The Moderating Role Of Service Environment On Customer: A Case Study Of Woolworths Supermarkets

Introducing Woolworth’s

Dsicuss about the Moderating Role Of Service Environment On Customer.

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.

Woolworths uses three approaches to segment its markets namely, demographic segmentation, socioeconomic segmentation and geographic 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 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).

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).

Identification of three customer segments of Woolworths

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 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.

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.

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 (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.

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.

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.

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).

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 like pricing and product bundling to create positive customer purchase experience (N. Bolton et al., 2014).

Customer experience maps with business value proposition

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 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.

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.

Voice of customer and customer feedback while forming experience strategies

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

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.

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 everything (Babin, Boles & Griffin, 2015). The company has to address all the different issues of the customers irrespective of their cultural, regional or religious differences.
2. Having a clear idea of the customer’s needs and experiences- The management must have a clear idea on the needs and expectations of the customer experiences that helps the organization to easily provide them with exactly their needs.
3. Developing the customer centric vision- According to, Carlson, O’Cass and Ahrholdt (2015) the customer service approach of the company must be dynamic in nature and interactive. Customer expectations must be met at each and every instances and interactions with a consistency of service delivery and better experience.
4. Clear communication- Clear communication is one of the major wish list for attaining a customer centric viewpoint. The management of Woolworths must formulate the strategies in such a way that each and every department within the company is well aware about the activities of each other and all their tasks are coordinated accordingly.

Conclusion:

The following report has highlighted the customer relationship management and its importance for Woolworths in the modern Australian market. The need for the customer relationship management is highly needed to attain a degree of competitive advantage in the market. The thorough analysis of the following chapter will help the readers to gain a clear idea of Customer Relationship management and its present state of implementation and use in Woolworths.

References

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