Woolworths: Digital Business Management Report - Amazon Competition

This report addresses the challenges Woolworths faces in the Australian grocery market due to Amazon's disruptive entry. The report identifies two key issues: poor online customer service and insufficiently trained corporate staff. To address poor online customer service, the report proposes implementing Artificial Intelligence (AI) technologies like chatbots to improve customer support, enhance the online shopping experience, and address customer queries promptly. The implementation plan includes research, identifying development areas, hiring experts, pilot projects, and system incorporation, with a detailed budget and timeline. For the issue of insufficiently trained staff, the report suggests employee digital training programs. The proposed solution includes AR/VR knowledge acquisition, microlearning, on-the-job training, and social learning. The implementation plan provides control measures such as knowledge acquisition tests and performance evaluations, along with a budget and timeline for the training program. The report emphasizes that digital transformation requires changes in employee behavior and skills to enhance online processes and customer service. The report provides insights and recommendations for Woolworths to improve its digital presence and compete effectively with Amazon.

DIGITAL BUSINESS MANAGEMENT

Table of Contents
Issue 1: Poor online customer service........................................................................................3
Description of issue................................................................................................................3
Description of solution...........................................................................................................3
Implementation plan and control............................................................................................4
Budget and timeline................................................................................................................5
Responsible person for plan implementation.........................................................................6
Issue 2: Corporate staff insufficiently trained............................................................................7
Description of issue................................................................................................................7
Description of solution...........................................................................................................7
Implementation plan and control............................................................................................8
Budget and timeline................................................................................................................9
Responsible person for plan implementation.......................................................................10
Reference list............................................................................................................................11
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Issue 1: Poor online customer service
Description of issue
Customers of Woolworths are not getting satisfactory online service and this kind of
dissatisfaction is leading them to make new decision of purchasing from other online retailers
such as Amazon. Amazon is leading the Australian retail market through its best quality
online service and it is a potential threat to Woolworths (News.com.au. 2019).
Description of solution
It is important for Woolworths to analyzed online service of Amazon in order to identify their
gaps in business. This company needs to ensure provision of best quality experience of online
shopping to their existing customers. As suggested by Wong et al. (2015), this company may
consider implementation of Artificial intelligence (AI) to follow up with queries and
grievances of customers. It is an innovative technology that helps to influence decision
making of new customers. Youth and millennial will prefer this solution to their complaint
and they will understand that this company values their opinion. The new customer
decision-making process consists of 5 different stages. In the first stage, customers identify
their problem or specific need. After that, they search for options and evaluate different
alternatives. As mentioned that Halvorsrud et al. (2016), customers make decision after
evaluating available alternatives. Throughout this process, they might face difficulties and
might ask for help. Amazon understands this process and support customers in decision
making regarding purchasing. Woolworths needs to follow up immediately after obtaining
request for help or any kinds of query of customers.
Amazon has already implemented AI technologies to provide the best experience to
customers. Good service quality of Amazon is helping them to beat other e-commerce
organizations such as Woolworths. Hanaysha (2016) have mentioned that financial
performance of Amazon is better than Woolworths as they are providing better online
service. It has been reported that this retail giant has generated more than $293 million in
2018 and still working on their AI technologies to improve online service quality
(Smartcompany.com.au, 2019). This is the main reason behind success story of Amazon.
However, it is expected that the revenue of Woolworths will be increased by near about 2.8%
at the end of 2019. In this era of digital business, people of young generation prefer to have
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technical support in order to save time. As mentioned by Wong et al. (2015), implementation
of AI technologies such as Chatbot may help Woolworths to help customers in orders placing
and improving tracking of order section. Most of the new customers put queries regarding
purchasing process of online and Woolworth is being unable to solve all queries within
minimum time. This aspect is leading to customer dissatisfaction and it is negatively
impacting on revenue generation.
Implementation plan and control
Steps of implementation Control measure
Conduction of research to get concept about
AI
Evaluating outcome of research
Identification of areas of development Assessing identified gaps with complaints
Hiring experts Verification of background and experience
before hiring
Starting of pilot project Development and execution of project
management plan
Trial Recording and evaluation trial outcome
Incorporation of AI Monitoring performance on regular basis
and updating system while required
Table 1: Implementation plan for AI
Woolworth may create customer-oriented search through implementation of AI and this
approach of this company will be able to improve search result for online shoppers. As
suggested by Asfaw et al. (2015), existing customers will be able to select desired groceries
and will share their experience with others. More improved online sales process can be
developed with help of AI technology. This organization needs to ensure step by step process
for implementing AI technology to improve online service. Steps of implementation of AI
technology are mentioned below,
Conduction of research to get concept about AI: In the beginning, management of
Woolworths needs to conduct research on available AI technologies that can support e-
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commerce business to improve online service. They need to assess AI technology used by
Amazon and other e-commerce firms in order to select the appropriate one for their business.
