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by The Newspup

on Aug 27

Wesfarmers' improved consumer experience pays off

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Coles has annouced that its customer-focused store redesigns have paid off with impressive figures, but where have they come from and where are we going? Kevin Moore, CEO of Crossmark, offers his opinions.

“With Coles annual growth rate reported at 7.3% like for like, just 0.6% behind Woolworths, what we’re really seeing is the fast transformation of a tired retailer.

Beyond the numbers, what we’re really seeing is the results of shoppers interacting in new Coles shopping environments, ones that until recently were in desperate need of some clarity and loving.

Coles is now giving shoppers a better experience as each week passes.

Remember the old days when Coles stores were a little dull? There may as well have been guards at the gates so big were the security barriers at the entrance. And in some stores if you walked back through them an alarm went off! Anyone could have been forgiven for feeling guilty before they event entered a store!

Then there was the cluttered environment. Busy shelves, messy aisles, and messy POS.

And who was Coles anyway? Can you even remember its previous slogan in the shadow of Woolworths the ‘Fresh Food People’ a consistent and well- lead brand that offers its customers ‘fresh ideas’ and whose stores have been brighter, fresher looking and are still positioned as the destination for buying fresh groceries.

Coles has been on a path of recovery. It’s been playing catch-up, but at a far faster speed than anyone expected. But how has it done it?

A few key areas of change are evident in Coles stores today - even before you enter a store. Let’s start with what’s obvious before we enter: the tag line ‘Coles, it all counts.’ While Michael Luscombe's team at Woolworths has launched a re-brand, further ensconcing its positioning in shoppers minds as the leading fresh grocer, Ian McLeod and his team wasted no time in his tenure to quickly position Coles as a value destination. The ‘it all counts’ has successfully been incorporated into every piece of customer communication, from TV advertising to website, catalogue and in store signage and dockets.

Then there’s Coles’ brand-new event driven strategy, illustrated by its successful campaign ‘Feed your family for under $10', hosted at present by celebrity chef Curtis Stone.

On walking past your local Coles it’s hard not to notice the smiling chef’s message and succulent food images – and that draws us customers.

They’re also navigated around the store by more event signage, making the shopper experience helpful, efficient and inspirational.

But while you were being wooed by Mr Stone, did you even notice that you entered the store via new wider, barricade-free aisles? I bet you didn’t stop to think. You would have brushed through and into the store more quickly, easily and without hesitation.

No longer does Coles seem guarded and therefore uninviting. On the contrary, you are invited into the store and, what’s more, even greeted at the entry by brilliant displays of bright, fresh flowers.

This is all a significant shift in shopper experience.

And the overall in-store experience is also on the up. In new store formats shelving is lower, aisles appear wider, floors are clean and clutter-free, lights are brighter and pricing is clearer. It’s all evidence of the concerted effort the store is making to differentiate itself from other retailers.

Clearly it’s working and at a time when more retailers are offering us more shopping environments and choices than ever before. As the market sees a boost in competition with the entry of Costco, plus ALDI's and IGA's continuing expansion, retailers will increasingly focus on the areas where they can add value for their own shoppers. They’ll keep them coming back with a shopping environment that these regular shoppers love.

Never forget that Australia, like the US, is a growth market. We have more people arriving each year, spending more money each year. That's why we remain attractive to our traditional retailers, are a good incubator for innovative growth players like JB HiFi, and are becoming more attractive to new international entrants.”

With a much more exciting retail environment developing domestically, only time will tell whether the consumer focus will be enough to combat the growing new competition and old rival.

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2 Comments

Lynton
  • Wrote on 28 Aug, at 01:00PM
Coles...it all counts...sounds very similar to anybody familiar with Tesco...every little bit helps.

I see very little imagination and a real and unique strategy behind the 'new' Coles value proposition. Aldi, IGA and Costco are already positioned as cheap if not value providers. Surely they could have played into a new space not based on Woolworths 'fresh' - how about giving customers quality, first class service, engaing sore environments, innovative retail and aisle technology, community interaction and just plain old trying to give customers what they want???

Customers want more than the tired and repitive price cutting strategy. And who doesn't promise 'value' right now??? That is not how you build a brand. Everyone can dicount and take the low hanging fruit.

But value shouldn't just mean low prices, bargains and discounts, its also about paying more if the customers percieves that their needs, expectations, desires and wants are being exceeded more satisfactorily than what the competition has to offer - a competition of one when both players have nearly 80% of the grocery market.

Where is the added value or indeed the real value in 'it all counts' when I don't see the Coles brand delivering this to current and potential new customers???

Woolworths and Coles have identical pricing and are always discounting, as this is standard weekly or monthly price promotion and stock clearance strategy. and Woolies have done this for years and still make billions in profit.

I just don't see the value proposition changing a hell of a lot yet - all I see is less choice (SKU's have been cut by a third) and a lot more store brand products which are indeed cheaper and becoming more prevalent. These goods have also generally improved in terms of quality, and have now moved into specialty areas and not just generic items anymore.

The Coles supply chain still needs a heap of work and the store experience still leaves a lot to be desired from a customer service and experience viewpoint.

Things are getting better (they had to, coming from such a low base) but investment in the Coles store footprint, design and space, and a clear, compelling, relevant and differentiated brand proposition I am yet to see.
MIchelle
  • Wrote on 4 Sep, at 05:01AM
I think you're missing the point...."it all counts" is more than a price driven strap line....I think it all counts what you put on the dinner table each evening and the fact that Coles are offering recipe solutions certainly helps me feel like a putting a better home cooked meal on the dinner table (regardless of price!)

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