Redefining the role of the store in Australasia

As online channels continue to grow and shopper expectations rise, leading retailers in Australia and New Zealand are rethinking the role of the physical store. The most successful operators are redesigning stores around three priorities: creating reasons to visit, enabling seamless omnichannel fulfilment and building deeper loyalty ecosystems.

Giving shoppers more reasons to visit

One of the most striking themes during our last research trip was the amount of space being dedicated to fresh food, foodservice and meal solutions.

Woolworths is simplifying meal planning by merchandising proteins, sides and fresh produce together around meal occasions. Rather than asking shoppers to navigate multiple departments, the retailer is reducing friction and helping customers solve the "what's for dinner?" mission more quickly.

This Winston Hill store is a great example of one-stop-shop that brings together, protein, sizes and fresh produce in one section, removing the need to walk the entire store for a single meal.

The customer experience is also becoming a key differentiator.

Coles Local Glen Iris demonstrates how colleague engagement can become a competitive advantage. Store manager James regularly interacts with shoppers and shares his grandmother's pasta recipe, helping create personal connections that are difficult to replicate online. The store members are also trained to go the extra mile, offering a free donut or a small token to appreciate shoppers.

As AI and digital tools become more common, human interaction is becoming an increasingly valuable differentiator.

Another interesting trend is to position counters as a point of difference for discovery. These spaces encourage browsing, inspiration and higher-value purchases.

In New World Stonefields, shoppers are invited to “build a bouquet” with the onsite florist. Apart from getting a customised bouquet, they can buy other gifts such as candles, home fragrances and baby products.  The seafood counter draws shoppers with new products for entertaining, where shoppers can buy a selection of cooked and chilled seafood delicacies.  

Designing stores for omnichannel growth

While retailers are enhancing the in-store experience, they are also redesigning stores to support growing omnichannel demand.

Many stores are now being configured with fulfilment in mind from the outset. Dedicated picking solutions are helping teams fulfil online orders more efficiently while minimising disruption to shoppers.

New World Point Chevalier illustrates how new stores are being designed with fulfilment built in from day one. Dedicated staging space and more efficient picking technology help improve productivity.

As part of Foodstuffs, New World uses Tesco’s technology (under Transcend Retail Solutions) for in-store picking which is known to reduce picking time significantly.

Woolworths in Australia has a very popular direct-to-boot service, where shoppers can collect their online shopping in the carparks of the supermarket. However, there are shoppers who want to collect their shopping by foot, which is a challenge if the staging area in underground, where the carparks are in the building.

Woolworths in Winston Hill Mall is now adding a pick up area on the same level as the supermarket, providing another way to fulfil online orders. This area is also accessible to quick commerce players who may enter from the ground level.

Building loyalty ecosystems beyond the weekly shop

Loyalty remains a powerful growth lever, but retailers are building broader ecosystems around their loyalty propositions. By connecting rewards, services, partnerships and personalised offers, they are creating additional reasons for customers to engage with their brands beyond the weekly shop.

In New Zealand, Foodstuffs is launching a new loyalty programme, Club +, that brings together its three banners: Pak N Save, New World and Four Square. This is the first time that Pak N Save and Four Square are participating in a loyalty programme. Apart from supermarkets, shoppers can also get fuel discounts and there are more partner benefits that will be added at later stages.

As competition intensifies, loyalty programmes are also becoming less about retention alone and more about creating ongoing engagement that supports long-term growth.

For the first time, Woolworths New Zealand is running a promotion that is unique to shoppers buying in-store. Shoppers who buy participating products and scan their membership cards have a chance to win instant money off their shopping. This is a great way to create traffic to the store, and excitement for shoppers.

Perhaps the biggest lesson from Australia and New Zealand is that growth is no longer coming from a single channel. The retailers winning today are those that can simultaneously inspire shoppers in-store, serve them seamlessly online and maintain an ongoing relationship through loyalty.

Read more about how online is growing in our recently launched Global online trends.