Big W Owners Go After Media Revenue As Profits Tumble

Woolworths the owners of the struggling Big W variety stores is moving to strip revenue away from media Companies by getting suppliers to divert advertising money to their own in store advertising network.

The Company who are well known for bullying brands to invest marketing dollars with their retail marketing now want their suppliers to open up a new revenue stream for Woolworths in an effort to top up bottom line profits. Big W lost over $100M dollars last year.

A new Big W digital billboard advertising network is being installed across Woolworths supermarkets, liquor stores BWS and Dan Murphy’s, as part of the retail giant’s overall shake-up aimed at getting brands to spend more money with Woolworths as opposed to TV networks magazines and outdoor billboard Companies.

The retailer who is currently shutting down 30 Big W stores because of poor management and a lack of sales has established a new media business, called Cartology which is being run by Cartology managing director Mike Tyquin whose job is to convince brands to shift their revenue streams to Woolworths entities.

One supplier told ChannelNews that Woolworths and Big W management are “very good at bullying brands into spending money with them”.

“Spending on this network will become just one of the many discussions that buyers will be having with brands in an effort to divert revenue away from a traditional media Company to Woolworths” they said.

Cartology was launched in March with Woolworths telling brands that they can target shoppers instore, online and in Woolworths other media assets that the Company has been developing to keep revenue away from traditional Media Companies who are already suffering because of Google and Facebook penetration of traditional media Company revenue streams.

Cartology managing director Mike Tyquin, who ran outdoor advertising business Adshel prior to its purchase by oOh! media last year, joined Woolworths in March to lead the newly established media business.

He is claiming that Woolworths is able to deliver “superior data” than a traditional media Company.

This is the same Company that is now looking to eliminate discounts in an effort to deliver improved profitability.

Research Company IbisWorld claims that while competition remains high, strong price-based competition and heavy discounting strategies have become less prevalent for supermarkets such as Woolworths over the past two years. As a result, prices for many grocery items have been rising after an extended period of decline.

“As a result, Woolworths have shifted their strategic focus from increasing market share to boosting profit margins, along with streamlining their corporate structures” the Company said in a new report.

One of those Corporate structures is to find ways to pressure brands to spend on Woolworths media operations.

The Company is also set to use all the personal data they collect via their loyalty cards and credit card spends at the till to build category profiles on individual customers and their buying habits.

“We run the data through our personalisation engine, which is something unique to Woolworths “Tyquin said.

“We’re moving well beyond generic targeting, personas and alike that most media companies are working with, into actual targeting based on the actions and behaviours of customers that we’ve seen and the predictive tools we’ve got in our personalisation engine.”

Paid search will be available for suppliers to supermarkets from next week.

Woolworths expects the screen network to be rolled out in supermarkets by end of the second quarter of 2019-20 followed by Big W stores.

The Company is also looking at milking revenue from consumer electronics and appliance brands with a specialist screen networks. Tyquin said Woolworths won’t be overloading stores with new screens.

Cartology fits into a plan set out by Woolworths chief executive Brad Banducci where the group hopes to generate earnings via partnerships, leaning on its rewards and payments businesses, media and data analytics business, using its supply chain and potentially IT infrastructure, applications, payroll and transaction services for other businesses to basically pay for shortfalls on profits from selling goods.