countdown online shopping - · pdf file5 to provide an effective interactive shopping network,...
TRANSCRIPT
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Countdown
Online Shopping
Report prepared by: Tonya Wright
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Table of Contents
Executive Summary .......................................................................................................................... 4
Countdown ....................................................................................................................................... 6
Analysis of Business ...................................................................................................................... 6
Analysis of Industry ...................................................................................................................... 7
Analysis of Markets ...................................................................................................................... 8
Shareholders ................................................................................................................................. 9
Stakeholders ................................................................................................................................. 9
Summary of Countdown............................................................................................................. 10
Customer Experience ..................................................................................................................... 11
Countdowns Promised Experience ............................................................................................. 12
Countdown Antecedents ........................................................................................................ 13
Countdown Consequences ..................................................................................................... 14
Customer Behaviour ................................................................................................................... 15
Type of Shopper ..................................................................................................................... 15
Preferences ............................................................................................................................. 16
Branding - Countdown vs. Products ............................................................................................... 17
Real Virtual Experience................................................................................................................... 19
Countdown Service..................................................................................................................... 21
Theoretical Implications ................................................................................................................. 21
Managerial Implications ................................................................................................................. 23
Summary......................................................................................................................................... 24
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Appendix A ..................................................................................................................................... 25
Literature Review Table: ............................................................................................................ 25
Appendix B...................................................................................................................................... 27
Presentation ............................................................................................................................... 27
Appendix C ...................................................................................................................................... 33
Notes from Interview One (Customer A) ................................................................................... 33
Appendix D ..................................................................................................................................... 35
Notes from Interview Two (Customer B) ................................................................................... 35
Appendix E ...................................................................................................................................... 37
Notes from Interview Three (Customer C) ................................................................................. 37
References ...................................................................................................................................... 39
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Executive Summary
The following report has been prepared as Assignment One of Unitec’s Digital Enterprise
Course (APMG 8119). It seeks to investigate the consumer experience in a digital context of
a selected on-line company; Countdown.
In starting this report I will provide the background of the Australian owned company
Countdown and how it has come about to be the largest grocery provider in New Zealand
today. From its original beginnings back in the 1960’s when it was a counter served grocer
to its expansion through purchasing of different entities and the eventual creation of on-line
shopping.
Countdown has built up over the years a number of stores, supporting warehouses,
extensive suppliers, logistic providers and along with significant staff that make up the
holistic picture creating the basis for the on-line shopping platform that consumers use
today. Without this support network on-line shopping would not be the strong and efficient
service it is, evidenced by comments.
Countdown has two main competitors; Pak n Save and New World, both of these companies
are well established in New Zealand, although not as big as Countdown now, but in the past
were strong rivals. In analysing the on-line side of Countdowns business it will also provide
a glimpse into the reasons behind the success Countdown experiences with its bricks and
mortar stores.
To understand how Countdown prospers as an on-line provider we must seek to understand
the customer behaviour of people using the service. By way of doing this I have interviewed
extensively three Customers about their experiences and from that have matched any
occurrences of consumer behaviour with cited literature. Whilst they only make up a very
small sample their experiences are still valuable to gain insight into the perceptions of the
wider community.
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To provide an effective interactive shopping network, Countdown must be able to
communicate it products to its shoppers in a way that draws them in and keeps them
focused on the task at hand; shopping! This experience is called flow and our shoppers
mentioned above will provide us with some real examples of how this works. Part of flow is
how Countdown displays and manages its main stream brands for the on-line shopper
coupled with specials and rewards available to create entity loyalty. Of course all this is only
possible with technology.
This understanding will aid Countdown to manage and direct the on-line experience to be a
rewarding one so that today and in the future they may maintain market dominance.
Important managerial and future implications have also arisen for the director’s
consideration; have they considered a competitive attack and the ability to branch out into
speciality shopping etc.
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Countdown
Analysis of Business
Countdown was originally founded in 1981 and is now an Australian owned grocery store.
Countdown, Foodtown and Woolworths have all been merged to form the now Countdown
brand. Consumers can either shop online or in a bricks and mortar store browsing the isles
for all of their fresh, dry, beer and wine, diary and meat products then proceed to either a
self-service check-out or operated check-out to pack and pay for their items. Online
shoppers are able to browse or search for their products, place an order and have their
groceries delivered to their door.
Some stores are open for 24 hours whilst smaller stores in smaller suburbs have a reduced
times but are still open 7 days a week (except for Christmas Day, Boxing Day, Good Friday
and Easter Sunday in which all stores are closed).
The typical layout of a Countdown physical store is generally the same throughout the
country with fruit and veg first, meat and delicatessen, chilled and dry items and lastly
frozen food and breads. Customers can obtain a one-card which will give discounts on
selected items that week and periodically vouchers are issued for a dollar figure of $15 or
greater to redeem against their next shop. This voucher is only issued if the one-card has
registered enough of a shopper spend in the period and the reward is based on the spend
value. One-card also offers other incentives like addition one-card points etc. Further
petrol vouchers are issued in store when a single grocery shop is greater than a designated
amount and the discount increases the higher the spend.
Online shopping is completed by a quick and easy safe interface that allows for registration
and future on-line browsing via the countdown website at: www.countdown.co.nz.
Shopping lists can be edited and saved which is aimed at reducing the time users need to
take to conduct their business. All savings and rewards are the same as the physical
experience and are redeemed at the check-out as they would be in-store.
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Supermarket
operationsLogistics
Support team
Food plants
Analysis of Industry
Currently there are 160 physical Countdown supermarkets which are located throughout
New Zealand from Invercargill at the bottom of the South Island to Whangarei at the top of
the North Island. They have around 18,423 staff members collectively through-out New
Zealand with the breakdown of work force being:
Supermarket operations 91%
Logistics 3.8%
Support team 2.8%
Food plants 2.4%
Approximately 2.5 million New Zealanders visit Countdown each week via the store or on-
line shopping. And in addition to stocking over 20,000 items from a wide range of producers
and manufactures Countdown offers their own product range; Select, Signature and Home
Brand and others which are items that are produced specifically for Countdown.
