Enhancing Customer Loyalty at Woolworths

Question: Discuss about the Enhancing Customer Loyalty at Woolworths. Answer: Introduction The competition in the Australian retail is on the rise especially with the entry of foreign discount retailers such as Costco (US) and Aldi (Germany) which is leading to a declining market share of Woolworths (Mitchell, 2015). In this backdrop, Woolworths needs to take certain measures aimed at retaining the market share if not enhancing it (Symth, 2015). The concern is the failing market share for Woolworths which indicates that customers are highly price sensitive and tend to get attracted to the retailer that tends to offer the lowest prices as a result of which the discount retailers are making merry (RMR, 2016). While Woolworths owing to its business model cannot sustainably match the low prices offered by these retailers on a sustainable basis, it ought to look at alternate means where it could retain and possibly attract new customers by leveraging its brand and strong presence (Mortimer, 2015). This is imperative considering the acquisition costs of new customers (Nielsen, 2012). The primary research aim is to recommend measures that Woolworths can deploy in order to enhance consumer loyalty. These measures may not be limited to a standalone practice and may essentially a combination of certain practices which can enable market share retention in the short run. The various research objectives are as follows. To highlight the various measures which tend to enhance the loyalty of customers in the retail sector To identify the measures that Woolworths can apply in order to enhance the overall customer loyalty To highlight the likely effectiveness of these measures in the long run considering the industry dynamics currently prevalent in the supermarket segment in Australia. A mixed methodology would be applied for the given research problem. The first step would be to conduct a literature review of customer loyalty in the retail space with references to Australia and other developed economies. Based on the literature review, a questionnaire would be framed which would highlight the various potential strategies that could be deployed and primary data would be collected using the survey method. The target population for the survey would be the employees, supervisors and loyal customers of Woolworths. A sample would be selected at random which would consist of total 50 individuals whose responses would be collected. In order to ensure that fair representation of each group, a stratified sampling method would be deployed whereby survey responses would be recorded from 20 employees, 10 supervisors and 20 loyal customers of Woolworths. Besides, unstructured interview would also be conducted with five supervisors and five customers who would offer insight on how the company could deal with the current issue at hand. Considering that it would be unstructured, hence the discussion could be broad based and not limited to the practices identified as part of the survey. Further, the survey would then be analysed using various statistical techniques in order to find the favourable solution as per the response. Further, this would then be clubbed with the information collected in the interview and used to offer recommendations. The retail sector in Australia is witnessing a fall in the customer loyalty which is adversely impacting established players such as Woolworths (RMR, 2015). In this regard, the current business research aims to highlight the various measures which could be undertaken by Woolworths in order to enhance the overall customer loyalty and thereby resolve the current issue at hand. References Mitchell, S. (2015, November 9), Retailers prepare defence as foreign suitors search Down Under, The Sydney Morning Herald, Retrieved April 04, 2017 from https://www.smh.com.au/business/retail/retailers-prepare-defence-as-foreign-suitors-search-down-under-20151104-gkr8c6.html Mortimer, G. (2015, September 28), Down, down but not different: Australias supermarkets in a race to thebottom, The Conversation, Retrieved April 04, 2017 from https://theconversation.com/down-down-but-not-different-australias-supermarkets-in-a-race-to-the-bottom-48151 Nielsen (2012, February 5), WHERE IS THE LOVE? STORE LOYALTY DOWN AS SAVVY CONSUMERS USE PROMOTIONS TO SHOP AROUND, Nielsen Research, Retrieved April 04, 2017 from https://www.nielsen.com/au/en/insights/news/2015/where-is-the-love-store-loyalty-down-as-savvy-consumers-use-promotions-to-shop-around.html RMR (2015, September 08), Supermarket loyalty: whats that?, Roy Morgan Research, Retrieved April 04, 2017 from https://www.roymorgan.com/findings/6442-supermarket-loyalty-whats-that-201509072312 RMR (2016, October 24), Supermarket weep: Woolies share continues to fall and Coles and Aldi split the proceeds, Roy Morgan Research, Retrieved April 04, 2017 from https://www.roymorgan.com/findings/7021-woolworths-coles-aldi-iga-supermarket-market-shares-australia-september-2016--201610241542 Symth, J. (2015, June 17), Foreign competitors sour Australian grocery sector, The Financial Times, Retrieved April 04, 2017 from https://www.ft.com/content/351943ae-14b0-11e5-a51f-00144feabdc0