Question: Looking at Countdown as a whole, how important has online become today?
It’s extremely important, largely because this company understands that customers are increasingly connected in a digital sense and they want freedom around how they’re going to get their groceries. Our 20 year history with online service means we really do understand the value this can represent to customers. I’m an example myself, a full-time working mum who finds the idea of adding a grocery shop to her long “to do” list very unappealing when I have the option of, instead, sitting down late at night and quickly ordering whatever we need online. Being able to do this and have the shopping ready for pick up at the local store or delivered to home really is valuable. Our service is all about giving customers the freedom to choose how and when they get their groceries.
Online is a growing portion of the total Countdown business and it’s a significant contributor to our growth. Every single week we see Kiwis try online shopping for the first time, we would now have well over 120,000 regular shoppers using our service. They might use it weekly, fortnightly of whenever suits them. We’re OK with all that, sometimes customers will find it more convenient to go into a physical store.
The core of what we do is provide all the options in a very convenient fashion. People will use digital to look for shopping inspiration and to really plan out what they are going to buy. At the end of the day, what customers care about most is, “how do I get the things I need and want into my basket, be that digital or physical, and get through the checkout quickly”. Our challenge is as retailer is make shopping a seamless experience whether you are online or in-store.
Question: Is there a different pattern of shopping behaviour when the customer is using the online option?
The average online shopper tends to buy more each time because they’re shopping less frequently and they really do value the convenience of this option. Our business is growing overall but there is definitely also a shift occurring from physical to online … and one of the drivers for this must be our ongoing effort to make the online option even more convenient. We have hourly pick up slots at all Countdown stores so customers have more choice about when they get their groceries. The “when” is about them, not us. We’re now seeing a lot of groceries picked up or delivered on Sunday. That makes sense because that’s when people are often planning the week ahead … they want to make sure that their groceries are in the house by Sunday night. The more Countdown can plug into this wish and provide a truly convenient service, the better for everyone. So yes, there is some shift around when people are choosing to shop with us. But I’d say they approach the tasks of choosing what to buy and loading their basket in much the same way online as offline.
Of course one of the big advantages of online is that you can be at home with your pantry right beside you so you can see exactly what you are missing. You’re less likely to end up with eight containers of something you don’t need and then forget something you really did. People are quite savvy with how they use our platform from home. Because we have a record of what you usually buy, you might set up a list of items with us … perhaps call it “my weekly shop” which you can easily click as the basis for each shop. There might be another list called “my favourites”. It is all about you based on the products you’ve bought before, personalisation of our platform is really important to our customers.
Question: Countdown isn’t targeting one type of customer. Is everyone a potential online shopper then?
Everyone, yes! Food and drink have been one of the last categories that people will shop for online and that makes sense because that’s the category they are most used to going into a physical store to buy. They can see the actual products and perhaps feel them. For people to change that habit and shop for food through a digital platform is a big deal. It’s about what you feed your family every night! The onus is, therefore, on Countdown to get everything right so that whether people are in our stores or on our platform, they are having the best possible experience and seeing the best offering in terms of freshness and so on. Both modes of shopping have got to deliver to the same high expectation. The fact that more and more Kiwis are giving online a go for the first time each week is confirmation that we are doing the right things in our business. In Christmas week last year – when people are at their busiest – we had thousands of customers trying our online service for the first time and in a sense, they were trusting us to get their Christmas right for them. That was pretty amazing when you think about it.
Question: Is there a seasonality about online shopping?
No it’s not seasonal. We have a standing joke in this industry that a store with underground car parking does particularly well when it is raining but when it’s sunny, nobody wants to go to any supermarket. With an online store, the weather doesn’t matter at all. There are many different ways that people use the service. Some rely on a fortnightly pantry-fill shop and then they top up with fresh from a physical store. Other customers use the platform weekly or even more often. For them, it’s a convenient way to get just about everything.
Question: Countdown rolled out is Pick up app for online shoppers who use your “click and collect” option in late 2017. How’s that going?
Very well. This is about taking readily available geotech location technology and making it accessible for anyone to leverage. There are two components. First, helping us improve customer experience when you come to pick up your groceries. The earlier we get advance notice that you are coming into the store, the sooner we can have your groceries ready. That’s been important in helping customers get in and out as quickly as they can. The second thing is to help our team do the best job they can for you. We want technology that will simplify and speed-up processes, and actually the team loves this one. The app sends the customer a text message to say your groceries are ready the moment your order is picked and packed. Ideally, you will confirm back on your intended pick-up time. Or under another scenario, you might be driving close to the store – say within a 5km radius – and you break a geo-fence set up for you by Countdown … as you approach, we text to ask if you are coming into store to collect your groceries. If it is safe and convenient, you can let us know by return text.