Hill, N., and Alexander (2017) have mentioned that outcome of research must be evaluated
to understand advantages and availability of AI.
Identification of areas of development: This organization must identify gaps in their service
system and they can evaluate complaints of customers. After identification of areas of
development, management will be able to understand specific kinds of AI requirement of
their business (Wong et al. 2015). For example, Chabot can be introduced to solve simple
queries of customers. Comparing gaps with complaints can help to measure effectiveness
of this step.
Hiring experts: Technological expert must be hired based on their skills and experience.
These two parameters must be tested before hiring of experts for AI implementation
project in Woolworths.
Starting pilot project: This project will focus on building of AI technology, under
supervision of expert technologist. Project manager is liable to monitor performance of
members of this project and completion of tasks.
Trial: Before implementing AI on entire system, trial must take place with small scale data.
Outcome of trial must be measured as this will justify effectiveness of particular AI on
online service system.
Incorporation of AI: AI must be incorporated if it passes on the trial and this technology
must be used on daily basis. However, it is important to monitor its performance on
frequent basis and must keep updating the technology for betterment.
Budget and timeline
Steps of implementation Expense($)
Conduction of research to get concept about
AI
550
Identification of areas of development 200
Hiring experts 400
Starting of pilot project 35000
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Trial 1000
Incorporation of AI 500
Total 37650
Table 2: Budget for solution to improve online service
Action Jun Jul Aug Sep Oct Nov Dec Jan Feb
Resear
ch
Identif
ication
of gaps
Hiring
Pilot
project
Trial
Incorp
oration
Table 3: Schedule
Responsible person for plan implementation
Management team of Woolworth needs to distribute tasks among employees. Manager of
R&D department will prepare team to conduct research and gap analysis, HR manager will
hire expert, Project management team will be formed and controlled by project manager and
this team will perform rest of the tasks as well.
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Issue 2: Corporate staff insufficiently trained
Description of issue
Woolworths is facing the problem of insufficient training of staffs. Staff members of this
company are not sure about the system of online grocery order and payment system.
However, in Amazon, it can be seen that countless opportunities of career development have
been provided to employees to develop their skills (Aboutamazon.com, 2019).
Description of solution
For increasing digital knowledge of employees and expertise regarding online process
handling, employee digital training can be provided. Skills of digital technology create gap
in business. As stated by Halvorsrud et al. (2016), it is essential to provide digital training to
employees for improving online processes. Managing orders online, managing payments
made by customers and other tasks can be done in a proper way by this training.
Incorporation of this training process can help Woolworths to provide proper service to
customers and market share can be increased. However, Amazon and Woolworths account
near about 65% of total revenue of this market in Australia. Theory of digital
transformation and change can be applied in this case. According to this theory, digital
transformation requires a change in behavior and skills of employees. Hence, it is essential
for Woolworths to increase skills and abilities of employees regarding management of online
services. This can help them to earn greater revenue than Amazon. In 2017 Amazon has
earned $177.9 billion in revenue (fortune.com, 2019).
Employee digital training is an appropriate solution to this issue because this can help
Woolworths to increase digital skills and ability to use digital tools. As opined by Hanaysha
(2016), many workers left a firm because they lack skills to manage digital tools. There are
different reasons, for which digital training solution needs to be applied in this organization.
This training can help employees of this firm to handle different software that is related to
operations. It can be seen that Amazon has launched different digital training programs that
have helped its employees to increase skills. Amazon has started system learning through the
help of videos and other presentation (Aws.amazon.com, 2019). Incorporation of digital
training to employees can help to increase their flexibility and this solution is cost-effective.
Hence, additional cost behind training of huge number of employees will not be expensed.
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However, implementation of this solution needs to be done by following a proper plan, which
can help to achieve desired objectives.
Implementation plan and control
Implementation steps Control measures
AR/VR Knowledge acquisition test
Microlearning of different essential
processes
Measuring satisfaction rate
On job training Measuring performance improvement
Arrangement of training through blogs,
chats, and podcasts
Knowledge acquisition test
Table 4: Different steps of implementation plan and control measures
In the initial part of this training program, it is essential for management of Woolworth to
provide a brief idea of Digital training, which can be done by AR/VR. This is an initial step
of this implementation plan that can help to increase idea about different digital tools.
Augmented reality and virtual reality are new techniques for providing training to employees
in a simpler way (Asfaw et al. 2015). Different software that is used to making transaction
and collecting order can be presented through virtual techniques. This can help increase
knowledge about this software among employees and efficiency will increase. As mentioned
by Hill and Alexander (2017), virtual and augmented reality helps a firm to provide training
without involvement of physical tools like paper. As a control measure in this step,
knowledge acquisition test can be performed. This can help trainers to examine whether
learning has impacted in performance level of employees or not.
