Australia’s largest supermarket chain, Woolworths, is looking to increase its relevance to consumers through a new online marketplace it launched this week. Everyday Market sits within the Woolworths website and complements its food and grocery range with a selection of products across household, baby, toys, pet care, health, and beauty. Many Woolworths-owned businesses are Everyday Market partners, including Big W, Healthylife, and PetCulture. Brands like Russell Hobbs, Nutribullet, Dys
t, Dyson, Barbie, Fisher-Price and Vetalogica also feature.
“We’re starting with a small group of partners and it really is just the beginning,” Woolworths general manager, Everyday Market, Lance Eerhard said. “We have ambitions to more than double our range and offer tens of thousands of products to our customers over time.”
Endless aisle strategy
As the largest online food and grocery retailer in Australia, Woolworth reported annual sales of more than $3.5 billion in FY21, an increase of about 75 per cent on FY20. It’s undoubtedly a good time for the giant to flex its online capabilities.
Retail expert and Queensland University of Technology professor of marketing Gary Mortimer believes Woolworths is tapping into an endless aisle strategy, which Walmart and Kitchen Warehouse have adopted previously, but is doing so a little differently.
“We often see these endless aisles via a form of omnichannel retailing,” Mortimer told Inside Retail. “There’s a kiosk or digital platform at the end of each aisle, which enables customers to order other products that aren’t available in store.”
The benefit for Woolworths, he said, is that it can have its best-selling products in store while giving consumers the opportunity to access smaller brands, local products, online that might not be viable for a national rollout in stores.
A rival for Catch Group
While many have suggested that Woolworths is trying to compete against e-commerce giant Amazon, Mortimer doesn’t see it that way.
“I don’t think that’s the case,” he said. “I think Woolworths is trying to create greater customer value by offering products that aren’t readily available in its stores, while at the same time providing an opportunity for smaller brands to connect to those Woolworths customers.”
The Everyday Market could be a threat, however, to the likes of Wesfarmers’ Catch Group, which offers Target and Kmart products, among other brands, and is in the process of rolling out K Hubs around Australia.
“Woolworths’ Everyday Market is almost like a Catch Group, but at the very early stages,” Mortimer observed. He thinks Woolworths will start out by targeting its supermarket and Big W shoppers before widening the net.
“Once a customer is loyal to a particular marketplace, the purchasing becomes quite repetitive, and they gain that level of trust. Initially, [Woolworths will] try to grow this business with its own customers and, eventually, as more brands come on, I would imagine we’ll see lots of competition among the likes of Woolworths’ Everyday Market, Wesfarmers’ Catch Group, Amazon and eBay.”
Big platform for small businesses
Woolworths is hopeful that the marketplace can help partner brands grow their business by opening up access to the 12 million users that visit Woolworths’ website and app each week.
Australian reusable nappy brand Designer Bums and eco-friendly baby care brand Joonya are among the small businesses that have signed on as Everyday Market Partners.
Designer Bums director and owner Carla Schwef sees a huge opportunity in grocery to target parents who are looking for sustainable alternatives.
“Reusable cloth nappies have been growing considerably in popularity in recent years and the attitude towards more sustainable alternatives is changing. It’s exciting to see they’re now beginning to become mainstream,” Schwef said.
While babycare is a big focus for the launch, Mortimer expects more categories and brands to come onboard as Everyday Market scales up.
“Essentially, that’s how Amazon rolled out here in Australia. It started with a small range and eventually brought new categories onboard. Potentially, they’ll introduce a liquor offer as well at some point.”
As for delivery, customers can buy as many items as they want for a flat $10 shipping fee and there is no minimum spend required. Each Everyday Market Partner will be responsible for shipping its products to shoppers.