Woolworths inks deal with eBay to drive online/offline sales
In an unlikely alliance, Woolworths is joining forces with eBay, one of its largest competitors, to boost spending by making it easier for shoppers to collect online purchases.
Under a partnership unveiled on Tuesday, eBay customers will be able to pick up their online orders from parcel pick up points and lockers in more than 90 Woolworths supermarkets and BIG W stores.
Woolworths hopes the click and collect service will increase foot traffic and sales in its bricks and mortar stores, while eBay believes the deal will fuel online sales by giving shoppers more options for taking delivery of their orders.
eBay shoppers will be able to pick up their purchases from Woolworths owned stores Photo: Ian Bird
Click and collect is becoming increasingly important to online retailers and consumers alike because it reduces the cost of delivering and returning goods.
“There are a number of partners we could have worked with, but Woolworths and eBay have a shared vision,” said eBay’s merchant development director, Hamish Moline.
“They’d already started investing in their cross brand (click and collect ) network so they could move much faster and they have the largest store network in the country,” he said. “They were a logical partner.”
Woolworths’ general manager marketplace, Emily Amos, believes more than one third of shoppers who visit a Woolworths store to collect their eBay orders will make additional purchases in-store.
“Yes we do hope it will drive foot traffic in stores … people are definitely walking into our stores and purchasing when they pick up their online orders,” Ms Amos said. “This test will be the point where we prove that out.”
The extra costs would be negligible, she said, because eBay sellers would bear the cost of delivery to Woolworths stores and the retailer was already manning parcel collection desks for its online grocery and BIG W customers.
Woolworths’s online grocery shoppers can currenly collect orders at more than 200 stores and BIG W customers can collect online general merchandise orders from collection desks in 22 Woolworths supermarkets. Click and collect now accounts for between 35 per cent and 50 per cent of online sales across Woolworths’ brands.
Analysts welcomed the move, saying it stood to benefit both Woolworths and eBay.
“It’s positive for eBay in terms of providing a greater degree of flexibility and it enables Woolworths to try to convert that trip into a transaction,” said Commonwealth Bank retail analyst Andrew McLennan.
“eBay has eight million customers a month – it might enable Woolworths to appeal to a broader customer that may not necessarily be shopping in Woolworths brands,” he said.
An eBay survey late last year found that one in five online shoppers in Australia purchased online at least once a week, but 47 per cent were not permitted to receive personal deliveries at work and almost a quarter had to take leave or work from home to take delivery of online orders.
Based on this survey, eBay believes that more than two million eBay customers will take advantage of the click and collect option and purchase more frequently.
“The traditional retail model is evolving and the lines between online and offline (are) blurring,” said Mr Moline. “Consumers now expect a more bespoke experience that meets their needs.”
Retailers and eBay sellers participating in the Woolworths click and collect service include surf wear retailer SurfStitch, homewares retailer Your Home Depot, Mytopia, Futu Online and Golfbox. The service is expected to expand to include 250 sellers within two months and over time as many as 12,000 eBay sellers are expected to use the click and collect option.
eBay is becoming an increasingly popular online platform for established retailers as well as independent traders and about 82 per cent of goods sold on eBay Australia are new rather than second hand, up from 60 per cent five years ago.
Two Woolworths brands – Masters and Wine Market – currently sell products through eBay and another brand will join the platform in a few months.
Woolworths chief executive Grant O’Brien has identified online retailing as a key source of growth as he attempts to restore annual profit growth at Australia’s largest retailer to around 10 per cent.
Woolworths’ online sales soared 50 per cent to $1.2 billion in 2014 – buoyed by the acquisition of catalogue and online retailer Ezibuy in 2013 – and now represent about 2 per cent of total revenues.
Extracted in full from the Sydney Morning Herald.