Question: How long does it take you to pack an order?
The team is pretty efficient. We have nearly 2,000 personal shoppers across New Zealand who do this every single day. Their motto is to your groceries as if they are doing it for themselves. They take a huge amount of care with fragile items like eggs and cool or frozen products like ice-cream. And they are quick! In some instances the customer can be ordering their groceries at 7.30am and picking them up at 10am. So we have pretty tight turnaround and we keep looking for ways to do it even better.
The team have some pretty efficient technology to help them in store including a hand-held device that has each order loaded up. The shopper uses this to pick and pack as they move around the store. Right now we are modelling ways for doing this is a plastic bag-less world. The groceries would be packed in an “eco bag” and the customer would return this to the store at a convenient time … the bag stays in the supply chain for its life span. Countdown recognises that the eco bag concept is the right thing to do for the environment and for our customers, a lot of whom are very keen on more sustainable options. In fact, most of our online customers are passionate about how they get their groceries packed and we’ve made than a huge priority.
Question: Do Pick up and Delivery compete in your business model?
No they are two service propositions that give our customers the choice they really value. We still see good growth in home delivery which is of course has been part of online shopping since the beginning (in 1996), at the same time as seeing amazing growth in Pick up. Customers tend to have a preference for one or the other. Some, like me, use both. For Pick up it is often people thinking, “I can quickly pick up something on the way home because I’m going near the supermarket”. For home delivery people actively deciding they don’t want to come near a store, at certain times at least. There are many customers for whom going to a supermarket simply isn’t an option anyway – people who are recovering from injury or illness, mothers with babies and so on. We know that delivery is really important for these people.
Question: Is Delivery also the greener option?
Countdown does map its deliveries with mindfulness about how many food miles are involved. It’s something the team reports on and then analyses. We know we need to become more and more sustainably minded across all our service propositions. Absolutely a live issue!
Question: What’s next with online shopping at Countdown?
First, we’ve got to make sure we are really good at what we do now. It means getting even better at ensuring the customer is at the heart of everything we do. How do we use current and emerging digital technologies to ensure we’re giving the best possible experience to him or her? We are focused on understanding the customer journey and knowing where all the pain points are. That starts with people planning their shop, through to how they find the right products for them and, eventually, to how quickly can they get those products into their home or wherever. We need to be making that as easy as possible.
Pain points? The best way to find these is to ask customers. I’ve just been in a presentation on improving the Countdown platform using customer-led design throughout the whole process. The team have come up with a hypothesis, they’ve tested it and iterated on the original design to make sure it really will work for the customer.
On the technology front … the future is definitely not yet formed so we we get the pleasure of asking ourselves, “what is the next experience we want to create for customers that they might not yet be expecting?” How can we steer into that space? Voice, for example, is an emerging technology globally. So how could vocal recognition inform and improve the shopping experience? Really, we’re an organisation with a very active role in forming the new shopping experience for customers here in New Zealand. You can look at what’s happening globally, you can ask your customers questions and you can do a lot of other things in between. There are rich insights to be gathered from every source but you still have to be creative and to really think about what will work for people.
Question: So is my fridge going to start shopping for me?
Potentially yes. If we’re using voice technology for ordering what you want, perhaps your fridge will order products online when it recognises you are running low. Will we see a world with subscription-based services … items being delivered to your door on a regular basis because they’re automatically ordered? The fact is that not only are customer expectations changing all the time, but so is technology and this can be very disruptive. Retailing will see more change, I think, in the next five years than perhaps it’s been through over the past 50 years. That’s how important new and emerging technologies and changing market dynamics are in the lives of us all!
Question: What more can supermarkets do to prepare and deliver food to the customer in the format they want? Might you move into packaged meal ingredients, for example, like another prominent New Zealand business?
As a retailer we have to realise that other new and distinct service propositions are absolutely competing for the Kiwi dinner table. First and foremost, we need to be really good at what we do now. We are still seeing such huge growth in people using online shopping for the first time ... it’s our role to deliver them the experience they’re expecting from Countdown as they know it today. But when we look further out and ask questions like, “how does do we support a busy working mum get dinner on the table faster and in a really nutritious format?” … then yes, we have to navigate all the possibilities.
