Digital Innovation at Woolworths: A Case Study in Customer Retention and Business Growth

This report examines the digital innovation strategy implemented by Woolworths, a leading Australian retailer, to address declining sales and enhance customer engagement. The report analyzes the customer/market problem, the benefits of the innovation, its feasibility, the proposed business model, and critical success factors. It highlights the use of digital marketing, big data analytics, and transparent advertising to improve customer retention, boost sales, and increase workplace productivity. The report concludes that Woolworths' digital innovation strategy has been successful in achieving its objectives and provides valuable insights for other businesses seeking to leverage digital technologies for growth.

Assessment 2

Table of Contents
Executive Summary...................................................................................................................3
Introduction................................................................................................................................4
Main Body..................................................................................................................................5
1. Explanation of the customer/market problem that needs solving and/or the reason the
innovation is required.............................................................................................................5
2. Argument of the benefits to be generated by the idea........................................................6
3. Evaluation of the feasibility of the idea.............................................................................7
4. Discussion of the proposed business model.......................................................................8
5. Critical success factors to be managed during execution of the idea.................................9
Quality of contribution and collaboration................................................................................10
1. Individual student has demonstrated they worked productively in the team, including the
ability to brainstorm with others to generate a viable idea set and to solve project problems
collaboratively......................................................................................................................10
2. Evidence that the individual student has helped the group reach consensus on the most
viable idea to take forward for Assessment 3......................................................................11
3. Evidence that the individual student has been proactive in ensuring the successful
completion of the portfolio of materials for the pitch in Assessment 3...............................12
Conclusion................................................................................................................................13
References................................................................................................................................14

Executive Summary
The report is inclusive of the identification and analysis of the innovation that has been used
by the company in order to gain the competitive advantages in the market. The main aim of
this report is to identify and analyse the issues that led the company to choose the innovative
techniques. In order to complete the assignment the company that has been chosen by the
researcher is Woolworths which is one of the biggest retail companies in Australian industry.
The company not only operates in the grocery supermarket but also in other areas too which
are inclusive of the insurance, bank, finance etc. The main focus of this report is to analyse
the benefits that are sought by the organisation after effective application of the innovative
practices in the organisational structure.
The idea of innovation can be defined as the idea of the company to implement and establish
the new idea that can help the organisation in ensuring that the company analyses to make
and supply breakthrough products and make them accessible to the persons that might require
the same. It should be noted that the company is innovative in nature and has been using the
innovative practices since the year 1990. The company at that time introduced the technology
of pioneer innovation. In the year 2016, company kept its main focus on technology and
innovation system and introduced the innovative practice of marketing innovation strategy.

Introduction
This report is based on the Woolworths which is an Australian retail organisation. The
company provides various products and the services to the customers. Digital innovation
model in terms of the innovative marketing practice is a business idea which is used by
Woolworths to enhance the customer retention and the experiences.

Main Body
1. Explanation of the customer/market problem that needs solving and/or the reason the
innovation is required.
The main reason for application of the innovative practices in the Woolworths was to boost
up the sales which were fallen by the figure of 1.5% in the first thirteen weeks of the year
2016. In order to eradicate the issues and boost the sales of the company, the plan was built
by the CEO of the company Philip Clarke. The main issues were found in the marketing
department of the firm in which it was identified that the marketing plan of the company was
unclear, irrelevant and reportedly unsuccessful. The plan that as then proposed was inclusive
of the six major points and they all were focused towards improving the marketing of the
company, its products and its sales. The objective of application of this plan was to help the
company attract the consumers in a major number and ensure that they are satisfied and their
experience enhanced effectively (Culpan, 2014). In order to ensure the innovation in the
company and to ensure that these practices are abided by in an enhanced manner, the
organisation not only hired an additional staff of 4300 but also gave the training to the current
staff of the company such that the application of innovate strategy could be enhanced.
Another major issue that was faced by the company which led the organisation to adopt the
innovative practices in its marketing department was the lack of consumer’s feedback. It
should be noted that the company was unable to gain the quality feedback of the customers
regarding its products and services which led the company to adopt the innovative marketing
strategies in its business structure.

2. Argument of the benefits to be generated by the idea
It should be noted that by the use of innovative practices in the marketing company was able
to seek some potential benefits in the business environment. The benefits that were derived
from the company after inclusion of innovation have been stated below as follows:
 Customer retention: this is one of the main benefits that were earned by the
organisation after the implementation of the innovation in the marketing strategy. In
this innovative technique, the company choose the method of transparent advertising
which not only helped the organisation to gain the trust of consumers but also helped
in retention of old customers as well. Due to this, the sales of the company rocketed
by the figure of 15% until the end of the financial year 2017. The transparent
marketing helped the customers to know about the actual cost incurred in the
production of products and analyse what is the profit present of the company in each
product. This strategy was innovative in nature and helped the company to gain
customer loyalty in a significant amount (Barrett, et. al., 2015).
 Increment in the workplace productivity: Another major advantage that was
received by the company by the implementation of the innovative practices in the
marketplace is the advantage of increasing the productivity of the employees as well
as of the company as a whole. The marketing practices helped the organisation to
adhere to the need and demands of the public. In order to do the same the innovative
practice that was being used by the company is of the digital marketing. The company
invested heavily in the TV, radio and press platform which not only helped
Woolworths to increase its sales but also facilitate the effective performance of the
employees of the company. It should be noted that the company is now investing
about 30% of its total revenues in the digital marketing platforms. The use of social
media is one of the major techniques used by the company.
 Media customising: Though it has already been stated above that the digital
marketing platforms helped the organisation in connecting with the customers on
media-based platforms it has been identified that the company used the technique of
big data analytics such that the individual experience of the customers can be
enhanced in an effective and efficient manner (Phaal, et. al., 2015). In this technique,
the major focus of the company was on the collecting and analysing the data of the

customers such that the company might be able to use this information in order to
satisfy the needs of the customers.

