COMM1180 Value Creation
Final Exam Mock LRVE Question
T2 2024
LRVE Mock Exam Question 1
Woolworths launches app to deliver groceries in under an hour
Woolworths is launching a new quick delivery app across dozens of Sydney suburbs where groceries can be dropped directly to your door within an hour.
The service, called Metro 60, has staff pack your order from the shelves before it's dropped at your door by delivery partner Uber for an extra fee of $5. Customers have to spend a minimum of $20.
"Customers can get their food and groceries delivered to them in 60 minutes," Woolworths Chief Transformation Officer Von Ingram said.
"Speed is becoming the new point of competition for online food and grocery competitors," retail expert Garry Mortimer said.
Customers can choose from 4000 items stocked in smaller Metro stores, including fruit and vegetables, pantry staples, hot chickens, fresh sushi, flower arrangements and pet food.
"It's astore for ultra convenience, it's about being easy, fresh and local for the neighbourhood that it serves," Ingram said.
"We're really excited by some of the local and Australian brands that we have like the bread and butter project."
It's now indirect competition with existing services like Milk Run and Door Dash.
"I think the challenge that they face is range and price, you might be able to get a small selection or a slightly higher price delivered pretty quickly," Mortimer said.
"But most shoppers tend to look to the major supermarkets for major brands and lower prices."
https://www.9news.com.au/national/woolworths-launches-metro-60-app-to-deliver-groceries-in- an-hour/8076479e-72e8-457a-90e5-ec9faed22130
Required:
Woolworths is launching a new quick delivery app across dozens of Sydney suburbs where groceries can be dropped directly to your door within an hour. Please discuss, drawing on your understanding of creating value for and from customers market segmentation and competitor pricing, possible reasons for this decision, and potential downsides.
Guidance to Q1
Segmentation:
• Characteristics (demographic and behavioural) of deli customers: who buys during the day, who buys early in the morning and in the evening? Do these segments align with the new opening hours?
• Customer Value = benefits – cost
• Benefits at the deli are things like greater range, perceived freshness, being able to choose the right amount, seek advice from staff member … Costs are the wait, and potentially higher unit costs …
• Benefits of the Fresh Convenience range could be time savings, choosing your own …