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Rising from the Ashes? – Woolworths goes Online

April 11, 2009

The recession hit many businesses hard, even long established brand Woolworths, Britain’s major retailer, suffered massively and was forced into receivership and finally went into liquidation.

woolworths shut store

The high-street chain collapsed in November 2008, only one year before its centenary. Founded by Franklin Winfield Woolworth in 1909, Woolworths established into a 800 chain giant. Right from the start selling a variety of merchandise such as toys, sweets, children’s clothing and haberdashery. Thanks to mass production “Woolies” was able to be very price competitive and that is how they outperformed many British competitors when it came to china and glassware. According to Lavan from The Times Online,  in their first year of trade in Britain they offered free pots of tea to customers and introduced new shopping experiences through an American store layout encouraging to browse around (read more here).

woolworths-sheep-and-dog

But competing on price only is a risky game. Referring to the BBC , the main problems arose when it was heavily undermined by Amazon and large supermarkets like Tesco started selling non-food products (full story here).

Generations of shoppers commiserated with the sinking ship of Woolworths, a brand the grew up with, liked and trusted. A high amount of affection was shown when the brand’s followers on social networking sites started to increase when the recession started to kick in and Woolworths’ breakdown was covered all over the media. Referring to Marketingmagazine, Woolworth’s group on Facebook has rapidly increased exceeding a number of 23,000 members showing sympathy and sharing affection.

Whilst some were going under, investors caught interest and started to see potential business opportunities. A famous example is entrepreneur Theo Paphitis, who successfully turned around struggling and troubled retail businesses, such as the one of lingerie chain La Senza, which was one of his biggest successes (more). He is also known from the popular BBC programme “Dragons Den“, where according to BBC his focus belongs to the inheritance of his children and he is known for the sentence: “Why should I part with any of my children’s inheritance investing in this?”

woolworths-theo-paphitis

Finally, the company was bought by the Shop Direct Group and Woolworths’ are now back with a new customer focused and very interactive online strategy.  Shop Direct Group the result of a merger between Shop Direct companies and Littlewoods in 2005 is one of the UK’s largest online retailers. Despite Woolworths’ popularity critics were arguing that Woolies were “out-of-touch”, lacking customer focus, as well as interaction. With reference to Manning from the Mirror, Woolies had no real unique selling point: “It is a jack of all trades, but a master of none”.  He also refers to it as outdated in an era where online shopping is outperforming shopping in giant out-of-town centres (read more).

This shall all be changed with the new business model and a vibrant marketing strategy. Shop Direct Group’s new strategy is to reduce Woolworths’ operations on only online with a strong focus on customer information and involvement through interaction. Woolworths has been relaunched online with a very strong web presence.

Shop Direct Group, which is preparing for Woolworths’ relaunch in the upcoming summer is certainly doing a good job and improving main weaknesses. It seems like they have recognised the power and opportunities that lie in online social networks. As a sign of high interaction with customer they are collecting feedback and areas of interest through social network pages Facebook, Twitter, Spotify and last fm. They set up groups called “the first single I ever bought” and encourage users to list their experiences and create a “nostalgic playlist”. Marketingmagazine states that well renounced agencies Glue London and The Brooklyn Brothers have been appointed for Woolworths’ social media presence and engagement. In order to keep customers up to date with newest information they regularly put information on Twitter, Facebook or their newly created blog (www.woolworthsblog.co.uk). This move enables them to be much more transparent and automatically provides Woolworths with more closeness to its “followers” and their feedback. A great way for their online reputation management as well as a source for ideas or concerns from interested individuals.

On Twitter they recently tested if there is any demand for some of their new offerings and according to Marketingmagazine, Twitter followers were prompted to list their top five Woolworths’ products – a great way to conduct market research in order to detect customer’s favourites (Read more).

Moreover they have created a page specially for Easter (www.woolieswonderland.co.uk) – a page that encourages its visitors to find six virtual eggs in order to secure a place in a prize draw to win a family home entertainment system…and of course to drive web traffic and collect contacts, but don’t tell anyone 😀

woolieswunderland

All in all it seems that Woolworths is on the right course. By applying clever and strategic marketing techniques and using appropriate new media tools, they can reach their audience, engage with them and discover what are the right steps to do next in order to have a successful comeback as an online store.

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8 comments

  1. Well researched and interesting article! You’re doin’ a great job here with that blog. I’m wondering how Woolworths will carry on and whether the relaunch in summer will be a success or not…bearing in mind that there is already very stiff competition on the on-line market (Amazon and Tesco just to start with)


  2. Interesting post, the online environment does offer opportunities for organisations that are willing to shift online. This step woolworths has taken to relaunch its brand online is a smart one despite strong competition from other brands in the online environment. I’m certain that if they play their cards well using new media and unique marketing strategies, they will be back to greatness. Wish them a successful relaunch..


  3. The credit crunch brought down many businesses and unfortunately, I guess many more will follow. But you can tell the economy is slowly starting to recover, given that the fuel prices are rising again 😀 It seems clever to have an on-line comeback for Woolworths, although it is nothing I will consider for my personal use. Online shopping may be increasing in use and importance, but the products on offer in Woolworths I prefer to buy “in real life” where I can touch and see if that makes sense. Nevertheless, it is a clever move from a strategic perspective. With good marketing and common sense there may be the desired target audience out there.


  4. I agree with you Annemarie and with you Uchechi. Good luck for the relaunch to Woolworths and hopefully they will succeed. I do believe there is a target market out there, as Woolworths is a brand that was very well received and somehow a part of British culture. I have to admit, I won’t become an online customer neither – that’s just nothing for me, I belong to the old “school” shoppers and prefer to “touch and see” 🙂 as pointed out by Annemarie.


  5. I liked Woolworths because, whenever I found myself in an unfamiliar town centre, there it was! A refuge in foul weather – warm and dry, no pushy sales staff wanting to “help” me. Hmmm! It was people like me who killed it as I seldom bought anything costing more than £5 Sorry, Woolies!

    I can’t imagine becoming an online customer, but you never know. I use Superdrug as a refuge now … aren’t they owned by the same group?


  6. good job!! i really don’t know what i would do without woolworths…I am certainly looking forward to the launch of the online store, i just love and miss it!


  7. Great article and the comments are all hopes for woolies, but the reality is the all the new company has is the name and unfortunately in todays market that name wont give the company longjevaty. Woolies the website wont last long than a couple of years and will be assigned to the vaults of history.


  8. […] Image Credit : New Media and Brands […]



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