Woolworths digital and analytics capabilities to only grow in importance

Woolworths Group says the role of digital and analytics capabilities is only increasing in importance, with the company continuing to build on existing foundations and momentum.

It has also earmarked roughly $2 billion in FY24 for investment across its ecommerce network, technology and stores.

Its capital expenditure includes $40 million to be spent on CCTV upgrades, and on body-worn cameras and wearable duress devices to improve team safety.

Group CEO Brad Banducci said that investment in platforms and infrastructure is also "critical, enabling greater efficiency, greater efficiency and improving the resilience of our end-to-end value chain."

Its investments are designed to strengthen business foundations, deliver sustainable growth and create long-term value for shareholders.

The company’s full-year 2023 operating capital expenditure reached $1.888 billion, a slight fall from the year prior.

Over the year, Woolworths spent $274 million on IT, up from $197 million the prior year. Digital spend over the year was $151 million, up from $121 million in FY22.

WooliesX and digital

Online and digital division WooliesX recorded a solid second half with total sales peaked at $6.432 billion, increasing by 5.6 percent from the prior year.

WooliesX comprises of three platforms, eCom (B2C eCom and Woolworths at Work), digital and media including owned digital assets and media, Cartology and Shopper Media, and rewards and services.

“WooliesX ecommerce sales reached $5.1 billion in FY23 which was up $3.7 billion,” Banducci said.

“After some challenging normalisation in the first off, ecommerce sales returned to growth of 13.2 percent in [the second half], with same day and express service having grown rapidly as customers seek ever-more convenience.

“Amazingly, over 80 percent of our ecommerce sales are now fulfilled within 24 hours of order.”

It’s data-driven marketing business, Cartology, grew its sales by 29 percent for the year.

Group digital traffic increased, with average weekly traffic to group digital platforms in FY23 up 16.3 percent, according to Banducci.

“Weekly average visits to Woolworths Everyday Rewards websites and apps reached 16.3 million in Q4," he said.

“For the first time digital visits to our food and Everyday Rewards apps surpassed web visits in FY23”.

Supply chain transformation

Woolworths supply chain upgrade will continue over FY24 with the company reporting its Auburn-based ecommerce fulfilment centre is expected to open in late 2024.

Initial construction of its new Sydney national distribution centre in Moorebank is now complete with an operational launch date planned for the first half of FY25.

Back in May, the company acquired Milkrun and has since revived the Australian fintech business, integrating it with its Metro60 online delivery service.

Big W

Big W saw a drop in sales over the year, attributed to cost-of-living pressures as consumers cut back on "discretionary items, and the sector became increasingly competitive” Banducci said.

Despite the decline, there were 500,000 downloads of Big W's app across the year.

Banducci said over the year, the group’s sales increased 5.7 percent to $64.3 billion and stated its improved financial performance reflects a “return to relative stability following the material disruption in the last three years”.