When a retailer launches a new and improves pricing system and online retail marketing strategy, the last thing they want is IT issues stalling implementation and messing up prices.


Woolworths (major Australian grocery retailer) understands the pain of bad IT systems from past experience. So, when they launched WooliesX, they brought all their learning to the fore when designing and developing with online retail marketing strategy.


Like many retailers know, an under-done IT capability and outdated data systems can seriously mess up price changes or improvement programmes. Especially those who are trying hard to implement value-based pricing or dynamic pricing.


At Taylor Wells advisory, we strongly believe that retailers need to get their IT and online retail marketing strategy right to ensure that capitalise on their product portfolios using pricing (or even survive) in the next few years.


Price transparency, price trust, and fair pricing are very important to consumers and the ACCC alike. A poor IT capability can mess up your channel pricing and online retail marketing strategy. Leaving your firm exposed to allegations of price gouging simply because prices were messed up in the system. 


In this article, we’ll be discussing WooliesX case study in more detail to understand their pricing journey. We will be discussing WooliesX’s involvement in B2C retail pricing and online retail marketing strategy and WooliesX’s involvement in B2B groceries and supplies. We contend that retailers that improve their IT capability in conjunction with their pricing frameworks and structures are more likely to pull off the latest pricing strategy and in turn drive business growth plans.


By the end of this article, you will learn how leading Australian supermarket retailer, Woolworths is growing share of both the B2C and B2B market by improving their online retail marketing strategy, supermarket pricing strategies and IT capability. 


Table of Contents:

I. WooliesX Online B2B & Retail Marketing Strategy

II. Price Trust: Why Australian Retailers are Losing Revenue?

III. The Best Retail Pricing Tools & Skills



online retail marketing strategy

WooliesX Online B2B & Retail Marketing Strategy


Woolworth’s Online Retail Marketing Strategy (Consumer)


The Australian retail giant, Woolworths is creating new business and pricing models under the moniker ‘WooliesX’. WooliesX is the new collective name for their e-commerce, digital, customer services teams, pricing, and customer loyalty and rewards initiatives for their B2C segment. WooliesX also drives the development of their new B2B pricing, marketing and product strategy and analytics initiatives for their newly created B2B segment too (as discussed below). In short, it is one overarching division that runs Woolworths’ innovation and digital operations with a mandate to capitalise on the economic value of Woolworths’ multiple business models now and in the future.


An important B2C pricing and marketing initiative for WooliesX over the last couple of years has been customer experience. Consumers wanted more from the retailer. Woolworth in turn unveiled a new checkout-free grocery experience. The rationale being a better checkout experience would make for a faster and easier shopping experience for busy shoppers too.


In a way, WooliesX is trying to redesign a new style of shopping in Australia and here’s how…


The supermarket chain is getting more high tech. WooliesX digital team, for example, has developed the Scan&Go mobile phone app allowing customers (who belong to the Woolworths Rewards scheme) to scan the product barcodes in customers’ trolleys as they walk through the store. Technically speaking, the app allows customers to simply leave the shop after purchasing the items they need. They’ll no longer have to wait to pay at the cash register. Rather, the money for goods will be debited from their accounts when customers ‘tap off’ on a pole at a dedicated kiosk. Kind of like the new Sydney trains payment system.


Woolworths has invested heavily in this Scan&Go technology because they’ll get more customer and pricing insights from their shoppers using this software. In essence, Woolworths can now track how much shoppers are spending as they shop with them. Including what shoppers spend their money on with greater precision and real-time data. The benefit of Scan&Go for consumers, conversely, is that they’ll get the super convenient in-store experience that they wanted. They’ll avoid long queues and unpacking and scanning large shopping trolleys of food at tiny self-checkout counters. All in all, WooliesX has used better IT to improve the checkout experience and track the success of their new model of shopping, pricing, promotional campaigns and product strategies.


Woolworths’ B2B platform: “Woolworths at Work” (B2B)


Since 2016, WooliesX has also been quietly planning their entry into the B2B grocery space for B2B businesses. On the 2nd of September, they officially launched their new B2B platform. The supermarket retailer revealed its new digital platform, naming it ‘Woolworths at Work’. The platform is an extension of their existing online grocery business.


