Woolworths: building a sustainable brand
PUT A GROUP of people together, ask them what their favourite purchase from Woolworths is, and very quickly they can tell you what items they enjoy and associate with the brand. Whether it is a fruit smoothie, a Woolworths roast chicken or a T-shirt from the Trenery label, the company’s brand is recognised and supported by many South Africans. Interestingly enough, according to Woolworths CEO Simon Susman the best selling item from the retailer is in fact its readymade roast chicken.
But building that brand and sustaining it over the long-term, in the face of stiff competition and an even stiffer economic climate, is a challenge.
Speaking at a forum at the University of Pretoria’s Gordon Institute of Business Science (GIBS), Susman pointed out that building a sustainable brand has much to do with the philosophy of a business, and how a business “sees its role in the society we live in.”
With over 400 stores across the country and revenues of over R23 billion, it has a 15% share of the clothing market and a 9% market share of the food sector. Susman noted that as a retailer, much of the brand is embodied in the products that it sells to its customer. “You judge your view of Woolies on the products that we create, design and sell to you,” he said.
But key to the brand’s strength has also been the company’s adherence to a set of “deep-seated” values. These values have been what sets the company apart from its competitors, said Susman. They include quality, value for money, providing excellent service, innovation, integrity, energy and ultimately sustainability.
“These values have [become] entrenched in the psyche of our organisation, and increasingly in the psyche of our supplier base,” he explained. For Woolworths, the embodiment of those values, particularly that of sustainability, has been through its ‘Good Business Journey’, the drive by the company to pursue four key priorities – accelerate transformation, drive social development, enhance its environmental focus and address climate change.
This journey began when the company examined its food business and started to engage with its suppliers and farmers on better ways to produce food. “We thought: there is a similar way to develop our whole business”, he said.
Each pillar of the ‘Good Business Journey’ includes targets across the company to ensure that they are being strengthened. Progress is measured twice a year, while five-year targets have been scheduled for assessment in 2012. A central team monitors and challenges these targets across the organisation, while they are reviewed at the highest level of the company.
“ This is integrated from the ground up in the organisation,” said Susman. “If we do this properly we absolutely fatten our brand. If we make our business sustainable we add a depth to the brand, some of which touches our customers, all of which touches our internal stakeholders.”
Comments Michael Goldman, senior lecturer in marketing at GIBS, “Strong consumer brands are often built through a singleminded and unapologetic focus on a set of values that resonate with the chosen target market segment. The addition of sustainability as Woolies' seventh employee and brand value marks an impressive revitalisation of the brand, and bodes well for their ongoing premium positioning.”
Pursuit of these goals has in turn led to exciting innovations within the organisation. Under social development for instance, programmes such as the MySchool programme have been a major success he said. The company gives a small portion, around 0,6%, of a customer’s purchase to a school of his or her choice. The programme raised over R25 million for schools last year alone.
But it is not simply Woolworths’ customers or its consumers that benefit, said Susman. In its bid to enhance the environment the company has undertaken a number of steps that not only work to encourage a sustainable environment, but also save it money and increase its returns.
Susman gives the example of one of