​Woolworths eyes new technology for next phase of growth

Woolworths believes the implementation of technology, including a new analytics tool, will help it restore sales momentum.

Bringing in new technology and enhancing its understanding of customer analytics are tools that Woolworths believes will help it reach a "new era of growth".

During its half-year results for the 2015 financial year, the company provided a progress update on its strategic plans. Part of this highlighted the fact that the company will use technology developments to enhance efficiency as it makes progress in the transformation project of its supply chain, dubbed Mercury 2.

To provide further support on the project, the company appointed Matt Stanton as chief transformation officer during the half year.

"During the half, we accelerated cost-reduction initiatives and are driving greater efficiency through the early stages of Mercury 2. Implementing further cost-reduction initiatives across the business will be a key focus for the second half of FY15 and beyond," said Woolworths CEO Grant O'Brien.

The company said it also plans to better understand its customers through the launch of its customer insight tool, Checkout, to a range of trading partners.

Woolworths reported on Friday that it managed to lift sales by 1.8 percent to AU$32.4 billion during the half-year period. However, the company expressed that it is still not satisfied with its sales performance, but believes investments in its Australian supermarket business will help it restore sales momentum.

The company also recorded that earnings before interest and tax were up 4 percent to AU$2,129.2 million, and net profit after tax grew 4.7 percent to AU$1,384.1 million.

Additionally, the company said it managed to cement its position as Australia's largest domestic online retailer, reporting that online sales increased more than 20 percent on the previous half year, and were AU$1.4 billion in calendar 2014.

"We continue to lead the market in innovation, having launched 'Dan Murphy's Connections' and 'Simply Collect' partnership with eBay," O'Brien said.

Earlier this week, the company announced a strategic partnership with eBay to enable eBay orders to be delivered to selected Woolworths and Big W stores, to become pickup points for eBay customers.

O'Brien added that while the company is on track to meet its guidance provided of net profit after tax of 4 percent to 7 percent in FY15, it believes that additional investments will impact its second-half FY15 results, and has amended its guidance to be between 1.8 percent and 6.6 percent.

"The investment in Australian supermarkets will span all aspects of the customer offer and will be funded in part by a pipeline of cost savings in excess of AU$500 million, which we are currently building," he said.