Essentially, Woolworths want to be (and fairly soon) the leading one-stop-shop for all B2B firms groceries and probably their office supplies need too. They see their share of the consumer groceries market shrinking and see growth opportunities in the B2B segment. So now, they have officially launched ‘Woolworths at Work’ to span and grow their empire.


Key parts of WooliesX strategy to enter B2B grocery are IT, data and optimisation.


To be a one-stop-shop for all their B2B customers’ grocery needs in Australia, WooliesX has essentially done what most of its competitors in this space have not done. In short, they have invested in IT to build an online B2B platform that directly services its customers’ needs. Then, once they have the price and customer data they need; and all keyed up in data structures, they’ll optimise prices across their vast product portfolio to extract the full profit value from it.


For example, WoolesX division has created a high-quality online grocery delivery platform for B2B firms. For the first time ever, they have enabled businesses (SMEs and large organisations) to pick and choose between hundreds of thousands of products online. Which means ‘Woolworths as Work’ is like no other offer in the B2B grocery market. Because, now, businesses can shop online for food, stationery and other products – just like consumers do. What’s more, Woolworths delivers to multiple locations across Australia for them too.


There are no pre-sales or sales teams involved. A more efficient supply chain. No distributors. And a more precise measure of customer willingness to pay now and predictive analytics for the future.


‘Woolworths at Work’ is a seamless one-stop-offer for businesses, which for many years until now have been used to an old fashioned tractional model. Smashing this traditional business and pricing model means the customer gets lots more value and Woolworths get all customer relationships staying firmly within the Woolworths ecosystem.


Finally, in terms of payment systems and revenue model, ‘Woolworths at Work’ is making it easier for businesses to buy from them. For example, they have combined the features with Australian buy now, pay later (BNPL) operator called Openpay. Meaning, business owners can take advantage of a line of credit on their purchases. The design also includes providing consolidated invoicing on a monthly basis for better visibility and control of spending in all companies and firms. The platform expects to generate $1billion in revenue for the retail giant as early as 2024.


Woolworths’ General Manager Jara Nass stated that the main reason why they launched the service was that they want to partner with Australian organisations, providing them with tailored options.


The manager further said, “The platform is built around a seamless, personalised shopping experience, that enables shoppers to save lists and access previous orders. It’s supported by our nationwide delivery options, including free next day delivery for orders over $99 and Delivery Now, which sees your order picked, packed and delivered within two hours.”


As regards to terms and conditions, Woolworths has addressed differences in pricing between the B2B store and retailers or normal online businesses. And it stated that they were “not required or obliged” to price-match with them. In addition, product pricing may also differ between cities.



Importance of A World Class IT Capability in Online Retail Marketing Strategy


To better understand the revenue and pricing opportunities available for all major retailers, it’s essential to learn more about why better IT and business intelligence is foremost on the agenda. Two crucial things have changed since the introduction of AI pricing and better technology in grocery retailing. These are — data and computing power.


  • Computing power has become easier to access and more powerful. Smartphone has millions of times more calculating power than the computers NASA used in the Apollo missions during the 1960s. Companies can now use unlimited computing power on which to input their AI algorithms.


  • The other critical factor is the huge data available, especially in retail. AI systems – especially machine learning – thrive on large, rich data sets. When inputting the data, the systems analyses trends, patterns, and correlations that no human analyst could ever find.


New platform systems are basically run off automated data analysis. In turn, enabling retailing powerhouse teams like WooliesX to create models that can make useful predictions about other similar data.


Suitability of IT For Retail Pricing & Business Models


The speed of technology now has made it easier for retailers like Woolworths to accelerate ROI from IT and pricing. 


  • The first reason is the ability to test and measure. With the right safeguards, retail giants can deploy new IT. Then test and measure consumer responses to prices, products, promotions, stores appearance, layout, etc. They can also directly measure the effect on their bottom line quite quickly.


