Coles Group doubles down on digital

Coles Group is strengthening its digital offerings with new in-app features, technology trials and omnichannel engagement.

Coles Group's chief digital officer, Ben Hassing

During its investor day last week, chief digital officer Ben Hassing said the retailer is delivering “a number of features to help enhance shoppers' experience through [its] app”.

One of these is the addition of digital wayfinding - initially on a limited basis.

“The customer can build a specific shopping list for a specific [store] location, and we tell them ... what aisle those items can be found [in]," Hassing said.

The wayfinding feature works in 15 stores in Victoria, allowing customers to plot the best navigation route through a store while they shop.

The app will also play a larger role in the checkout process, with a digital wallet to be added "this fiscal year".

“We're expecting big things from that," Hassing said.

"We're also seeing customers engage with us around things like digital receipts in the app to understand purchase history, whether in-store or online."

New sites for experimentation

Hassing said Coles' online specialty pet retailer, Swaggle, launched in April this year, and digital meal kit site QuiteLike, are helping Coles “grow outside of the core” and reach consumers outside the supermarket.

"The great thing about these platforms is speed and low capital intensity.  Both of these platforms were brought to market in less than nine months,” Hassing said.

“They also give us a platform to test and trial services that we could bring into the core.”

As an example, he pointed to Swaggle, which gives consumers the ability “to subscribe to a product and you do so by getting a coupon or a voucher.”

Smart trolleys, electric shelf labels and availability cameras

Hassing said that as part of its testing and innovation work, Coles is investigating smart trolleys - shopping carts with attached tablets, as well as electric shelf labels, and stock availability cameras.

“Not all customers are going to use the app when they shop, but they will try the smart shopping cart," he said.

The "test-and-learn" is being performed using trolleys sourced from Instacart. “That allows us to quickly test and trial versus making big bets on our own,” Hassing said.

Accelerated by digital

Since the health pandemic, Coles has merged two websites and made its app shoppable, resulting in a customer net promoter score that is sitting at an “all time high”.

Hassing said that “96 percent of our customers today that shop with us online, [and] within 13 weeks, they also shop in-store.”

"The great thing about an online transaction” however, is purchases are likely to be up to 4.6 times larger.

“When we see customers adopt omnichannel behaviour, shop in-store and online, they spend with Coles 2.2 times more than those that don't.”

Hassing added Coles’ physical and digital assets serve three key customer shopping missions: weekly shops, tops-ups and immediate purchases.

Fulfillment centres, powered by Ocado technology, are helping the retailer keep more stock available that it can use to meet demand for online orders.

“We do have a few thousand products in the centres that we don't have space for in-store," Hassing said.

The centres also provided an avenue for experimentation with new product lines, given shelf space in a physical store is limited.

“It's a great way for our partners as well as with own brands to test trial and innovate new products [and] bring those to market at a very low cost, low working capital for us," Hassing said.

“We are going to continue to iterate and innovate on that front."

Delivery and digital personalisation

Hassing said Coles will also be focusing on two areas, click and collect and rapid delivery.

“[Click and collect” makes up more than 40 percent of our sales and ecommerce has a very healthy growth rate.

“We've been focused on experience through technology and geofencing but also changing process with team members.”

He said the “biggest pain point” is wait times, which “we've addressed that significantly this year”.  

“The second area is rapid delivery, serving that immediate need. Through technology through process reinvention, we've cut by more than 50 percent the time it takes to pick pack and consolidate the order.

“From a customer experience standpoint, we've been able to provide a live ETA [estimated time of arrival] so that when I go on Coles.com, not a separate platform, I place an order for rapid, and I know how much time it's going to take for my specific order to be delivered.

“On average today, that's less than one hour. But there's also been a lot of operating efficiencies and cost-out in what we've been doing with rapid [delivery].”

Hassing added Coles has now added “a number of features to enhance that experience” such as personalising the weekly digital catalogue.

It’s also placing relevant products on display pages, and its shopping list capability is now able to make “suggested lists".

"We can personalise those lists for customers so they can build a trolley for online checkout or they can use that list to shop in-store," he said.