Detailed Customer Experience Management Analysis of Woolworths

This report provides a comprehensive analysis of Woolworths' customer experience management (CEM). It begins by introducing Woolworths and identifying three key customer segments based on demographic, socioeconomic, and geographic factors. The report then examines customer experience maps, outlining business value propositions for each segment. It emphasizes the importance of customer feedback and explores the application of the IDIC model to foster customer loyalty. Challenges and opportunities facing Woolworths are discussed, followed by recommended CEM strategies to enhance brand perception. The report also covers measurement and evaluation techniques, proposes improved service offerings, and highlights steps towards forming a customer-centric organization. The analysis provides insights into how Woolworths can optimize its customer experience to drive satisfaction and business success.

Running head: CEM OF WOOLWORTH’S
CEM OF WOOLWORTH’S
Name of the Student:
Name of the University:
Author Note:

1
CEM OF WOOLWORTH’S
Table of Contents
Introducing Woolworth’s:...............................................................................................................1
Identification of three customer segments of Woolworths:.............................................................1
Demographic segmentation:........................................................................................................1
Socioeconomic:............................................................................................................................2
Geographic segmentation:...........................................................................................................2
Customer experience maps with business value proposition:.........................................................3
Voice of customer and customer feedback while forming experience strategies:...........................5
IDIC Model towards achieving loyal customer relationship:..........................................................5
Current sales of Woolworth’s challenges and opportunities:..........................................................6
Recommended customer experience strategy towards intended brand perception:........................7
Measurement and evaluation of customer experience:....................................................................7
Proposal for improved services offering and best CEM concepts:..................................................8
Steps towards forming customer centric organization:...................................................................9
Conclusion:....................................................................................................................................10

2
CEM OF WOOLWORTH’S
Introducing Woolworth’s:
Woolworths Supermarkets is an Australian chain of supermarkets with its headquarters in
Bella Vista, New South Wales, Australia. The product line of the super market consists of fruits,
vegetables, meat products, bakery, pantry, freezer, drinks, liquor, pet items, products for babies,
health and beauty items and household products. The supermarket is a subsidiary of Woolworths
Limited which is listed on the Australian Stock Exchange (woolworthsgroup.com.au, 2018). The
company seeks to achieve high level customer satisfaction by providing the customers both local
and international products. The retail chain acquires local products like dairy products and wine
from the farmers in Australia and encourage their revenue generation, thus encouraging
sustainability among the local groups. Woolworths provides discounts and rewards points to its
customers on purchasing products from it to enhance their positive purchase experience. The
main competitors of Woolworths are other supermarket chains like Coles. The aim of the paper
is to study the aspect of positive customer experience creation and management taking
Woolworths as the example.
Identification of three customer segments of Woolworths:
Woolworths uses three approaches to segment its markets namely, demographic
segmentation, socioeconomic segmentation and geographic segmentation.
Demographic segmentation:
The demographic segments which Woolworths serves consists of customers of different
ages, genders and races. The main customers consuming products of Woolworths consist of
young and middle aged customers. However, since the supermarket chain has a separate baby
product section, the customer segments it serves also consists of babies. As far as gender is

3
CEM OF WOOLWORTH’S
concerned, the supermarket sells products both for men and women. The shoppers at
Woolworth’s stores can be from diverse races like native Australians, Asian, Europeans and
Americans. Again, the Woolworths offer special products for festivals like Ramzan which
appeals to the Muslim customers. The appropriate customer persona type applicable for
demographic segmentation is decisive persona because their decisions change dynamically
(Holland & Ramanathan, 2016).
Socioeconomic:
The customers of Woolworth’s can be segmented on the basis of income, occupation,
education and social classes. The supermarket sells both organic food products which are
expensive and ordinary food products. Thus, the supermarket serves both upper and middle class
customers. The supermarket sells a variety of products like energy bars and yoghurt which can
be consumed both by students and professionals which reflect their busy lifestyles (Du Plessis &
De Vries, 2016).. Woolworths sells products like fat free food items and liquors, which require a
lot knowledge from the purchaser. This shows that the supermarket chain segments its customers
on the basis of their education and knowledge levels. The ideal customer persona type in this
case is collaborative. This is because customers always buy products which represent their
socioeconomic conditions like rich and educated customers would prefer buying
sophisticated liquor products and generally collaborate with the sales person to enhance
their purchase experiences. Hence they are known as collaborative customers (Lemon &
Verhoef, 2016).
Geographic segmentation:
As far as geographical segmentation is concerned, Woolworths is present in several in
Australia and Tasmania. The supermarket chain however has weak international presence unlike

