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A whitepaper on the state of play in retail subscriptions, examining 15 grocery chains from around the world, has found Coles and Woolworths are stuck in second gear.
The research, conducted by the Subscribed Institute, a think tank operated by subscription management platform provider, Zuora, analysed paid membership programs offered by the likes of Tesco, Walmart and Carrefour.
Subscribed Institute chair for Asia Pacific, Nick Cherrier said the study shows the two big Australian supermarkets subscription offerings, Coles Plus and Woolworths Delivery Unlimited, aren’t as advanced as many others across the globe.
“It is clear we are playing catch up with subscriptions. The offers launched by Coles and Woolworths in 2019 are very similar to what Tesco launched in 2012, for instance,” he said.
“For most retail businesses, the objective of a subscription model is to differentiate through value and build greater customer loyalty, therefore ensuring an additional stream of recurring revenue, but also increasing average user basket size or frequency.
“As an example, Amazon Prime members spend four times what non-members spend on the platform. Currently, though, in Australia we have a lack of differentiation, with the main appeal to customers being free deliveries.”
Cherrier said Australian grocery retailers had a great opportunity to take advantage of shifting customer expectations.
“It is well known that consumer behaviour has changed dramatically since 2019, and expectations have risen significantly. I believe shoppers are going to expect stores to provide them what they want, when they want it and how they want it, in exchange for that valuable data they provide retailers. As the white paper states, crossing the road has never been easier,” Cherrier said.
“But what is exciting is that businesses like Coles and Woolworths can personalise rewards for subscribers based on shopping patterns retailers can observe through membership programs. We’ve already seen encouraging signs in this area. Wesfarmers’ OneDigital is just one example of strong investment in more sophisticated, data-centric systems.”
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