To support the stores Countdown also holds:
• 4 dry grocery distribution centres
• 3 fresh produce distribution centres
• 3 chilled and frozen distribution centres
• 2 meat processing plants
• 1 seafood processing plant
• A central support office
The distribution centre in Auckland operates 24 hours 7 days a week to support the stores
through-out the region.
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Analysis of Markets
With the merging of Foodtown, Countdown and Woolworths into one brand Countdown,
New Zealand is now left with only two other major competitors: Pak N Save and New World.
Whilst there are a great deal of smaller operators around, they do not possess more than a
minimal percentage of the three listed above. Some of these smaller companies include:
Fresh Choice, Big Fresh, Tai Ping and The Warehouse (groceries) for instance.
In 1971 Woolworths, who was later to become Countdown acquired Self Help Supermarkets
(SHS). This was poignant because SHS was New Zealand's first self-serve grocery chain
whereby customers now shopped for groceries off the shelf themselves and were no longer
served from behind a counter by a single grocer. From there Woolworths then became the
first to introduce online shopping in 1995 however, “this was early days for online shopping
in New Zealand” (Progressive Enterprises Limited, 2012, pp. Our History, 1995).
Countdowns customers are literally anyone who purchases groceries. In other words any
person who is capable of purchasing and paying for products used in day-to-day
consumption is likely to have visited a Countdown store. Further with the introduction of
on-line shopping Countdown has increased its dedicated customer base as now there is no
one else who provides on-line grocery shopping in New Zealand.
Countdown houses its own small selection of brands but is more considered an
intermediary for the extensive range and brands available to consumers; providing a
convenience, like other supermarkets of collating them into one store.
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Shareholders
Ultimately Countdown is own by two Australian companies: Woolworths International Pty
Limited which holds 95.9% shareholding and Woolworths Managements Pty Limited which
hold 4.1% shareholding. The full breakdown of shareholding is:
Countdown/Progressive has two shareholders; David Chambers and Gideon Thomas
(Ministry of Business, n.d.).
Stakeholders
It would be fair to say that virtually every person in New Zealand has a stakeholding in
Countdown because all products that any person consumes (from babies to elderly) are sold
via a supermarket. Conversely the suppliers that Countdown has are significant as well
being over 800 food producers and suppliers. Some other examples of stakeholders are;
Versacold the distributor for chilled and frozen products goods; a third party logistics
operator along with Freshmax, who manage produce distribution from Auckland,
Wellington and Christchurch (Progressive Enterprises Limited, 2012).
AsureQuality as another stakeholder provides a programme of quality assurance meaning
that Countdown has the ability to rely on a high standard of quality carrying this certification
(Progressive Enterprises Limited, 2012).
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On Countdowns webpage they list a number of other stake holders and members of the
community they as a company have involvement in:
• Countdown Kids Hospital Appeal
• Sophie's Story
• Kaiya's Story
• Sean's Story
• Māori Language Week
• Countdown Food Rescue
• New Zealander of the Year Award
• Alzheimers New Zealand
• The Salvation Army
(Countdown, 2012, p. Community)
In summation, the stakeholders in Countdown are significant and managing these would
require strong communication from both Countdown and their stakeholders to build a good
partnership. One way that Countdown does do this is via business to business
eCommuniation through various means available such as electronic information being sent
via email.
Summary of Countdown
Over the last 50 year grocery shopping has transformed from small locally owned stores to a
large off-shore owned conglomerate it is today. When the three of the five market leaders
merged together to form one brand, Countdown, they also presented a market dominance.
In keeping with this dominance Countdown is still the only store that provides and on-line
shopping service along with a customer loyalty scheme of offering cash discounts on
groceries purchased by way of vouchers.
In New Zealand today countdown would be considered one of the biggest brand names
around with its two rivals New World and Pak N Save struggling to keep a share in a very
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competitive market. Until Pak n Save or New World join the ever increasing trend of on-line
shopping then long term they will lose even more presence than they currently hold.
Further whilst not all products cross over from Countdown to their competitors New World
and Pak n Save, Countdowns sheer size means that they should be able to drive down the
cost of sales more efficiently than that of their competition.
Customer Experience
The following section discusses Countdown from a customer experience in relation to their
on-line shopping experiences. In undertaking this report I have interviewed three
customers, one female two males. The length of time using on-line shopping varies across
all three interviewees as does their shopping behaviour which I hope will provide both a
richness and depth to the analysis.
Each interviewee does not know each other nor were able to discuss their perceptions
together prior to my interview. All three however, have discussed their experience of
shopping on line to be rewarding and as they would expect. None of the interviewee’s were
concerned about the logistics need by Countdown to fulfil their purchases, nor had they
given comment and thought to the fact there is a significant amount of other users invested
in the site. This signals to me that their experience is all based on an egocentric view much
like it would be if they were at the bricks and mortar store all alone i.e. no other shoppers
present and possibly representative of all on-line shoppers.
Parts of the on-line experience varied between each person yet other parts showed a
distinctive pattern. Through these interviews I have been able to relate the consumer
behaviour, views, opinions and patterns back to the prescribed readings presented to our
class. I believe that should I have carried out a much more in-depth sample of Countdown
shoppers I would be able to replicate the studies that have been conducted prior.