Question: Now the obvious question: Will online eventually replace bricks and mortar altogether?
No! There is an experience and role that supermarkets have in communities that makes them really critical. I think about the offering and format of our Ponsonby supermarket … it’s a food store with a particular experience. Personally as a foodie, I love being in your fresh produce department and thinking to myself, “what am I going to cook, what will go with what, how do I feel more connected with the foods that my family is eating?” Absolutely we have a role in physical stores to create outstanding experiences for our customers. The technology in that environment keeps changing, for example to speed up the check-out process. Again, our challenge as retailers is to make that world all about you, the customer! Digital technology will also continue to play a really big role in our stores.
Q It is fair to say that data becomes even more important as we go into the future, both online and offline?
Data has lots of different forms and uses. We need really good information on our customers so we can deeply understand them – and of course, really good data on products. This is why Countdown works with GS1 and why we connect closely with our supplier community. We need rich data to meet our customers’ needs – they wanted to make informed choices on which products they buy, use and eat.
The more we can put the right information in front of them in an easily digestible format, the better for everyone. In fact, we’ve had customers say, “the nutritional information you are making available to me on the website is so useful, it’s easier than turning a pack around in store”. We have about 10,000 products now in our digital store that have nutritional information and health star ratings. That’s vital for those who have allergies, gluten intolerance and so on—and actually for people everywhere who just want more knowledge about what their families are eating. Our customers are asking for more and more information. We made a decision two years ago to work with GS1 on putting more of it in front of them … and we’re seeing just how engaged customers are with more and more social media postings about food and what they’ve found out about that food.
Question: How important is data to Countdown’s fulfilment given that customers are buying online without having seen actual products?
Data is absolutely critical in this regard too … it’s not just about what’s in the product but what product the customer is expecting to buy and is that the same as what they actually receive. “Do what I am picking and what I get connect?” Ensuring that it does becomes a lot harder in the online world. For one thing, product images are all the same size on the screen but not in the physical world! How do we help the customer understand pack size and product range differences? We need, for example, to make sure we are really clear with the customer about construct of packaging and about the product images they are seeing.
We track the incidence of products where the right images are missing and the team are hellbent on keeping that number really low. If the right image isn’t available, there is very little value having that product ranged online. All the images there are also available to our shoppers for their in-store picking and packing activities. We use a technology called “picture pick” and the hand-held gun that the team is using has product images displayed on it … our people can match that image with what’s in front of them on the supermarket shelf. This makes the task faster and far more accurate. If you think about the canned tomato category as an example, there are many different variations of product. If both the customer and shopper are seeing the same thing, it’s a great way to ensure the item going into the basket is canned tomato with basil not chilli and so on!
The more accurate and the more automated the information and images coming into our system from our suppliers, the better the experience for customers … and actually for us, as the retailer, and for the supplier themselves. Our processes can be simpler and more efficient.
Question: How satisfied are your customers?
We have many different ways of gathering feedback from customers, through emails and calls handled by our service people, through social media postings and through regular surveys. For commercial reasons, we don’t talk publicly about our numbers but I can tell you that a customer who engages with our online shopping service is generally very positive about Countdown. I think that comes back to the fact that we are actually making their lives easier in very practical ways.
Question: And people don’t mind the extra element of cost when they shop online?
No. In fact some customers use our service because it helps them budget and they spend less overall on their food. For example, they are less taken by the impulse to buy when they see something new and interesting. On the other hand, it is clear that people will use the digital platform to trial out products they haven’t jad before. We see the full range of shopping behaviours online.
Question: Given that data is so important, what role does GS1 have in your business?
We see GS1 as a partner. Countdown’s digital team have a great working relationship with GS1 and so does the merchandise team … and that’s because we recognise the value of having an accurate set of product data we can surface to our customers in more or less real time. That data can flow through our system almost invisibly. With GS1 standards, we’re not having to do too much to get that it where we want it. We encourage all our suppliers to put their information through GS1’s National Product Catalogue and from there, we have more opportunity to provide what customers are asking for. We have put real effort into educating suppliers about our relationship with GS1 and, of course, it is in their interest as well to have their products presented to customers in the best possible ways. I think there’s plenty of good awareness by now.