  • The second reason is the small chance of a mistake. An AI app like Scan&Go that makes millions of decisions every day can afford to make some mistakes. They’ll definitely make fewer mistakes than humans. What’s more, they speed throughput/foot traffic in the store. As long as the overall effect is positive, the cost of mistakes is less. 


Challenges of Improving IT For Your Online Retail Marketing Strategy


The real challenge still remaining for supermarkets, then is how to apply IT. On how to ensure they’re setting the right price and the right promotion to the right product and right customer. By no means, an easy task. 


  • Retail pricing optimisation is a sophisticated undertaking, requiring data analysis at a basic level for each customer, product and transaction.


  • For it to be effective, continuous factors need to be analysed; like how sales are impacted by changing price points over time, seasonality, weather and competitors’ promotions, segmentation.


  • A well-programmed IT pricing system can factor in all of these variations, combining them with additional details such as; purchase histories, product preferences and a lot more to develop the right pricing method suited to maximise revenue and profit.


  • Like any other apps that study lifestyle habits, the pricing team and developers can develop and adapt the pricing algorithm. One that suits the market and customer base while the system automatically adjust.




  • This shift from reactive to predictive marketing will revolutionise the way people shop and how retailers price. This includes better retail product prices, promotions and offers shoppers never really thought about before. Yet, when they see them really want them (and can’t believe they lived without them). 


  • In an environment of intense competition and continued shelf price deflation; online is delivering an increase of the major retailers’ overall sales growth. As is owning distribution and delivery of goods to customers.


  • Both online and distribution, then provide online retail platforms more price premiums in highly competitive retailing markets. For example, the real haymaker for digital retailing is the combination of faster vehicle access coupled with stabilised and differential delivery prices that can be bought on a regular subscription.


  • In the “membership economy,” the moment of transaction is the starting line, not just the finish line. Investment in market analysis to understand the most promising target audience, identify lookalikes, and help onboard new subscribers will be crucial.




The shift from reactive to predictive marketing is changing the shopping habits of the consumers by studying what we buy. Better technology can help the pricing team make better pricing options and faster. Especially on items going on sale or getting the best deal.


Therefore, the new battleground for retail business is not price. But rather how well and fast teams and their firms adapt to better business and pricing models. Without the right algorithms for pricing and predictive marketing; and without providing customers with what they want, retailers like Woolworths will never get to the position where they are making money out of large investment in IT.


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online retail marketing strategy

Price Trust: Why Australian Retailers are Losing Revenue? 💳

The latest research by the Corporate Executive Board reveals Australian Retailers are losing hard-earned revenue due to a phenomenon called ‘consumer confusion.’


Price Trust


With so many products to choose from; and offers and deals to tempt and entice, Australian shoppers are feeling overwhelmed and just darn confused by so many crazy retail pricing schemes, promos, offers and loyalty programmes. To the point now that shoppers are taking much longer to buy product items, or choosing not to buy at all. A problem which sounds harmless enough, but in fact, a social malaise leading to ongoing profit leakage and increasing cashflow uncertainty for even the biggest Australian retailers.


In this article, we will discuss what price trust is and answer why this is happening. We will provide you with tips on what customers hate about crazy retail product pricing schemes and strategies. Finally, we will share with you a checklist on how to end consumer confusion and regain price trust.


Why is this happening?


Well, sometimes, too much of a good thing is not a good thing at all. The ever increasing product variety and choice available to us is creating a phenomenon called ‘consumer confusion.’  Which basically means that shoppers don’t like it when they’re presented with too many similar brands and products AND illogical variations in prices and promotions. What’s more, they will:


  • Deliberate over their choices
  • Delay the purchase
  • Decide to price shop for a better deal
  • Choose not to buy at all


In short, you need to get shoppers in the mood to buy from you – you can’t force them to buy with discounts they don’t want or don’t even appreciate. Shoppers want to feel happy, safe and content when they walk in your stores – not overwhelmed, confused and under attack. They want to feel like you’ve given them clear but better choices that meet their needs. They want to trust your pricing is fair.


When customers trust you, they buy more and come back to buy more in the future.  Removing complexity from your pricing is a brilliant way to build trust in the price and remove customer confusion. 



