Wool­worths: build­ing a sus­tain­able brand

Finweek English Edition - - Companies & Markets -

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

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