Woolworths starts FY21 on a high by recording an 87% jump in total e-commerce sales

A focus on improving the customer digital experience and an increase in network capacity during the quarter are the reasons behind the uplift, the company said.

Woolworths has announced that group e-commerce sales jumped by 87% to AU$1.5 billion during the first quarter of 2021 financial year.

For the period to 4 October 2020, the company achieved total group sales of nearly AU$18 billion, up 12.3% when compared to the corresponding period last year.

"It has been a pleasing start to FY21 with all retail businesses delivering strong sales growth and customer metrics remaining solid," Woolworths group CEO Brad Banducci said. "COVID costs remain material as we continue to prioritise the safety of our customers and team but have moderated as we become more efficient at operating COVIDSafe."

Of the total sales figure, the group's Australian food business accounted for AU$12 billion, a 13% jump from the same 14-week period last financial year that achieved AU$10.7 million. Part of that boost was driven by the 100% quarter-on-quarter increase to AU$962 million achieved by WooliesX, the digital arm of its business.

Woolworths attributed the WooliesX sales growth to the improvements it made to the customer digital experience during the quarter. It highlighted that the average weekly traffic to Woolworth's website and apps saw 11.4 million visits in Q1, up 75.5% on Q1 FY20.

The supermarket giant noted since the launch of its Everyday Rewards app in May, downloads have exceeded 2.3 million. At the end of Q1, Woolworths Rewards reached 12.6 million members.

"Active users and downloads also continue to grow strongly for the Woolworths app supported by smart shopping lists, meal inspiration and enhancements to allow customers to easily activate personalised specials. Customers also continue to use Woolworths' digital platforms to view catalogues, specials, store trading hours, and delivery slots," the company said.

Read: How tech helps with the spike of online retail (TechRepublic)

Woolworths added its e-commerce sales growth was assisted by an increase in network capacity where it saw home delivery slots continue to increase during Q1, where another 44 home delivery stores and 92 contactless drive-through services were rolled out. 

To meet the demand of online grocery orders, Woolworths deployed its first micro-automation technology in the e-commerce facility located at the back of its existing Melbourne-based Carrum Downs supermarket during the quarter.

The supermarket giant claimed to be the first in Australia to deploy the takeoff technology, which has been designed to sort and move up to 10,000 grocery products from automated storage units to team members that are handpicking customer orders.

"As customer expectations continue to rise, we're investing in new technology to keep pace with the growth and focusing on building an ever more convenient online offer," Banducci said at the time of the launch.

"The micro-fulfilment technology in this e-store is a potential game-changer. It will help us deliver unparalleled speed and accuracy in the online picking process while keeping us close to our customers for faster and more flexible deliveries to the home."

Meanwhile, the New Zealand equivalent of WooliesX, known as CountdownX, saw a 50% sales increase to AU$224 million for Q1. This contributed to total sales in New Zealand increasing by 6.9% to nearly AU$1.9 billion.

During the quarter, the retail giant also launched its Big WX business, which saw e-commerce sales accelerate by 175% to AU$104 million. Woolworths said it was the result of its Melbourne stores remaining closed during the period due to COVID-19 restrictions, and customers turning to home delivery and pick-up as options.

Earlier this week, Woolworths announced a partnership with Dell Technologies to bring together its public and private clouds onto a single platform in a bid to improve the way it manages the inventory and support operations of its nearly 3,000 retail outlets. 

Under the deal, the pair will jointly launch a Woolworths group hosting service. The platform will serve as the single system to enable the grocery giant to access mission-critical processes and applications -- such as Kronos Workforce application for HR and payroll management, and Blue Yonder warehouse and transport management applications for the distribution of goods -- through the Dell Technologies Cloud.

The grocery giant had previously signalled it would invest between AU$700 million and AU$780 million in technology and fitouts over the next four years as part of plans to build an automated regional and distribution centre and a semi-automated national distribution centre at Moorebank Logistics Park in Sydney.

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