.  

Woolworth’s online store is very user friendly which is a system that needs to be flawless to create the overall experience of the consumer excellent. Compensation for all negative experiences are necessary because people who have had a bad experience with any service they are likely to speak out about it on social media platforms and to their acquaintances. All these different systems should be linked to together to form a well-oiled machine that consumers can trust.

The difference between Amazon and Woolworth is that Amazon’s brand symbol (logo) is a much more popular one which Amazon has achieved through extensive marketing paired with quality service. Wool worth needs to invest in implanting their logo in the minds of the consumer as a symbol of trust, because according to a survey corporate brand symbolism is one of the factors of consumer satisfaction and loyalty (Anisimova, 2016).  To achieve this Woolworth needs to market its advertisement with a theme of trust in its story line and clear presentation of the logo. It necessary because a logo is a powerful brand recognition tool which instantly creates an image of your brand in the minds of the consumer (Lake, 2018). To make this happen Woolworth would have to increase its marketing budget for the next two years, in 2016 the advertisement budget for Woolworth was $89.7m which was 5% less than in 2015 (Mitchell, 2016). This will have to increase at least 20% – 25% ($107.64 – $112.125m) for the next two years to create a clear increase in presence. Woolworths enjoyed highest profit margins globally in 2013 in the retail industry, to retain the share of the market now it will have to cut down that percentage from 9.3% (2013) to 8.8% to compete with the lower prices that amazon promises to deliver (Battersby, 2013), this will increase the customer base and could present an opportunity to create loyalty going forward.        

Once the consumers are loyal to the brand they will market it themselves and carry the tradition on for the brand for generations to come if the quality of the products and the service remains up to date and top notch. Having a large market share already is not enough Woolworth needs to become a symbol of trust and quality so that this large market share affiliates itself to the online store.

 

 

Woolworths Supplier relationships     

For any business a good relationship with the supplier is key for obvious reasons, Woolworth’s suppliers are tempted to offer better deals to Amazon due to the corporate giant’s reputation. It is a top priority to work on the relationships with vendors and retain the contracts if not create a more attractive one. Amazon has already successfully launched online grocery stores in the U.S and the U.K, where its suppliers are multiple to ensure the system runs smoothly (finder.com, 2018). In the U.S amazon’s households sales are matching up with Walmart’s which shows the success of an online grocery store (Kowitt, 2018). Considering this amazon will look to establish a strong hold on the grocery vendors in Australia in the same manner.

Just like the customer relationship it is important to develop good relation with a few key suppliers, this relationship is cross-functional. To build and maintain a cross-functional relationship supplier relation management teams work with the supplier to create PFAs (product and service agreements) (Schwieterman, 2012). Woolworth needs to look into its supplier relationship management team to sort out the problem. The PFAs created should be more attractive to the suppliers and for the time when Amazon sets itself up as an online grocery store Woolworth needs to take severe measures to ensure good relations with key suppliers in the market. The suppliers are willing to offer better deals to Amazon, which is a big concern for Woolworth and its relation with its suppliers. How to solve this? There multiple steps that can be taken to ensure continued relations with key vendors.

As big a market share as Woolworth will not be ignored by the suppliers so it is key to negotiate post Amazon terms with the suppliers. You cannot stop suppliers from working with Amazon but Woolworth will have to renew its PFAs so that they are more attractive to the vendors. Woolworth could use its platforms to market their vendors to create a better relationship with them, by doing this vendors would get a lot of reviews and it will create more demand for their products which is always in their interest.

Amazon will be a threat to smaller vendors (who provide the same quality product as larger suppliers), this is an opportunity for Woolworth to bring these small vendors on board and build good relations with them. These small local suppliers will be looking for such opportunities and Woolworth joining hands with them could be a breakthrough for them which means they will not expect a lot of terms to favor them more than Woolworth. The management supply team might have to be enhanced to carry out a country wide small supplier relationship building campaign or advertisements can be used to reach these suppliers which will be a less costly method.

Another positive of having local vendors is having roots spread out that link you to the consumer, a local supermarket has its own loyal consumer base and Woolworth can tap into that market through these smaller vendors and weather out the storm that Amazon is bringing in. CRM (customer relationship management) and SRM (supplier relationship management) are quite closely related in many ways. If the customer trusts the supplier they can trust the deliverers and if the relation with supplier is good and the delivery is smooth than the customer is more easily satisfied (Schwieterman, 2012).