4
CEM OF WOOLWORTH’S
its strong competitors like Coles (colesoflondon.com, 2018). This means that it has a weak
geographic segmentation strategy. The ideal customer group persona in this case is relationship
based because big supermarket chains enter several economies. Thus, it is important that they
build relationship with the customers of the host country to be able to sell products to
them.
Customer experience maps with business value proposition:
The following are the business value proposition to appeal to the three aforementioned
customer segments and customer persona. Woolworths should aim to appear transparent while
offering customers according to its first customer segment, the demographic segment.
Figure 1. Customer journey maps
(woolworthsgroup.com.au, 2018)
As pointed out above, the customer persona for this type of segment is decisive and
customers tend to change their preferences owing to availability of multiple options

5
CEM OF WOOLWORTH’S
(Kandampully, Zhang & Bilgihan, 2015). Thus, Woolworths needs to be transparent and offer a
variety of products and offer them at discounts to create value for them.
Middle aged person
Pain points:
Not a large variety of products shown.
Staff members were not supportive
Behavior:
1. Interested in multiple brands.
2. Changes trends and likes frequently.
Goals:
Consuming a large variety of products according
to their conveniences and financial capability.
The second type of segment consist of socioeconomic segmentation where the customers
collaborate with the marketers while purchasing products. Woolworth’s in order to create value
for this segments should use appropriate marketing mixes to achieve satisfaction of the
customers. For example, while serving upper class customers, Woolworths should use premium
pricing and offer premium products (Kumar & Reinartz, 2016). This would create more value for
the customers and enhance their product purchase experience.
Doctor, high net worth income
Pain points:
Sales staff having low product knowledge
Behavior: Goals:

6
CEM OF WOOLWORTH’S
1. Interested in premium brand.
2. Consumption pattern less variable.
3. Collaborates with sales staffs
4. Gets involved in purchase and has
deep product knowledge.
Consuming a premium products
The third segments of customers consists of geographically segmented customer with
relationship persona. Woolworths in order to strengthen its brands in these markets should adopt
its international goods according to tastes of the local customer base so that they can relate to it.

7
CEM OF WOOLWORTH’S
Different host countries
Pain points:
Lack of products matching local conditions like
weather
Behavior:
1. Interested in brands with local appeal.
Goals:
Consuming a international products adopted
according to local conditions
Voice of customer and customer feedback while forming experience strategies:
Woolworths must consider the voice and opinion of customers in order to form customer
experience strategies. It must incorporate the feedbacks of the customers like their preferences
which they express on the social media websites into its future business strategies. It can also use
customer feedback obtained from market research methods like surveys and add them in its
future products. This would enable the supermarket chain to ensure positive customer experience
(Blázquez, 2014).
IDIC Model towards achieving loyal customer relationship:
The IDIC model (Identifying, differentiating, interacting and customizing) seeks to attain
customer satisfaction and create positive relationship. Woolworths must identify the needs of the
customers to enhance their purchase experiences. Then they should try to create product
strategies in tune with these preferences to differentiate itself from its competitors. The sales
staff must interact with the customers and bring about customize the product offerings in terms