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Countdowns Promised Experience
Countdown first offered on-line shopping to customers in 1995 (Countdown, 2012) as the
Woolworths brand. At the time most of the users were that of a commercial nature
shopping for the office staff amenities (like myself) and shopping for the home was still
done predominately in person. To put this in perspective, in 1985 EFTPOS was first
introduced as a pilot scheme in New Zealand, 1999 the first private on-line banking was
introduced by the BNZ (Bank of New Zealand, n.d.), so four years prior to internet banking,
Woolworths was operating an on-line service. Given that I used this service a lot at the
time, I personally know that there has been little change in the structure and presentation
of the site that we see today. Meaning Countdown was technically aggressive and leading
the pack with their strategy which has contributed to their success today.
Peapod which is one of America’s biggest on-line grocery store which started small in
Chicago in 1990 with customers placing grocery orders and two brothers driving around in
their own cars to fill them from local supermarkets whom they aligned themselves with. It
wasn’t until 1998, three years after Countdown, they founded www.peapod.com in which
customers could shop much like they do with Countdown today (Peapod, 2006).
The following depicts graphically the customer experience:
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After much investigation of Countdown’s and Progressive separate Websites and
Progressives Annual Report, I am un-able to find a single mission statement or even a
customer promise made and communicated by Countdown or Progressive. However, there
are a number of claims made along the lines of “we are focused on quality”, “we support
local growers and farmers”, “we have a long term commitment to New Zealand” etc
(Progressive Enterprises Limited, 2012, p. Home Page), but no clear promise. This is an
interesting strategy as the majority of companies will have a single mission statement that
they focus on delivering, yet Countdown has many.
However, Countdown has been voted New Zealand’s most trusted supermarket for two
years running via Readers Digest (Countdown, 2012). Trust for Countdown is built via the
brands that it sells which we will see from the experience that my three customers have had
with their on-line shopping facility (Alba et al., 1997; Danaher, Wilson, & Davis, 2003; Davis,
Buchanan-Oliver, & Brodie, 1999).
Countdown Antecedents
With the explosion of the world wide web (WWW) information can be presented to the
human brain at a far greater volume than it can be manually (Berners-Lee, 1997) allowing
for a development of mass unrealised potential for retailers.
In harnessing the ability to be able to create greater economic value, retailers such as
Countdown needed to define their presence outside of the ‘marketplace’ into a
‘marketspace’ environment (Rayport & Sviokla, 1994). The use of on-line grocery shopped
needed to be able to create a new way of showing the content of their stores, the context of
how the transactions were to take place and the infrastructure that would make this
possible (Rayport & Sviokla, 1994). Whilst I do not know if the developers of Countdown’s
first on-line shopping site in 1995, then under the name of Woolworths, utilised research
such as the Technology Acceptance Model (TAM), they certainly followed the TAM dual
philosophy of “perceived use-fullness and perceived ease of use” (Davis & Wong, 2007, p.
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102). These two concepts have been consistent with the three interviewees who stated a
number of times that shopping on-line via Countdown was convenient and simple.
Further, studies have shown that one advantage of on-line shopping (or Interactive Home
Shopping) is expediential growth in sales with the added benefit of being able to reduce
staffing costs of wages, sickness etc (Alba et al., 1997). Countdown has been market leaders
in New Zealand with their “prototypical convenience-good store” (Alba et al., 1997, p. 39)
and creation of an on-line real virtuality via the use of visual displays creating a mental
symbolism of the real product (Castells, 2000). Countdown establishes this visually by the
use of small picture which display the product that the consumer is trying to purchase.
Another significant advantage for Countdown is that manufacturers/producers cannot easily
replicate this real virtuality and therefore are not competing with Countdown to do so (Alba
et al., 1997).
Countdown Consequences
One of the largest considerations for any New Zealand company to engage in on-line
shopping is cost. Whilst cast can be a benefit (Alba et al., 1997) it is also noted that in New
Zealand with a limited market, cost can also be barrier. The volume of sales produced by
on-shopping of groceries, which will not serve an overseas market, is self-limiting. At the
time the first website was designed and implemented (Woolworths) the cost to the
company would have been significant to their bottom line.
In providing Countdown with a mechanism to communicate to a mass of consumers also
provides the consequences of consumers wanting to communicate back (Potter, 2011). If
the company simply does not have the ability to provide the customer service then the
interactive web-site will fail to even launch. Consumers feel empowered with a sense of
control when they are able to communicate directly with the company should they choose.
However communication of this nature could result in a number of additional staff to
adequately support to a positive result. Whereas in a store, very little communication is
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done directly with staff, even at check-out. This can be viewed as both positive and
negative to Countdown.
Further it is noted that New Zealand still faces slow broadband issues and Countdown must
consider users who are even still on dial-up. This will make the customer experience and
flow as discussed later in this report very difficult.
Customer Behaviour
In the following sections I will link literature about on-line shopping to the actions of the
three interviewees I’ve met and documented (see Appendix C to E). Their behaviour,
experiences and preferences play an important role in the way the Countdown aims to
capture their business. By understanding this behaviour on-line interactive businesses can
develop and grow their revenue and customer loyalty from this knowledge for it is this
knowledge that seeks to gain an understanding into the psyche of the on-line consumer and
how best to capture their interest.
Type of Shopper
All Interviewees are within the age bracket of late thirties to mid-forties (Danaher et al.,
2003).
Demographics Customer A
Interviewee One (Customer A) would be described as a father of one child of two years of
age and a partner who is not working. He has a well-paid stressful position that often
requires him to work more than forty hours a week (usually around forty five on average).
He is half Deli/Maori and educated and would represent the middle class bracket. See
appendix C for notes on his interview.
Demographics of Customer B
Interviewee Two (Customer B) is described as a European working mother of four male
children who has been married to the same partner for a significant period of time. Her
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children range from teens to early twenties and all still reside at home. The family runs and
owns a business together and has done for a number of years. I would consider Customer B
to be middle to upper class bracket that is very well educated.
Demographics of Customer C
Interviewee Three (Customer C) is middle class and of Samoan background. He is well
educated and lives with his de-facto partner with no dependants. He holds a very well paid
IT position and is extremely computer and network savvy and it would be fair to say that
Customer C understands of the internet and the background mechanism extensively.
