Around 1991, an article had been published describing the “latest and greatest” technology in supermarket shopping at a store called Pennywise in Adelaide, South Australia.
Woolworths New Zealand’s Managing Director at the time, Graham Evans, and Des Flynn were disappointed to find it was just manual catalogue shopping, which general merchandise mail-order businesses had used frequently.
Time moved on, and Flynn became Chief Executive at Foodtown Supermarkets in the early 90s, where he played a major role in developing the Foodtown Loyalty Card, the forerunner to OneCard, and helped launch customer-specific, relevant direct marketing.
The internet was in its formative stages, and he wondered whether Pennywise catalogue shopping could translate into real-time internet shopping, despite some business leaders declining to invest.
When Flynn returned to Woolworths as Director Marketing and Business Development for the Group, he resumed developing the online store as Woolworths Online. Given how his project had previously been treated, Flynn was determined to “make this thing work even if it was the last thing I ever did”, and the Woolworths lead team strongly supported him.
Some of the biggest challenges Flynn mentioned included ensuring the customer experience was simple and defining a cost-efficient fulfilment model. He said Sainsbury’s UK had invested millions in a dark store, and Woolworths couldn't justify the investment required to build a model that would doubtfully ever be profitable.
While visiting London, Flynn also met with Tesco to review their newly launched Tesco Clubcard and back-end operations, and each shared the progress being made in developing the online shopping channel.
Both faced the same major hurdle: developing the customer fulfilment model. In the previous few days, Tesco solved the issue by using a store-based process: picking, packing, and dispatching directly from the store.
Woolworths developed its own shop-floor picking model and used excess stockroom space for packing and delivery. Woolworths still uses this model today for most of its fulfilment.
Des Flynn
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