Unfortunately, overly complex pricing (price trust) is rife in Australian retail. What’s more, it’s adding to consumer confusion: Starting from the recommended retail price (RRP) right through to promo plans, deep and sporadic discounting practices and outlandish claims of value for rock bottom prices.


One example was when Consumer Packaged Goods king (CPG) P&G cut back one-third of the soap and skincare products and twenty per cent of detergents and fabric care products. Product rationalisation here saw sales grow exponentially. What’s more, customers found they had more time to look at the labels and make selections. CPG found the customers either bought more or at more profitable price points when the shopping experience is more enjoyable or less confusing.


In simple terms, too much variation from the RRP makes shoppers feel too confused to buy from you.  They start to perceive the RRP as fake, made up and over-inflated to benefit the retailer or manufacturer, rather than them. Excessive discounting further compounds this. Shoppers start to pantry load and only buy when products are on promotion. What’s more, low prices confuse them rather than motivate them to buy from you. Too many discounts can stop customers from exploring other product options.


Consumer confusion is a causal driver of excessive customer churn and disengagement.


Here’s what customers hate about crazy retail product pricing schemes and strategies:


  • Choice overload. Consumers don’t like it when a huge assortment of similar products are displayed. It makes deciding which product to buy extremely difficult.


  • Similarity. Consumers don’t like it when two competing brands are so similar in appearance and category that they cannot tell which is which. People want to know which product is best for them within 3-6 seconds or else it confuses them and they move on to the next product.


  • No information. Nothing is more frustrating to shoppers and customers than a brand with no information on what it is used for. It takes too long for shoppers to decide whether to buy it or not.


  • Information overload. This is the opposite of no information. Customers don’t like it when there’s too much information on product labels. It makes the purchase decision more complex and more difficult to understand. You’ll lose your money if customers get confused and won’t buy your products.


  • Consistency failure. Customers don’t like it when the sales pitch or advertising misrepresents the product in some way. It’s disappointing for the customers if the product doesn’t live up to there expectations or hype. In effect, lack of consistency in your discounting means you lose out on cross-selling opportunities and customer share-of-wallet.




Having a massive selection of goods to choose from can be enticing but soon the novelty wears off.


We are only human after all. And research shows that we can only really process seven product items at a time when we are buying something. This is because a coping mechanism kicks in; our purchase decision making slows down due to a bottleneck of information. Research shows, for example, that too many product choices and confusing price levels can make people feel: overwhelmed, indecisive, confused and ultimately not willing to buy or pay. Price response behaviours that we work hard to avoid, not encourage.


Variety and complexity

When shoppers or customers make a decision to buy from us, remember two dominant criteria are ruling their decision-making:


  • The first stage is variety. When we decide to buy an item, we want some variety of the item to choose from  – but not too much variety.
  • The second stage is complexity. When we want something original to buy, too many additional options or value add increases complexity and delays buying decisions.  Premium options, value add additions are all great. But in small doses and when managed correctly through a well-designed product price architecture.

Checklist to put an end to ‘consumer confusion’ and start regaining price trust:


1..Separate what is factual or not

2. Concentrate on what is important

3. Find out if the product pricing strategy is beneficial to the company, the buyers, the business and the public.

4. Understand how people buy and how they value your products.




It’s time to align your pricing and business strategy to your customers and end consumers buying behaviours. Customer’s don’t buy from you when your product range confuses them or when they don’t trust your products price.


Category management or finance skills are not enough to solve this level of pricing problem. We highly recommend building a world-class pricing team to re-design your price and revenue models and product price architecture.


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online retail marketing strategy

The Best Retail Pricing Tools & Skills 🧰


Large pricing skills gaps are emerging as teams pursue more sophisticated pricing and revenue models to keep up with changing markets. Here are four key retail pricing tools and skills your teams will need to know to drive profitable revenue growth in fragmented industries. Followed by four steps to close vital skill gaps without disrupting team morale or performance. 