3. Evaluation of the feasibility of the idea
The effective usage of the digital technology and the innovative services related to the
marketing in Woolworths helps in the development of the effective business plans and the
formulations. This idea also helps in the development of the business promotion and the
technology. This feature helps in the development of effective convenience for the customers
regarding the services and the products accessed by the Woolworths (Nylén & Holmström,
2015). The digitalisation process also helps in the development of an easy and the effective
business practices which ultimately contributes to the business success and the productivity.

4. Discussion of the proposed business model
The digital and the service model adopted in the Woolworths consist of the several stages and
the phases which are provided thereunder:
Key partners: The key partners of the Woolworths are the one which is responsible for the
growth of the business. These partners help in the development of the digital marketing
strategy.
Key activities: The Company basically operates in the retail market sector which covers the
activities such as the advertisements, planning, formulations, etc.
Key resources: Effective resources are required by the business to develop the effective
business model. Herein the key resources used are employees, expertization in relation to IT
and the knowledge of finance.
Value proposition: The effective services provided by Woolworths helps in the development
of consumer satisfaction. Hence the use of digital marketing model helps in the adoption of
the innovative business practices (Phaal, et. al., 2015).
Customer relations: The various tools such as social media help in the development of
effective interaction with the customers.
Channels: The various channel used by the Woolworths is the websites, mobile application
and the networking services.
Customer segments: The segmentation should majorly cover the medium aged group area
which helps in the attainment of profits.
Cost: Effective agreements should be formulated in such manner which helps in the risks and
the costs reduction (Bocken, et. al., 2014).
Revenue streams: The effective use of the digital technology helps in the effective collection
of revenues.

5. Critical success factors to be managed during execution of the idea
The various factors are considered responsible in relation to the execution of the successful
business idea. These are provided thereunder:
Team collaboration: Effective collaboration and the contribution made by the team
members help in the effective execution of the set business idea. Herein if the digital model is
effectively used then this contributes to the business success and the plans (DeMers, 2015).
Strategies: Such tactics and the strategies should be formulated by the business which helps
in maintaining the interests of the customers in the services provided by Woolworths.
Quality services: Such services and the products should be provided to the customer which
helps in enhancing the effectiveness of the business plan and the frameworks.

Quality of contribution and collaboration
1. Individual student has demonstrated they worked productively in the team, including
the ability to brainstorm with others to generate a viable idea set and to solve project
problems collaboratively
It is analysed that the effective teamwork and the coordination help in the effective
formulation of the work accordingly. The effective skills help in the performance of the
working accordingly to the plans formulated. To gain an effective understanding of the
application of business idea it is required to have a complete research on the various aspects
used. This research helps in the accomplishment of the idea and to enhance the growth. The
exercises related to the brainstorming are also considered to be essential in terms of
enhancing the workplace effectiveness. The skills which are learned and developed by the
team are related to the conceptual and the critical thinking. The team working helps in the
solution of the complex tasks and the activities.

2. Evidence that the individual student has helped the group reach consensus on the
most viable idea to take forward for Assessment 3
Herein the effective contribution was made by the team members to generate an effective
idea. This helps in the selection of such a business idea which suits the business. The
effective collaboration and the contribution made by the team members in terms of the
assessment of the tasks help in the solution of the complex tasks. In the same manner, the
assessment 2 is completed and the same process is followed in the next assessments.

3. Evidence that the individual student has been proactive in ensuring the successful
completion of the portfolio of materials for the pitch in Assessment 3
The effective appraisal of the assessment is considered to be effective in terms of the
selection of the best business idea. These assessments provide the discussion regarding the
various acts formulated by the group members. Hence these acts help in the solution of the
issues which have arrived in the earlier assessments. The effective use of the Google is made
to select the business idea for the effective growth and the profitability. This tool provides
with an idea regarding the benefits generated with the use of such a model. The effective
factors which are used in the success of a business idea are also used and have helped in the
completion of the proposal.

Conclusion
It is concluded from the above report that the effective innovation helps in enhancing thyme
organisational efficiency and the growth. The business idea is considered as a major part of
the innovation and which helps in the effective identification of the business problems. It is
evaluated from the report that the use of the digital model has benefited the Woolworths in its
working and the plans.

References
 DeMers, J. (2015). The 10 Most Critical Factors That Dictate Startup Success.
[Online] entrepreneur. Available at: https://www.entrepreneur.com/article/252813
[Accessed: 07 May 2018].
 Culpan, R. (Ed.). (2014). Open Innovation Through Strategic Alliances: Approaches
for Product, Technology, and Business Model Creation. Springer.
 Nylén, D., & Holmström, J. (2015). Digital innovation strategy: A framework for
diagnosing and improving digital product and service innovation. Business
Horizons, 58(1), 57-67.
 Barrett, M., Davidson, E., Prabhu, J., & Vargo, S. L. (2015). Service innovation in the
digital age: key contributions and future directions. MIS quarterly, 39(1), 135-154.
 Bocken, N. M., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice
review to develop sustainable business model archetypes. Journal of cleaner
production, 65, 42-56.
 Phaal, R., Farrukh, C., & Probert, D. (2015, March). Roadmapping for strategy and
innovation. In IEE Seminar on justifying and selecting innovation projects.