Big W Scales Up Online to Increase Profitability
Woolworths’ department store brand Big W has decided that the best way to offset the rising pressures of a harsh retail environment is to pump up its e-commerce offering.
At a time when many Australian retailers are winding back projections and expectations due to a harsh trading environment, there are a few large, traditional businesses that are taking a fresh approach.
Big W‘s sales have generally been diminishing over the last few years, with sales growth shrinking in nine out of the past 11 financial quarters. However, unlike Gerry Harvey announcing that his Harvey Norman franchise is “doing nothing”, the Woolworths-owned department store has a plan.
What little increases in sales growth Big W has seen in this financial year the management team chalk up to the business’s healthy online sales. As it stands, the retailer currently has 20,000 products available on its website, which is double the amount it was providing a year ago.
Big W’s Managing Director Julie Coates told The Australian that the current plan is to boost online product numbers above 80,000, in order to offer “the whole store and more” via the webstore. Essentially, Big W plans to provide a wider product range online than it provides in any one of its bricks-and-mortar outlets.
It’s easy to scoff at the ambition displayed by such a plan, however Big W has already proven that its model will work online, as the events of a few weeks ago highlight.
When Big W originally planned an online toy sale promotion, the team never expected the levels of traffic they received, forcing their servers offline in the process.
“We thought we’d get twice the level of traffic as last year; we planned capacity for three times, but we got four,” Coates said.
It was then left to the customer service team to mop up the rafts of frustrated customers that had arrived on the site expecting a bargain, but instead found an error page. Coates points out that this was a valuable lesson for any business moving online – not only does the technology have to support the offer, the customer service levels need to be adequate enough to handle just about any situation.
“We keep improving. You have to provide the customer with what they want,” Coates said.