Preferences
Customer A is mostly a Goal-Oriented online shopper personality but also displays
Experimental-Oriented tendencies as well (Novak, Hoffman, & Duhachek, 2003). He uses
the internet to achieve both specific tasks of purchasing items that he sees as being more
cost effective or time effective and also spends time perusing new products of interest to
him. From studies regarding the two on-line personality types, it is also know that as
customer can be both Goal-Oriented and Experience Oriented and this can vary depending
on the function they are carrying out (Hoffman & Novak, 1996). Customer A I believe fits
into this description and is evident in his portrayal of a ‘low sense of flow’ (Hoffman &
Novak, 1996).
Customer B is a firm Goal-Oriented shopper personality, as per Table 1 of the article ‘The
influence of goal-directed and experiential activities on online flow experiences’ (Novak et
al., 2003, p. 4). To her grocery shopping is simply a chore that needs to be completed and
Customer A could also be likened to the gender bias that occurs amongst families for the
routine functions that is considered sharing (Belk, 2010) given that she is the only female in
the household. Customer C does not spend time perusing the internet out of interest but
will use it as a tool to ‘get things done’ and move onto the next task.
Customer C is an Exploratory-Oriented shopper personality with high Optimal Stimulation
Level and Flow (Hoffman & Novak, 1996). I’ve reached this conclusion about Customer C
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due to the fact that I have known him for some time and have observed that he is internally
driven and self-sufficient as described by Hoffman and Novak’s article. One example is that
when Customer C takes a work call, he is so focused on that he is unable to acknowledge the
outside world. Customer C will explore the internet at length in his spare time and often not
go to bed until the small hours because he has been caught up in what he has found.
Branding - Countdown vs. Products
The use of branding on-line plays an important role for engaging in consumers as “through
brand-related communications, the brand acts as a mechanism to engage both buyer and
seller in a long-term trusting relationship” (Davis et al., 1999, p. 179). We understand that
the shopper who purchases via the web, no longer has the ability to physically touch the
product “…an important cue for inferring quality online is the product brand” (Danaher et
al., 2003, p. 462). Further, an added difficultly Countdown has is in a physical store brands
that are more popular and carry greater sales are place strategically in the more dominant
position, on-line it is more difficult to do this especially given that there is a significant
amount of brands that do this. Countdown displays its brand visually for customers to see
when shopping on-line.
Nested among the above the established well-known brands, Countdown have introduced a
number of their own products. Initially, these were existing products that were re-branded
to provide a cheaper non-branded range, however Countdown’s brands have moved into
ranges that have been designed to meet different target markets (Progressive Enterprises
Limited, 2012). I believe however, consumers still identify with these products as being the
‘B’ grade product; consequently the signature range which is designed with the ingredient
conscious (i.e. good ingredient and fewer additives) shopper in mind is under-utilised.
Hoffman and Novak and many others had written much about the state of flow whilst
shopping on-line (Hoffman & Novak, 2009). There are many contributing factors to flow,
one of which is the ability to trust (Davis et al., 1999); in establishing their on-line website
Countdown (then Woolworths) aligned themselves with “the banking industry to ensure
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they met market demands for doing business over the Internet” (Progressive Enterprises
Limited, 2012, pp. Our Company - 1995). The ability for customers to pay online and know
that it is safe has resounded strongly in literature and I also a point that all three
interviewee’s have discussed and this trust links deeply to the brand of Countdown.
Further research has indicated that if there is no loyalty built by Countdown to its branding
“…then there will be no selling opportunities related to the content” (Rayport & Sviokla,
1994, p. 147), therefore the Countdown and their products must build a collaboration via
their suppliers. Interestingly on that very point Countdown will want to naturally build a
great market share for their own brands such as Select, Homebrand, Signature etc, yet they
risk damaging relationships with big players in the food industry such as Goodman Fielder. I
suspect that is the reason why to date the development of the Countdown range has been
minor.
Countdown per their website has noted the following as being their brands:
• Homebrand
• Countdown Fresh
• Macro Wholefoods Market
• Select
• Essentials
• Christmas Club Vouchers
• WISH Gift Card
• Hampsta
• Fresh Flowers
• New Zealand's most trusted supermarket
• FREE Royal Worcester Glassware
(Countdown, 2012, p. Our brands)
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Real Virtual Experience
In understanding what drives a person to shop on-line we must connect to the virtual
experience that they have had and from there build an understanding on what creates a
good experience and what creates a negative experience (Castells, 2000). The on-line
shopper must have a relationship with the product or service that they are interacting with
and the end outcome must be positive to strengthen the experience they have and build
loyalty (Hoffman & Novak, 1996). The real virtual experience is an area that has been
discussed in detail by the aforementioned experts Donna Hoffman and Thomas Novak who
have found that consumers who are so absorbed in the experience that they are no longer
aware of their surrounding; this state of mind has been term ‘flow’ (Hoffman & Novak,
2009). All of the Customers that I spoke with described to me a state of mind that was
representative of this flow state and it appears that the expectation was that they would
achieve this due to Countdowns ability to capture them. In other words if Countdown did
not have the balance between information, symbolism and ease of use, then all of the
customers I spoke with would have been very disappointed.
As discussed prior items are not physical via the internet (symbolism), so our brains build
upon a prior physical experience that it then draws upon when exposed to the symbolic
form. Davis et al provides an example of this in the scenario where a consumer is
purchasing a tomato; “…can no longer press and prod the tomato as a subjective
assessment of quality. Therefore, they rely on the information-rich, IT service-generated,
cognitive experience of the tomato” (Davis et al., 1999, p. 321). The cognitive experience
can be communicated via a number of different media forms and Countdown uses pictures
to stimulate the senses into recalling the smell, taste and physical form. All of the
Customers that I interviewed stated that they felt the size of the pictures used to display
products were perfect.
