Woolworths - QFF was an error - The Age

[AdMEL]

Interesting article about Woolworths - primarily about the hardware issues, but mentions that QFF was another key expensive blunder!

I wonder if the recent change in management has been an influencing factor in the return to bonus points offers?

Choosing the right hardware for growth

 

[JohnK]

Yes an interesting article.

I think the QFF tie up was good for Woolworths but the IT implementation is poor.

 

[docjames]

It's hard to see that it's driven growth, at a not insubstantial cost (ie. shoppers already using WW are now getting points whereas the incremental gain in shoppers switching seems not to have been enough to spike sales sufficiently to pay for all the points they are now giving).

 

[Standby]

I have an equal choice of Coles or Woolies where I live (parking at Woolies is slightly tougher) and prior to EDR used to split my spend. Post EDR they get 100% of my spend or about 5K extra than before.
If they removed EDR with QF earn I would probably go back to split spend for convenience .I'm sure there are plenty of others who use this points top up method. This seems an easy market share gain.
If they got rid of the $30 min they would get even more of my incidental shopping including BWS rather than my local drive through for the more than occasional 6pack.

 

[NM]

It's hard to see that it's driven growth, at a not insubstantial cost (ie. shoppers already using WW are now getting points whereas the incremental gain in shoppers switching seems not to have been enough to spike sales sufficiently to pay for all the points they are now giving).

Indeed. And I am probably not a typical example, but before the QFF/WOW venture, I estimate I shopped 80% at Coles and 20% at WOW. Since the partnership, I estimate its more like 98% WOW and 2% Coles. This also carried through to their other "brands" with Big-W, Dan Murphy and Masters Hardware.

 

[basso]

It's hard to see that it's driven growth, at a not insubstantial cost (ie. shoppers already using WW are now getting points whereas the incremental gain in shoppers switching seems not to have been enough to spike sales sufficiently to pay for all the points they are now giving).

The internal measures for this (and FlyBuys) probably relates to things like attempting to increase the average basket size. So, you would need to know what the KPIs for the program are, before you can really cough whether it is a good program (for WOW) or not.

 

[docjames]

The internal measures for this (and FlyBuys) probably relates to things like attempting to increase the average basket size. So, you would need to know what the KPIs for the program are, before you can really cough whether it is a good program (for WOW) or not.

Agree, but if they are stating to press it hasn't worked well, presumably the expected return isn't there.


Would be interesting to ask a question around the impact at the company AGM....

 

[Paddy55]

I thank the WW and QF tie up each and every week! :mrgreen:
We already shopped at WW, only very occasionally visiting Coles.
I'd be surprised if I spent anything extra at WW and yet last year they gave us a whole bunch of points!

 

[AdMEL]

QFF points have had some influence on my spending - previously my supermarket spending was probably 40% WW, 40% Coles and 20% local IGA, now it's probably 55% WW, 10% Coles and 35% IGA. IGA is slightly more expensive and provides me with no loyalty benefits, but the benefits are it is much closer and has much better meat, better deli (although WW is closing the gap) and better fruit and veg.

Liquor - majority from Dan's (no change) and some from IGA and WW liquor/BWS, though until very recently, I hadn't bought anything from WW/BWS in a long time - too expensive for everyday wine and no good stuff that was of interest (plus too expensive). Bonus points, 30% off, better range and better prices have lured me back.

 

[williamsf1]

Yes an interesting article.

I think the QFF tie up was good for Woolworths but the IT implementation is poor.

can I ask what part of the IT implementation you thought was poor ?

 

[williamsf1]

Interesting article about Woolworths - primarily about the hardware issues, but mentions that QFF was another key expensive blunder!

I wonder if the recent change in management has been an influencing factor in the return to bonus points offers?

Choosing the right hardware for growth

I guess it is interesting to consider that Coles aka FlyBuys has not partnered with Velocity despite many rumours a few years back ... now Coles is a lot stronger

 

[whatmeworry]

Interesting article about Woolworths - primarily about the hardware issues, but mentions that QFF was another key expensive blunder!

I wonder if the recent change in management has been an influencing factor in the return to bonus points offers?

Choosing the right hardware for growth

He pointed to three fundamental strategic errors he believes management made: Its expensive store renovations, raising earnings before interest and tax (EBIT) sales margins aggressively, and its Qantas points loyalty program. Woolworths' profit downgrade arrived less than 10 months after Errington's note.

Read more: Choosing the right hardware for growth
​

It doesn't really say the loyalty program was a huge expensive blunder but rather it was one of the contributing factors that led them astray from cutting costs and passing on lower prices to consumers to drive profitability.

 

[markis10]

Agree, but if they are stating to press it hasn't worked well, presumably the expected return isn't there.


Would be interesting to ask a question around the impact at the company AGM....

They are not, it's the analysts!

 

[JohnK]

can I ask what part of the IT implementation you thought was poor ?

In relation to the Everyday Rewards loyalty program and the transfer of points to QFF.

I am constantly having to chase up the bonus offers as they have not posted to account correctly or not at all.

On some emails if I register it knows I have already registered for the promotion. On other emails it simply thanks me for registering. I cannot see anywhere in their system whether I have registered for a promotion or not.

As for fuel vouchers all our accounts are meant to receive QFF points yet receive the discount instead on many occasions as the interface is down.

That is a poor IT implementation.

 

[Isochronous]

The QFF thing has definitely decreased my Coles spend. Also Flybuys is a **** programme generally so it has swayed me.

 

[RWJ777]

If this is an accurate portrayal of Woolies attitude, it is rather symptomatic of why they're doing so badly: poor business analytics. They used to be guns at all this and more recently appear to have dropped the ball big time. The QFF program has been a boon for them -- if their data can't reveal how it has changed behaviours, they're simply dumb.As for other comments here that if they did away with the program, people would switch back to Coles, I totally agree. I go there for my shops of less than $30, preserving my big shops to Wooies to get the points. Coles is far, far better these days and yet I preserve Woolies for big shops to get the points.Who does that make the idiot? Me or Woolies!

 

[TonyHancock]

I have two Coles supermarkets relatively close to my home and 99% of grocery shopping was with Coles prior to the Everyday Rewards tie up. Now 80% of grocery shopping is at a Woolworth's that is a good 3-4km further away from the Coles. I guess the question remains "Have sales increased enough?".

 

[elbarto]

I feel dirty every time I step into Coles. The New Girl, Status Quo and Curtis Stone heighten my resolve to continue spending my my money at Woolworths. Woolworths simply need to look at EDR in a different way, get over their joint venture issues and expand it. They'll collect more valuable data by allowing it to be used at every WOW business. And data is the whole point of these loyalty schemes.

 

[Supersonic Swinger]

For every heavy FF who has moved their shopping across to Woolworths, there are probably equally:

- light or non-flyers who have used the program to accumulate points and then when they have tried to redeem them and found it difficult/impossible thanks to the ongoing QFF 'enhancements', their frustration will have been reflected not just against Qantas but also against Woolworths where they accumulated the points
- anyone who doesn't think a few QFF points are worth it to hand over to Woolworths details of what you buy, how much you buy, where you buy and at what time you buy.

And if QFF are charging Woolworths anything like what they were charging restaurants under the Qantas Dining program, I'm not surprised that analysts come to the conclusion it's been a bad deal for Woolworths.

 

[pauly7]

Woolworths just need to remove that pesky $30 minimum