Woolworths customer service
consultants, Yolande Nyangiwe and
Marie Francis

stakeholder engagement - what we're doing

In 2007 we reported that we would focus on embedding stakeholder engagement as an integral part of our business operations, deepening and extending our relationships. Over the past year we have made significant progress.


customers

Woolworths strives to be South Africa’s leading retail brand, offering merchandise that is remarkably affordable with a unique combination of superb quality and value and exciting innovation and style. Woolworths customers are at the heart of the retail strategy and drive all merchandising and selling decisions.

Understanding customer needs is critical to providing the right product at the right time in the specific store where customers expect to find what they are looking for. Woolworths has five cards that assist to track customer trends. Woolworths has 4.5 million customers, and regular research is conducted with focus groups. The insights from customers enrich our segmentation model and drive new opportunities. The data assists the buying teams to deliver relevant product assortments at appropriate pricing that accurately reflects customers’ needs for great product at great value.

Woolworths is committed to meeting customers’ needs at every level and we monitor customer satisfaction throughout the business using various mechanisms including:

  • Focus groups and discussions with an 80 000-strong customer panel;
  • desk research providing consumer insights and customer profiles;
  • customer surveys, mystery shopping surveys and research;
  • marketing communication, advertising and direct customer mail;
  • Woolworths call centres; and
  • meeting with consumer groups and the Consumer
    Goods Council of South Africa.

Input from all sources is collated and addressed on a regular, formal basis, from board level input to corrective action at an operational level.

Woolworths continues to develop and sustain loyal customer relationships through segmented and targeted direct communications. World magazine is distributed to 160 000 customers monthly, showcasing the latest product offering in stores in an exciting and accessible format. Direct mail to selected customer segments was an important focus over the last year.

Implementation of the Customer relationship management (CRM) systems continued, with significant progress made in our ability to analyse customer data such as customer shopping habits and basket size.

employees

The independent Beehive survey is conducted annually to measure perceptions of organisational development towards a modern culture. A sample of 2 602 employees completed the survey in 2008. The results have consistently improved from the initial survey in 2004, and showed an increase of 217% over three years.

As expected, however, the 2008 results show a decline of a few percentage points due to rapid organisational change and infusion of new talent.

Issues raised in the survey are being actively addressed to ensure the new structures, processes and systems are implemented quickly and efficiently to drive strategy execution and ensure continuous improvement of the score.

shareholders

Maintaining and growing our credibility among shareholders and the broader investment community is a key objective. This is done by providing relevant, timeous and transparent communication using a variety of different media to allow far-reaching access to information, ensuring all our shareholders enjoy a thorough understanding of our performance and strategy going forward.

Bi-annual investor briefings are held at the time of the interim and final results and ongoing meetings throughout the year take place between key investors and senior members of the Woolworths team. Woolworths also participates in appropriate investor roadshows, both locally and abroad.

suppliers

Woolworths operates a tightly integrated network of suppliers, to ensure exacting quality standards and forms long lasting relationships with its suppliers. Conformance to the Woolworths supplier code of business principles is a prerequisite to ensure social and environmental responsibility across the supply chain.

franchisees

The Woolworths franchise model allows for the expansion of the brand, but requires ongoing alignment to ensure a consistent shopping experience to customers. Further entrenchment of the Good business journey programme within franchise businesses will be a key initiative in the year ahead.

government relations

Interaction with key, relevant government departments is ongoing, addressing areas of mutual concern and issues of the day, and engaging in constructive dialogue, for example: extensive engagement with the dti over local clothing procurement; ongoing engagement around the National Credit Act; and ongoing engagement with the dti on issues of transformation, especially around progress on EE. Woolworths was one of the companies selected by the dti for a Director general review, with positive engagement taking place between the parties.

The Minister of Labour, Mr Membathisi Mdladlana, visited Woolworths in 2008 and participated in fruitful discussions with members of the board and senior management staff of the organisation.

media

Raising the profile of the key sustainability issues in South Africa is an integral part of Woolworths commitment to the Good business journey.