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(Progressive Enterprises Limited, 2012, p. Home Page)
Another aspect of creating the virtual experience of flow is the skill of the user to possess
the technical ability to be able to use on-line shopping. As all of the interviewees met fall
into the typical demographics of on-line shoppers (Danaher et al., 2003) as they are also in
the age bracket where technology is not completely foreign, but not also innate as it is with
a younger generation (Berners-Lee, 1997). As a consequence Countdown must be able to
make its on-line experience as users friendly as possible for the Goal Directed shopper but
still have additional features and complexity afforded for the Exploratory Directed shopper.
This consideration has been cited at the Technology Acceptance Model (TAM) (Davis &
Wong, 2007) indicating that the ease Countdowns shoppers have with the website will
influence their perception of the experience. However, should Countdown make this
experience too easy the shopper will get someone else to complete the task for them; in my
interviewee’s this is Customer C who has high technical ability and therefore is difficult to
challenge in a positive way.
Leading on from the above, the aspect of how much information to put on-line needs to be
balanced as well. Too much information will stifle and bore the participant and too little will
not inform and build trust (Hoffman & Novak, 1996). This can also be said for the amount of
advertisements placed on and within a web page. Both Customer A and B considered the
specials pages to be adverts, whereas Customer C did not. However all three Customers
stated that the level of actual advertising within Countdowns site was acceptable.
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Countdown Service
I have discussed in the section prior regarding Countdown as a brand however, Countdown
must also service its customers for any issues on technical, quality etc and whilst it not a
huge part of Countdowns presence it still must be considered.
Should Countdown not meet the service expectations of its customers it will lose the trust
that they place in Countdown as a brand. All of the Customers that I interviewed had
experience with Countdowns service in various ways and they all spoke highly of the level
and the prompt response. This suggests that Countdown places service high amongst its
corporate image and not just the brands that it sells.
Theoretical Implications
One of the major theoretical implications is that this report does not encompass a
significant sample size when interviewing users of Countdown. However, it is noted that the
interviewees were not done with the intention that their outcome was to be considered
research. The Customers I have interviewed has been merely anecdotal and are used to
provide examples of how existing research in such area has been applied and patterns of
behaviours have appeared. The interviews were conducted with no preconceived plan in
mind and were of a grounded theory nature where each person was asked as much
information as possible about their experiences. In saying this, however, I personally
believe that should the sample size be increased significantly to replicate that carried out
prior they results remain unchanged.
Another interesting concept that has arisen from this study is the fact that shoppers who
are using the on-line service of Countdown are customers that are familiar with major
brands in New Zealand. It may show a very different result if the research was repeated
seeking to see if non-new Zealanders were a) willing to use the on-line shopping service and
b) had trouble doing so due to lack of brand understanding (Dickson, 2000). Such comments
were also made by my interviewee’s.
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Lastly, Countdown is at present the only supermarket to be offering on-line shopping,
however, given that the barriers to entry for another supermarket to compete with this are
average, it will only be time before Pak n Save or New World takes up the offer. After an
exhaustive search I am unable to local any planned developments for the Countdown
website, perhaps this is for strategic reasons? However, Countdown will need to be
prepared to defend their position in the market when this happens and as part of this
defence more research could be done into New Zealander whom has food allergies,
intolerances or special dietary requirements. Presently only very small predominately
organic shops cater for this, yet I suspect the necessity for a much larger portion of the
population that is understood has this need, actual facts should be established on this via
the District Health Boards.
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Managerial Implications
Countdown currently offers the most amount of customer rewards of any supermarket with
the one-card discounts, fuel discounts and cash of grocery vouchers, all of the people
interviewed liked and made use of the rewards available. This provides an excellent way for
Countdown to manage and track the purchasing of household and of their loyal customer
and allows for mass communication and market to different groups (Potter, 2011). One of
the services that Countdown is currently lacking both in store and especially on-line, is the
ability for consumers to search for products via an ingredient category for instance, gluten-
free, dairy-free, sugar-free etc. Further a bigger breakdown of ingredients could also be
added to the currently existing web-site which is a comment made by my interviewees.
“Niche brands have higher loyalty” (Danaher et al., 2003, p. 474), yet well-known brand also
build the biggest trust. Countdown has built a strong alliance with its suppliers who
recognise it simply isn’t feasible for them to sell direct to the market, however, as mention
prior with the introduction of Countdowns (and formerly Foodtown and Woolworth) own
brands, they will need to manage these alliance carefully. Larger manufacturers in the food
industry have a reliance on countdown to sell their product, but conversely Countdown has
reliance that they are able to sell the big brands. Not one of my interviewee’s really singled
out a brand, it appears that they all had their own personal preference and assumed that
this was the case for everyone.
The ability to up-sell now via on-line shopping is becoming increasingly more difficult,
consumers who grocery-shop on-line are mainly Goal Orientated in their pursuits, if not they
simple pass the task to someone else in the household. All of the Customers I interview said
that they ignored the advertisements that Countdown had one even noted that at the end
of the shop that the list that appears for suggested items missed always contains items they
simply have never purchased. I personally believe consumers are becoming more aware of
marketing tactics and are becoming more an affected by them.
24
Summary
Countdown is a large and successful off-shore owned company with a large support network
behind their bricks and mortar stores and on-line presence.
In rating the overall experience that Countdowns customers encounter when shopping on-
line appears to be a very positive one, considering that Countdown was world leaders in
developing the use of an Interactive Home Shopping tool, even beating big brothers like
Peapod by three years.
Countdown presents itself with the perfect balance of flow with the use of on-line graphics
aimed at both the Goal-Orientated and Experimental Orientate shopper without over or
under informing. The technology in the back-end of the interface is reliable and works well
for the users with their ability to save favourite shopping lists for future use.