Retail Pricing Tools


4 Key Retail Pricing Tools & Skills set


Many teams are moving from cost-plus pricing to value-based pricing to proactively respond to growing margin pressure. This skills evolution will demand new value-based thinking and skills, as well as existing cost and market-based pricing skills and approaches to make good retail pricing decisions. 


Given how competitive the labour market is currently for employees with domain pricing expertise, it is critical for businesses to identify and hire the absolute best talent before their competitors. 


Here are the four most critical pricing skills your teams will need to make more revenue and margin in rapidly changing industries and markets:  


  • Technical Pricing Knowledge. As a growing number of your competitors are using algorithmic pricing (AI) to re-define profitable revenue growth in your industry, hence, conscious effort and training are needed for your teams to develop skills in the areas of:
    • pricing systems
    • price data management
    • SKU level analysis
    • dashboard configuration and data/statistical interpretation
    • price & category architecture development.


  • Project management. As wide-scale transformations and price improvement projects continue to accelerate operations and culture shifts, therefore, teams in your department will need to partner with a variety of consultants, software vendors and cross-functional stakeholders to meet productivity and profit objectives. 


  • Change management. Markets are changing quickly, and many price management practices are struggling to drive profitability like they once did. Thus, teams now need to become highly skilled at anticipating and responding to margin pressure and market changes/risk. Consequently, their interaction with multiple stakeholders makes effective change management and persuasion skills critical to price improvement projects. 


  • Value-based mindset. The role of the pricing department requires sales, category and finance teams to understand fundamental pricing principles and customer psychology. Furthermore, creating innovative value-based pricing solutions, product offers and price bundles that can be trialled and implemented quickly and effectively using agile pricing methodology.


4 Steps to Close Skill Gaps with Retail Pricing Tools


Skill gaps in pricing cannot be closed overnight. Therefore, there’s a need to make changes in competency models, role design, career paths and training. There are four imperatives to consider:


1. Redesign your competency model for your commercial department. 

There’s a common assumption in HR that pricing teams and finance teams do roughly the same things. This is a big mistake. There are big differences between pricing, sales and finance – as well as some notably cross-overs. Not knowing what these similarities and differences are is not only creating huge confusion about the role of pricing in your business but in the market as well. 


2. Redesign roles for your commercial department. 

Commercial departments need to revise roles and job descriptions to better reflect emerging skill requirements in commercial departments. They must also avoid using generalised or old job descriptions that fail to clarify evolving skills and expectations.  


4. Train and develop your commercial. 

This is an area in which most pricing teams and commercial departments can improve. Research shows, for example, that commercial executives are either investing too much money in training programmes that don’t deliver enough results. Or investing too little in training, and not helping staff acquire the skills they need to do their jobs properly. 


5. Reorient recruitment for your commercial department. 

A standard recruiting service model isn’t responsive enough to the fast-changing needs of your commercial department. Thus, your teams’ needs, like your business’ needs, must be aligned to changes in the market and changes in the talent market as well.



The role of the commercial department is changing rapidly. Therefore, business operating models are shifting to keep pace with business strategy and digitalisation. New pricing skills and competencies are now in demand. Also many are foreign to cost-plus pricing teams or the stock standard finance department. 

An evolution in commercial capability requires pricing managers and analysts alike to not only be tech-savvy but also to understand critical components of effective price and revenue management and price data architecture design. This evolution refers to both technical and softer skills. Furthermore, the success of many pricing projects now heavily relies on your teams’ ability to collaborate, have factors influencing retail pricing and manage complex price optimisation projects with multiple cross-functional stakeholders.

Commercial departments require a mix of new and existing skills to drive incremental EBIT growth as the business pursues its retail pricing strategies and financial goals in tougher economic times. Given how competitive the labour market is for these pricing skills, particularly in pricing managers, it is critical for HR to identify these skill gaps early and put a plan in place to acquire them. 


In order to keep pace with changing business needs, commercial directors and HR must be deliberate and proactive to acquire needed pricing skills early. Furthermore, those that do will be much better positioned to drive profitability and protect against margin loss.


In today’s war for pricing talent, the quality of your pricing team will be nothing short of competitive advantage.


Click here to access your free pdf guide on driving pricing strategy in your business.


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