Coles 3.0 and Woolworths 3.0, Australia's two supermarket giants are quietly but aggressively changing the way they do business.  The rules of competitive engagement have shifted as the game has moved on. Online shopping, an increasing number of time-poor convenience driven shopper and wave of new competitors have converged and our dominant supermarket chains need to change as their traditional models are being disrupted. 

According to Coles supermarket group their strategy would be not so much about growing sales - it's about retaining market share over the next five years in what it described as the most competitive market in its history. Gone are the decades long battles on “space race” which prompted competitors to open new stores. And the paradigm has also shifted away from just a race to the bottom on price. The new marketing mantra are centred to the turbo-charged ‘customer obsessed’, and no longer ‘customer focused’. The big supermarkets have finally accepted the rise of the new convenience-driven shopper and surrendered resistance to the forces of the digital era. Thus, supermarkets that have tended to skew their businesses to the traditional model customer now recognise they have what Coles’ boss Steven Cain refers to as a "tale of two shoppers".

This new category of the time-poor shopper is growing at a pace that means it can no longer be ignored. The convenience shopper either buys online or picks up ready made meals in store. Retailers were forced to recognise and adjust towards online sales, almost 10 years ago, but supermarkets had been largely able to ignore this trend.

Mr. Cain said Coles would differentiate itself from competitors Woolworths and Aldi by having a leading online offer, its low-priced home brand products and by delivering better prices and an overall structural advantage through the use of automation and technology. The Coles supermarket group says it will set itself up for long-term growth by cutting $1 billion in costs from its business over the next four years through the better use of technology and automation, while cutting staff in office roles.

Source: The Sydney Morning Herald

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