Giant vs Giant

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Shoppers at Woolworths are more likely to have their mobile phone with Telstra, while those at Coles are more likely to be with Optus—and the correlation reflects how the supermarkets and telcos are positioned in their respective markets, Roy Morgan Research shows.

47% of people who mainly shop at Woolworth are Telstra mobile phone customers, compared with 39% of Coles’ main shoppers. 22% of Coles’ main shoppers are Optus mobile phone customers, compared with 19% of Woolworths’ main shoppers.

Could it be an accident? In both cases, the difference is statistically significant—showing a real link between our choice of supermarket and choice of mobile service provider.

% of supermarkets’ main shoppers with mobile service provider
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Source: Roy Morgan Single Source, April 2015 – March 2016, sample n = 12,318 Grocery Buyers 14

So if the Woolworths-Telstra and Coles-Optus connections aren’t arbitrary, the question is: what connects our choice of main supermarket with our choice of mobile service provider?

The answer lies in the most basic tenet of market positioning: Quality versus Price. The two supermarket giants have distinguished themselves as the ‘fresh food people’ and the home of ‘down-down’ prices respectively.

As the chart below shows, Woolworths is more commonly associated with Quality and Coles with Price—just as Telstra and Optus are.

64% of grocery buyers who mainly shop at Woolworths say the one thing their supermarket is best known for relates to Quality*, compared with 44% of Coles’ main shoppers. Conversely, 35% of grocery buyers who mainly shop at Coles say the store’s defining attribute relates toPrice*, compared with just 18% of Woolworths’ regular customers.

When it comes to mobile provider, 71% of Telstra’s customers say an issue pertaining to Quality was among the reasons they chose the provider, compared with just 28% of Optus’s. And just as with supermarkets, the situation reverses when it comes to Price: mobile owners with Optus are over twice as likely as those with Telstra to cite Price as a deciding factor, 61% vs 29%.

% who cite Quality or Price for Supermarkets and Telcos

6920bCustom

Source: Roy Morgan Single Source, April 2015 – March 2016, sample n = 12,318 Grocery Buyers 14 and 13,464 Main Mobile Owners 14

* The individual factors constituting Quality and Price are: for supermarkets, Quality is ‘wide range of goods or products’ or ‘fresh food quality freshness’, and Price is ‘low prices’ or ‘good value’; for mobile phone service providers, Quality is ‘better network coverage’, ‘better connection or reliability’ and/or ‘faster data or download speed’, and Price is ‘cheaper rates’, ‘more calls or texts included in the plan’, ‘clear pricing of the plan’, and/or ‘free or discounted phone’.

Michele Levine – CEO, Roy Morgan Research, says:

“Recent news suggests Woolworths may be planning a greater push into telecommunications. Each supermarket is already offering mobile phone plans as a Mobile Virtual Network Operator (MVNO)—and the network owner it has signed on with is the best fit. Woolworths’ mobile services use the Telstra network, while Coles’ agreement is with Optus.

“As we’ve previously reported, mobile owners signed up with an MVNO tend to be seeking cheaper rates—but ALDIMobile customers are more likely to cite network coverage as a reason they picked the provider, reflecting the high score for its network operator, Telstra. This suggests that even MVNO customers often know full well which network they’ll be on, and it plays a part, after price, in determining which one they choose.

“While network operators all need to weigh up the revenue from selling on expensive networks to virtual providers, while the MVNOs themselves need to consider how they can distinguish themselves in a crowded market and target customers based on whose network they use. This is clearly important for the supermarket MVNOs in particular, with customers who already align closely with their respective network provider.”

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