All three of the customer that have been interviewed for their individual experience have all
rated their experience highly of Countdown, whilst it is noted that there currently is no
competition, it is also noted that each Customer has state that the experience is exactly
what they expected it should be.
There are a few points raised about future areas of research and understanding on
Countdowns part and some further suggested areas for managerial considerations, like the
non-New Zealand shopper. How Countdown will counter any aggressive competitive
attacks will be interesting in future as they have strategically done very well to date.
Consideration as well into other areas that shoppers may want to focus, on like dietary
restrictions etc could also be worth Countdowns investigation.
In summary however, Countdown has provided an excellent example of Interactive On-line
Shopping for the New Zealand market and I have been impressed at how little it has needed
to change its original model first used back in 1995.
25
Appendix A
Literature Review Table:
No Author(s): Year: Title: Notes: Journal:
1 Alba, J., Lynch, J.,
Weitz, B., Janiszewski,
C., Lutz, R., Sawyer, A.,
& Wood, S.
(1997) Interactive home
shopping; Consumer,
retailer, and manufacturer
incentives to participate in
electronic marketplace
Screen alternatives via Interactive home shopping, costs of on-
line vs. off-line, prior knowledge of bands, trust. p85
Journal of Marketing, 61(July), 38-
53
2 Belk, R. (2010) Sharing Discusses the psychology behind sharing especially within a
family situation and how gender and status influence. p101
Journal of Consumer Research,
36(February), 715-734
3 Berners-Lee, T. (1997) World-wide computer Discuss the world wide web and the ablility of technology to
keep up. p24
Communications of the ACM,
40(2), 57-58
4 Castells, M. (2000) Materials for an
exploratory theory of the
network society
Introduces Real Virtuality, sharing and what facilitates
relationships and how the internet opens up these avenues. pg.
4
British Journal of Sociology, 51(1),
5-24
5 Countdown. (2012) Countdown shop smarter On-line site
http://www.countdown.co.nz/
6 Danaher, P. J., Wilson,
I. W., & Davis, R. A.
(2003) A comparison of online
and offline consumer
brand loyalty
Discusses how on-line shopping creates a brand loyalty greater
than bricks and mortar. p199
Marketing Science, 22(4), 461-476
7 Davis, R., Buchanan-
Oliver, M., & Brodie, R.
(1999) Relationship marketing in
electronic commerce
environments
Seeks to investigate what is the best type of media to use to
build customer relationship and trust. p224
Journal of Information Technology,
14, 319-331
8 Davis, R., Buchanan-
Oliver, M., & Brodie, R.
J.
(2000) Retail service branding in
electronic - Commerce
environments
A products ability to satisfy the consumer at a subconsious level
especially in relation to on-line grocery shopping. p219
Journal of Service Research, 3(2),
178-186
26
9 Davis, R., & Wong, D. (2007) Conceptualizing and
measuring the optimal
experience of the
elearning environment
Seeks to investigate and understand eLearning behaviour of
students. Incorporates the understanding of flow and technology
acceptance. p143
Decision Sciences Journal of
Innovative Education, 5(1), 97-126
10 Dickson, P. R. (2000) Understanding the trade
winds: The global
evolution of production,
consumption, and the
internet
How the WWW is can influence the consumer and consumer
behaviour. This article notes the way in which some brand could
dominate consumer use. p76
Journal of Consumer Research,
27(June), 115-122
11 Hoffman, D. L., &
Novak, T. P.
(1996) Marketing in hypermedia
computer-mediated
environments: Conceptual
foundations
How the internet communicates with consumers, the types of
mediums used to send information and how information is fed
back to the company. Also discusses flow and antecedent and
consequences of the on-line experience. Consumer behaviour
optimal stimulation level, autotelic personality. p124
Journal of Marketing, 60(July), 50-
68
12 Hoffman, D. L., &
Novak, T. P.
(2009) Flow online: Lessons and
future prospects
Expands on the theory of flow and the different states of the
flow that exist. p173
Journal of Interactive Marketing,
23, 23-34
13 Ministry of Business,
Innovation and
Employment.
(n.d.) The Companies Office Companies office database of Directors and Shareholders http://www.business.govt.nz/comp
anies
14 Novak, T. P., Hoffman,
D. L., & Duhachek, A.
(2003) The influence of goal-
directed and experiential
activities on online flow
experiences
Consumber behaviour being goal directed. p185 Journal of Consumer Psychology,
13(1&2), 3-16
15 Polson, E. (2011) Belonging to the network
society: Social media and
the production of a new
global middle class
Discusses the impact the WWW has on the middle class globally
and the formation of on-line groups. p46
Communication, Culture &
Critique, 4(2011), 144-163
16 Potter, W. J. (2011) Conceptualizing mass
media effect
Nature of mass media, motivations behind and type of methods.
p26
Journal of Communication, 61, 896-
915
17 Progressive Enterprises
Limited.
(2012) Countdown Owners/managers of Countdown. Their official website
http://www.progressive.co.nz/our-
stores/countdown/
18 Rayport, J. F., &
Sviokla, J. J.
(1994) Marketing in the
marketspace
How value is created through on-line shopping and the
fundamental shifts in consumer behaviour surround loyaties,
value for money etc. p66
Harvard Business Review,
November-December, 141-150
27
Appendix B
Presentation
28
29
30
31
32
33
Appendix C
Notes from Interview One (Customer A)
Customer A saw an advertisement on TV and for convenience decided to use Countdown
Website. The situation is that Customer A has an elderly mother who has advanced
Alzheimer’s and is not capable of being able to shop for herself and therefore Customer A
must shop each week for her to top her up on supplies outside of the meals on wheels his
mother is provided. Customer A has only used Countdown a few times and indicated that
he does not intend to use it again.
Initial impression of countdown lived up to what he expected of his online experience, in-
other-words when he went on line it was virtually exactly what he expect it would be.