Woolworths ongoing reactive and proactive engagement with the media has been an important aspect of managing the company’s corporate reputation and raising awareness of key sustainability issues. Media engagement since the announcement of the Good business journey has included an additional emphasis on issues of sustainability – both in terms of the type of queries received by the business and the emphasis given to sustainability issues in the business’ response to the media. Around 30% of incoming media inquiries continue to relate to an aspect of the Good business journey.

sustainability forums and leadership

In preparing to announce the Good business journey focus, Woolworths engaged extensively with key stakeholders in sustainability, seeking advice and input into the plans and commitments. This process is ongoing and Woolworths is actively engaging in sustainability forums where business’ input and views are relevant to driving sustainable and systemic change. Participation in academic research and university programmes forms an important component of gaining feedback and sharing experiences as part of the growing sustainability debate.

Woolworths also partners with a broad range of non-profit organisations across a range of environmental and social issues. This includes WWF, Conservation International, Food and Trees for Africa and Heartbeat, amongst others.

Our stakeholders Why we engage Issues on which we
engage include:		 How we engage Our response
Customers In order to:
  • understand our customer needs;
  • enhance the Woolworths brand; and
  • grow revenue.
  • consumer preferences;
  • consumer complaints and issues; and
  • The Good business journey.
 Electronic and personal engagement with customers including:
  • in store ticketing, labelling and packaging
  • focus groups and discussions;
  • desk research;
  • customer surveys, mystery shopping surveys;
  • marketing communication, advertising and direct customer mail; and
  • Woolworths call centres.
  • ongoing product development and innovation;
  • business focus on key issues, for example availability, product choice, store location and service; and
  • adopting methods of communication to meet customer preferences.
Employees and service providers:
  • individuals;
  • collective;
  • independent contractors; and
  • service providers.
 In order to:
  • share relevant information and get input and feedback;
  • attract and retain talent;
  • develop a high performance organisation;
  • improve competence and skills;
  • optimise delivery and service; and
  • enhance people’s sense of value and commitment.
  • Woolworths vision and values;
  • business strategy;
  • products and campaigns that affect employees;
  • employee development programmes; and
  • employee concerns and issues.
  • ongoing direct and indirect engagement – electronic, verbal and written;
  • research;
  • communication and involvement forums, for example Woolies Way; and
  • regular, formal communication, including television broadcasts, publications and team meetings.
 Ongoing review of:
  • employee health and safety programmes, for example, HIV/Aids programmes;
  • employee development, remuneration and benefits;
  • communication and its effectiveness; and
  • relevant business issues, for example shrinkage and uniforms.
Shareholders:
  • individual; and
  • institutional.
 To create:
  • an informed perception of Woolworths;
  • more accurate expectations;
  • a positive investment environment;
  • value in the business; and
  • approval for corporate actions.
  • business performance;
  • business expectations and strategy; and
  • economic, social and environmental concerns.
  • annual general meeting/general meetings;
  • bi-annual analysts’ results review;
  • individual, documented analysts’ meetings; and
  • reporting, including the annual report, sustainability report and website updates.
  • revised reporting formats as deemed necessary.
Suppliers:
  • local; and
  • international.
 To deliver:
  • product which furthers the ambitions of our Good business journey;
  • new and innovative product;
  • consistent quality and standards; and
  • conformance to Woolworths supplier business principles.
  • issues that pose a risk to the Woolworths
  • business and/or brand;
  • product development;
  • environmental and social responsibility standards; and
  • the Good business journey.
  • ongoing electronic and personal engagement,
  • including supplier conferences and supplier visits; and
  • best practice research and international benchmarking.
  • review of product offering;
  • availability strategy; and
  • regular environmental and social responsibility audits.
Franchisees:
  • local; and
  • international.
 To:
  • ensure a consistent customer experience;
  • grow revenue; and
  • build and extend the reach of the Woolworths brand.
  • business issues;
  • initiatives; and
  • opportunities.
  • ongoing electronic and personal engagement, including meetings, an annual franchise conference and regular franchise buying weeks.
  • reviewing our processes for managing the business.
Government departments of:
  • Trade and industry (dti);
  • Labour;
  • Agriculture;
  • Water affairs and forestry (DWAF);
  • Environmental affairs and tourism (Deat);
  • Health; and
  • Education.
 In order to:
  • discuss issues of mutual concern;
  • optimise opportunities and minimise risks of regulation: and
  • anticipate and assess potential policy and regulatory impact.
  • trade and industry policy on sector development, trade issues and growth;
  • labour market issues regarding flexibility, skills, minimum standards, labour relations;
  • food standards and agricultural issues;
  • consumer credit and protection issues;
  • education; and
  • transformation and the Good business journey.
  • ongoing electronic and personal engagement;
  • drafting of submissions;
  • consolidation of information;
  • participation in research;
  • meetings with government officials and ministers; and
  • Nedlac.
  • consolidation of combined retail positions as input to government;
  • sharing of information on business practice with government; and
  • revision of processes to become compliant.
Organised business:
  • BUSA;
  • Retailers’ Association;
  • Consumer Credit Association; and
  • National Business Initiative (NBI).
 In order to:
  • gain support and leverage on issues of common interest; and
  • get insight into other business and sector approaches.
  • trade and industry policy;
  • crime;
  • labour market regulations;
  • textiles and clothing procurement policies;
  • real estate issues;
  • consumer credit and protection regulations; and
  • sustainability.
  • ongoing electronic and personal engagement;
  • meetings;
  • negotiations; and
  • drafting and input to documentation.
  • refinement and shifting of positions to accommodate broader interests
  • participation in Business Against Crime initiative;
  • co-ordination of retail input to textile and clothing issues; and
  • participation in specific initiatives, for example the NBI’s Energy Accord.
Unions and collective employee structures including:
  • internal communications forums; and
  • SACCAWU and COSATU.
 To engage on collective employment issues.
  • wages and terms and conditions of employment (UPN only);
  • verification of union membership;
  • retail issues; and
  • textiles and clothing issues.
  • ongoing electronic and personal engagement;
  • meetings; and
  • participation in CCMA, Nedlac and other labour market institutions.
  • a better understanding and response to employee concerns; and
  • revision of remuneration and benefits policies.
Media:
  • business;
  • consumer; and
  • trade.
 In order to:
  • influence stakeholder perceptions;
  • build the Woolworths brands; and
  • market the business and products.
  • business issues;
  • consumer issues;
  • macro-economic issues that affect retail; and
  • product information.
  • ongoing electronic and personal engagement;
  • interviews;
  • news releases; and
  • publications, including printed material and electronic format on websites.
  • ongoing review and challenging of business practices;
  • improved transparency; and
  • improved information provision.
NGOs and community organisations including:
  • Food and Trees for Africa;
  • Heartbeat;
  • Association of Dieticians (ADSA);
  • South African Association for Food Science and Technology (SAAFoST);
  • Consumer pressure groups;
  • Consumer Goods Council of SA (CGCSA); and
  • Environmental organisations including: WWF, Conservation International and the Landmark Foundation
 To contribute to the society in which we trade.
  • the Good business journey;
  • education and capacity-building on relevant community issues, for example nutrition;
  • HIV/Aids awareness; and
  • input to our product strategy and range.
  • ongoing electronic and personal engagement; and
  • joint projects.
  • ongoing modifications to product strategy and range;
  • modification of HIV/Aids strategy; and
  • greater transparency and communication, for example labelling.

stakeholder engagement - where we're going

  • Become more focused on which organisations we partner with across the business to ensure a more consistent approach to Good business journey implementation, and source relevant expertise for our most challenging issues;
  • use research to drive effective engagement with all Woolworths employees around key current business issues including the Good business journey;
  • communicate our Good business journey initiatives to customers and involve them more closely in the programme;
  • become more customer-centric using the deeper understanding of the customer to drive decision-making. Woolworths will continue to develop a deeper understanding of shopping habits, taste levels, cross-shopping trends and store formats that are best suited for different customer segments;
  • introduce more direct communication with customers using electronic media, to improve interaction and reduce paper usage in line with the Good business journey;
  • improve value perception through enhanced value messaging to support Woolworths position in the marketplace, especially under current economic conditions;
  • develop a new loyalty programme and identify new customer segments;
  • work with all levels of government in developing holistic solutions to Good business journey issues, such as waste management and recycling; and
  • continue to engage with the media and sustainability forums to share the leanings of our Good business journey programme and profile our progress when needed.