8
CEM OF WOOLWORTH’S
like pricing and product bundling to create positive customer purchase experience (N. Bolton et
al., 2014).
Figure 2. IDIC Model
(Source: N. Bolton et al., 2014)
Current sales of Woolworth’s challenges and opportunities:
The current condition of the retail giants of Australia is not up to the mark and that is why
the company has been facing a lot of challenges and problems that they are gradually facing
tough to overcome. There has been a major overhaul being planned by the management of
Woolworth’s for which a predicted 500 jobs will be cut. The supermarket chain plans to shut
down the underperforming stores and restore the operational performances of the existing ones to
attain the highest profit and provide tough competition to its nearest rivals (Orel & Kara, 2014).
Though the management of the mentioned company has been trying hard to make a good picture
about the improvement in their customer satisfaction levels, the organization has miserably failed
to do so. A recent customer satisfaction survey carried out by a totally neutral agency has
published reports that do not give a good picture. The survey was conducted upon a huge number
of participants and it showed that most of the shoppers were dissatisfied with the services of

9
CEM OF WOOLWORTH’S
Woolworths. The absence of a proper restructure policy has been devastating enough for the
success of the organization. Therefore customer satisfaction in the sales category is the main
challenge for the mentioned retail outlet.
Apart from the number of challenges faced by the business organization Woolworth’s can
use its strengths as its opportunities to attain huge success in the market. According to, Orel and
Kara (2014) the large market base and its extensive presence in Australia is one of the greatest
opportunities for the company to gain a considerable market by means of extensive
advertisements and promotional policies. Apart from this the company can also seek growth
through new strategic acquisitions and franchise models in the new and emerging economies of
the world.
Recommended customer experience strategy towards intended brand perception:
The mentioned supermarket chain of Australia uses the customer experience in an
effective way to increase the brand awareness for both the stores as well as the different products
sold by the stores. Though Woolworths suffered a setback in such strategies some years back,
but it has quickly innovated a new way to gain the attention and the reputation of the customers
accordingly (Lemon & Verhoef, 2016). The main aim of the business is to increase their
preference by means of word of mouth recommendations. Such strategy helps the company to
gain popularity and increase their sales. It also helps to grow a positive customer relationship
management for the organization. For delivering successful competitive advantage and customer
value the company must embrace on a journey of transformation rather than step by step gradual
change. Thus customer experience strategy must be implemented in a proper and efficient
manner to gain in the future.

10
CEM OF WOOLWORTH’S
Measurement and evaluation of customer experience:
A wide range and variety of tools are available for the measurement of customer
experience and thus the professionals of the industry have to decide on which tool to use and
what is the most appropriate and efficient for the following retail business. The six different
benchmarks for the measurement of the retail customer experience in Woolworths are as follows;
1. Effectiveness- The amount of Value Woolworths provides to the customers
2. Emotion- The goodness quotient of the customers inside one of the stores of Woolworths
3. Retention- The likelihood of repeat business
4. Enrichment- The level to which the customers of the organization will be buying
different additional products and services
5. Ease- How much easier it is to interact with the operators of the store by the customers?
6. Advocacy- Whether or not the customers of Woolworths will share their valuable
experience through different sources of media or word of mouth.
Some of the main ways by which customer satisfaction is measured includes the likes of;
1. Revenue Tracking and forecasting
2. Customer Response boxes in the stores
3. Online Surveys
4. Face to face interactions
5. Employee feedbacks

11
CEM OF WOOLWORTH’S
Proposal for improved services offering and best CEM concepts:
As mentioned earlier the customer experience policy is one of the main elements that
determine the success of the business in the market. Some of the main ways by which the
management of Woolworths can create an effective customer experience policy are as follows;
1. Creating a clear customer experience vision- The Company must have a set of customer
experience vision ready to be implemented in the organization. The points of the
following set of strategies must be well known to each and every employees of the
organization.
2. Understanding the customers- The management of the organization must employ the
able people who communicate with the different types of customers in the store. A proper
and effective communication is the key to the understanding of the needs and wants of
the customers (Lemon & Verhoef, 2016).
3. Capturing the Customer Feedback- It is important for the organization to get a clear idea
of the needs and wants of the customers by means of a customer feedback program. The
presence of a proper customer feedback program helps in the development of the
products and delivery of the exact kind of services that suits the customers.
Steps towards forming customer centric organization:
There are lots of ways by which the management of Woolworths can restructure them to
a customer centric organization. Some of the main such steps are;
1. Having a clear and customer centric vision- Redesigning the organization will help the
management of the mentioned retail giants of Australia to put customers in the centre of