However, what did change in his experience is that Countdown variety of products meant
that it took him longer than expected to be able to fulfil his desired requirement. He did
note that should he have used the function that mean he could save his list then this would
have been extremely beneficial to him future.
Customer service exceeded his expectation with a follow-up phone call thanking him for his
custom and a request for him to undertake in a customer satisfaction survey - which he did
not. He found that this follow up was just right in terms of not being too ‘in his face or
intrusive or pushy’ but enough to feel that he had received great service.
Interestingly Customer A is colour bling to primary colours and I wanted to explore how
much a 2D Real Virtual Experience was affected by this condition opposed to in-store
experience. He noted that there was minimal effect for him what-so-ever. He found the
same difficulty on-line shopping for items such as apples where the colour was different
shades of red for instance, as he did on-line. Not being able to physically see the apples
made it difficult for him to know what ones to purchase as he could not recollect the
difference between each type and the as far as he could recall the descriptions did not offer
much assistance to him in this respect. However, he did comment that he found he needed
34
to possess substantial prior product knowledge for his to be able to use on-line shopping.
Customer A felt that should someone be new to New Zealand or not familiar with Western
food then they would find the on-lone experience extremely difficult; Customer A partner is
Japanese so he aware of this issue.
Customer A’s style of finding products was to search via the ‘tree type of categories and sub
categories’. He did not like the search function that Countdown had as it returned too many
‘hits’ for his preference as he could not remember the exact description of the products to
input on the search function so he did not get a more refined search. Customer A also
noted that his virtual experience he felt was not around Countdown but rather the products
that they sell and they were the focus of his purpose of selection.
Further point worth noted and for further follow-up by myself to confirm is that Customer A
believed that not all products were available via on-line shopping which limited his ability
for full product selection. Further he did not like the idea of someone else being able to pick
his fruit and veg’s for his as this is something he and his partner preferred to do themselves.
The benefits Customer A saw in used on-line shopping is the convenience of being able to
simply order and not worry about getting to and from a physical supermarket, this he found
would be useful to elderly, physically challenged and those who have to take public
transport or taxi’s (like his partner used to).
The cons of on-line shopping for Customer A is that he felt that Countdown was too expense
compared to Pak N Save and with the added delivery fee it simply was not feasible. Given
that the shopping he purchased was minimal it did not warrant further use as the time
taken to search and place orders were too lengthy in his opinion.
Lastly, Customer A felt that there really was nothing that Countdown could do to entice him
at this point to shop on-line again as he felt that price played a major role and secondly he
simply referred the in-store experience. He conversed that on-line shopping could perhaps
be more suited for a younger generation as opposed to his generation.
35
Appendix D
Notes from Interview Two (Customer B)
Customer B has conducted on-line food shopping since it was formally owned by
Woolworths. She was reticent in the change from Woolworths to Countdown and to log-on
she still went via the Woolworths site until Countdown changed the log-on to be similar to
that of Woolworths. Customer B does not like her environment changing and is almost
resentful when it does, hence her reluctance to log-on directly to Countdown. This
reluctance when quizzed was born out of her fear of the; quality, delivery times, new thing
to try and on-line security around payment.
Customer B pattern of shopping has changed over the years from obtaining fresh fruit,
vegetables and meat from independent suppliers like Mad Butcher, Green Bay Grocer etc
and only dry good from Countdown until she felt comfortable that the pickers of the fresh
produce was ‘excellent’. She was also conscience that that prices at the Mad Butcher for
instance were better on occasion than that of Woolworths/Countdown, however, now she
find that there is little difference in pricing. With regard to veges she still purchased a
number of item at the vege shop as it was cheaper and the household was consuming great
quantities, however, her son is no longer professionally competing and the convenience
means that she does not do a separate shop.
Customer B finds the website of Countdown to be visually easy and the picture size etc to be
perfect for her virtual experience. She uses two lists and then adds to it additional items
such as toiletries and other seldom purchased items. However she has noted that again you
need to know your products because other than a list of ingredients there is not much more
of a breakdown (e.g. Calories etc).
Before on-line shopping Customer B was shopping every day and it was not an experience
that she enjoyed. She found this to be time consuming and viewed it as tedious chore, to be
able to shop on-line has freed up for time considerably and interestingly she only shops
36
once a week (on-line). Now on the times that she does visit the supermarket she see it as a
social event and noted that the level of ‘socialness’ can depend of the different areas that
the supermarket is in e.g. College Hill, is very busy and industrious, whereas Richmond Road
Woolworths is very social and laid back. Customer B loves the idea that she can be in a
different country and order her groceries to be there when she gets back home. Customer B
does travel a fair bit.
Customer B does not like the specials/adds on Countdown to flash at her as it reminds her
of the ‘you have won xxx prize’ but does like that whatever specials are available, they flow
through to her shopping basket where applicable along with her one-card. Customer B does
not look at the specials page and is not interested in doing so. Further one of the key
attractiveness of shopping on-line is that she is not tempted to ‘impulse buy’ that she often
does when in the actual store. Customer B noted that when she finishes her shop the
programme will flash up about 6 items telling has she forgotten to buy… she also notes that
usually 3 of the items are ones that she has never purchased and views it as a way of
enticing her to try something new.
When Customer B wants a new product (like pita bread) she will visit the actual store to see
the range and then test it and if she likes purchase it on-line. She searches for her new
items also through the search function and strongly dislikes the ‘isle way’ of browsing for
products. [This and other comments have led me to make the observation that Customer B is
a Goal-Orientated shopper].
Customer B finds the customer service to be excellent, but to start off with she disliked the
phone calls asking if she minded product substitution of one kind with another and was
simply not fussed if they swapped items. Now Countdown rarely call her and often ‘up-size’
the product if they are not carrying stock. This she find exceptional and non-intrusive.