The next step in this implementation plan involves microlearning process, which is
designed for busy employees. It can be seen that Woolworths provides constant service to
their customers and they can invest less amount of time in training process. As mentioned by
Wong et al. (2015), microlearning process is appropriate for staffs of an organization who
have busy schedules. Lessons can be imparted in this microlearning sessions through digital
tools like videos. Important teaching about online grocery ordering system can be imparted
through small contents and lectures. Different types of operating essential software regarding
ordering and transaction can be provided through lecture notes digitally. As said by Asfaw et
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al. (2015), microlearning process increases information retention capability of an employee.
Here, a basic evaluation technique of measuring satisfaction rate of employees can be
applied. This can be done through a short survey that can evaluate satisfaction level of
employees.
As discussed above that employees of Woolworths have a busy schedule for maintaining
operations hence, on job training is the next step of this implementation plan. As mentioned
by Halvorsrud et al. (2016), instructions about different skills and techniques can be given in
working conditions. This help to increase knowledge level of employees and additional cost
of setting classroom can be eliminated. Practical lessons regarding handling of software and
systems can be given during this step of digital training program. As a control measure
evaluation regarding improvement of performance can be applied. This can help to measure,
whether training objectives are fulfilled or not.
The last step of this implementation plan of employee digital training involves social
learning. Gathering information regarding grocery ordering systems and transaction software
through discussion forums and chats are important actions. This can help in information
sharing among employees, which can help to increase their ability and skills. As a control
measure knowledge acquisition test can be performed.
Budget and timeline
Items Budget (In $)
Set-up of digital tools 5000
Hiring experts 900
Creation of attractive digital content 3000
Refreshments during training 5000
Processing evaluation tests 1000
Total 14900
Table 5: Budget of the solution
Action Jun Jul Aug Sep Oct Nov Dec
AR/VR
Microlea
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rning
On job
training
social
learning
Table 6: Timeline of the solution
Responsible person for plan implementation
In this training program, human resource department of Woolworths will play a major role.
From collection of resource and hiring experts, every task will b performed by this
department. However, senior management of this firm needs to play essential roles during
planning of this program of training. Training team leaders will be responsible during the
process of on-job training. They will impart technical knowledge during training and conduct
evaluation process.
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Reference list
Aboutamazon.com (2019), Training, available at: https://www.aboutamazon.com/amazon-
fulfillment/our-fulfillment-centers/training [Accessed on 7th may 2019]
Asfaw, A.M., Argaw, M.D. and Bayissa, L., 2015. The impact of training and development
on employee performance and effectiveness: A case study of District Five Administration
Office, Bole Sub-City, Addis Ababa, Ethiopia. Journal of Human Resource and
Sustainability Studies, 3(04), p.188.
Aws.amazon.com (2019), Digital training, available at:
https://aws.amazon.com/about-aws/whats-new/2018/12/announcing-15-free-digital-training-
courses-on-new-aws-services-launched-at-re-invent-2018/[Accessed on 7th may 2019]
Fortune.com (2019), Revenue of Amazon, available at: http://fortune.com/longform/amazon-
groceries-fortune-500/[Accessed on 7th may 2019]
Halvorsrud, R., Kvale, K. and Følstad, A., 2016. Improving service quality through customer
journey analysis. Journal of service theory and practice, 26(6), pp.840-867.
Hanaysha, J., 2016. Examining the effects of employee empowerment, teamwork, and
employee training on organizational commitment. Procedia-Social and Behavioral
Sciences, 229, pp.298-306.
Hill, N. and Alexander, J., 2017. The handbook of customer satisfaction and loyalty
measurement. UK: Routledge.
News.com.au. 2019. How big an impact will Amazon have on Australia? Maybe we should
look at what happened in Canada rather than the US. Available at:
https://www.news.com.au/finance/business/retail/how-big-an-impact-will-amazon-have-on-
australia-maybe-we-should-look-at-what-happened-in-canada-rather-than-the-us/news-
story/d546b7a0979f169f9b8160a7f549be0f [Accessed on 7th May 2019]
Smartcompany.com.au.2019. Amazon Australia grows revenue more than 1500% but
remains a “small proportion” of the retail market. Available at:
https://www.smartcompany.com.au/industries/retail/amazon-australia-revenue/ [Accessed on
7th may 2019]
Wong, C.W., Lai, K.H., Cheng, T.C.E. and Lun, Y.V., 2015. The role of IT-enabled
collaborative decision making in inter-organizational information integration to improve
customer service performance. International Journal of Production Economics, 159, pp.56-65.
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