Customer B rarely relates to the idea that she on Countdowns website when she shops; she
is mostly focused on the products and not the store that brings it to her.
37
Appendix E
Notes from Interview Three (Customer C)
Customer C and his partner have been shopping online now for two months, he decided
that he no longer wishes to visit a supermarket as he does not like queues at all, packing his
car of going to and from the supermarket. Their shop is done once every two weeks on-line
and if he faced with having to go the supermarket then he will go to the 12 items or less isle
always.
Customer C particularly like online shopping because; be done in the privacy of indoors, can
be done in your own time and can be paused, is 24/7 (whereas his store isn’t) and can save
a shopping list reducing time.
Customer C has noted that you need to really know your products/brands prior to shopping
online also thinks that the thumbnails are adequate. Further there are no nutritional details
with products so Customer C has to search elsewhere on the web to find this.
In terms of shopping lists Customer C saves his one very week, so he now has a number of
lists, he likes to shop via the isles and rarely uses the search function. He does like to look at
the sale items and will often change items on his shopping list for those items. Customer C
does not believe that all of the items are held on the on-line medium but the trade-off is
that they are in stock more than the store. He does also allow for product substitution
which he is charge for accordingly (more if required).
His has two physical stores very close to where he and his partner lives, so the drive there is
not considerable. Customer C notes that because he uses the on-line shopping facility he
will shop excessively rather than if he was in the store. Because Customer C is high OSL and
displays experimental behaviour, he delegates the duty of on-line shopping to his partner
then he will change and add to the list.
38
Customer C is not impressed with the quality of the fresh fruit, veg and meat and he
believes that is more down to the personal shopper that is assigned to him. He does
however like the free samples that they receive. Customer C partner insists when shopping
both physical and virtually of purchasing items that are wrapped, i.e. apples in a bag,
mushrooms that are pre-packed and Customer C is uncertain if this could also have an effect
on the quality. When pushed more on this it turns out that he has a received a pre-packaged
cauliflower in the past and it was not up to standard and this has given him the bad
impression to both himself and his partner.
Customer service has been good for Customer C, although he only recalls having dealt with
them once outside of the initial welcome to the service call when he first used the on-line
shopping. Interestingly Customer C believed that this first call was more about confirming
that he was real, his details were correct etc. The only other time he used customer service
he found them to be very good with the follow through dealing with his issue.
Customer C notes that he over shops because he will get more than one thing e.g. two
capsicums at once rather than one (he does not have a meal schedule and only a rough
mental list). Customer C likes the personalisation that you can add to items when you
purchase e.g. like only green banana’s etc.
Does not think of Countdown when he shops and he ignores the ads that appear on the site.
He feels that the site is nicely laid out, better than actual and it would appear that he has a
slightly higher virtual experience than the other customers I have interviewed and I believe
that this is because of the shopper personality type that he is. Customer C has said that he
particularly likes the fact that on-shopping provides him with a running total, but would like
to be able to pay for things individually (like to you do in a store) as he and his partner may
buy things separately and she does not possess a credit card.
However Customer C also notes that he does not receive his fuel discounts when he shops
on-line and feels that this would be of greater benefit if he did. He does like the fact that his
one-card and the resulting credits are automatically loaded through and ready for him to
use on-line without issue.
39
References
Alba, J., Lynch, J., Weitz, B., Janiszewski, C., Lutz, R., Sawyer, A., & Wood, S. (1997). Interactive home
shopping; Consumer, retailer, and manufacturer incentives to participate in electronic
marketplace. Journal of Marketing, 61(July), 38-53.
Bank of New Zealand. (n.d.). History. from http://www.bnz.co.nz/about-us/history
Belk, R. (2010). Sharing. Journal of Consumer Research, 36(February), 715-734.
Berners-Lee, T. (1997). World-wide computer. Communications of the ACM, 40(2), 57-58.
Castells, M. (2000). Materials for an exploratory theory of the network society. British Journal of
Sociology, 51(1), 5-24.
Countdown. (2012). Countdown shop smarter. from http://www.countdown.co.nz/
Danaher, P. J., Wilson, I. W., & Davis, R. A. (2003). A comparison of online and offline consumer
brand loyalty. Marketing Science, 22(4), 461-476.
Davis, R., Buchanan-Oliver, M., & Brodie, R. (1999). Relationship marketing in electronic commerce
environments. Journal of Information Technology, 14, 319-331.
Davis, R., & Wong, D. (2007). Conceptualizing and measuring the optimal experience of the elearning
environment. Decision Sciences Journal of Innovative Education, 5(1), 97-126.
Dickson, P. R. (2000). Understanding the trade winds: The global evolution of production,
consumption, and the internet. Journal of Consumer Research, 27(June), 115-122.
Hoffman, D. L., & Novak, T. P. (1996). Marketing in hypermedia computer-mediated environments:
Conceptual foundations. Journal of Marketing, 60(July), 50-68.
Hoffman, D. L., & Novak, T. P. (2009). Flow online: Lessons and future prospects. Journal of
Interactive Marketing, 23, 23-34.
Ministry of Business, Innovation and Employment,. (n.d.). The Companies Office.
http://www.business.govt.nz/companies
Novak, T. P., Hoffman, D. L., & Duhachek, A. (2003). The influence of goal-directed and experiential
activities on online flow experiences. Journal of Consumer Psychology, 13(1&2), 3-16.
Peapod. (2006). Our company. from http://www.csus.edu/indiv/c/chingr/mis270/peapod.pdf
Potter, W. J. (2011). Conceptualizing mass media effect. Journal of Communication, 61, 896-915.
Progressive Enterprises Limited. (2012). Countdown. from http://www.progressive.co.nz/our-
stores/countdown/
Rayport, J. F., & Sviokla, J. J. (1994). Marketing in the marketspace. Harvard Business Review,
November-December, 141-150.