Riding on the heels of 2020’s retail industry disruption, conglomerate Woolworths Group will invest over $50m to retrain 30 per cent of its workforce in technical and organisational skills designed to help the company solidify its position in the new digital normal.

Over the next three years, the company announced, its new Future of Work Fund will see more than 60,000 Woolworths employees trained extensively in areas such as automation, predictive analytics, artificial intelligence and cloud computing – which are, Woolworths Group CEO Brad Banducci said, “making core retail processes much faster and more efficient than ever before.… [and] changing the nature of the day to day work many of our people do.”

The training courses, which will be delivered through a range of yet-to-be-finalised partnerships with learning institutions, will take “an integrated and holistic approach” to nurture next-generation retail capabilities that will be shared across retail and other service industries.

Training will also focus on people-focused skills such as customer service, team leadership, and agile ways of working – helping the company pivot amidst retail industry change that Banducci called “the fastest pace we’ve seen in many decades”.

It’s not Woolworths’ first such investment: in November, for example, the company debuted its Dairy Innovation Fund – offering $5m in grants over three years to help around 60 dairy farms invest in new technologies to support “on-farm efficiency, sustainability and resilience”.

Similarly, the company’s investment in digital technologies will help its core retail businesses – including its supermarkets, loyalty, financial services, hotel, and liquor brands – continue building data-driven businesses in which the e-commerce arm is a primary fulfilment method.

Supporting e-commerce’s new normal

Focusing on digital skills highlights just how quickly Woolworths Group, like its competitors, has doubled down on e-commerce operations that grew stratospherically during the pandemic and associated lockdowns.

Its online sales increased by 100 per cent year-on-year during the September quarter and now, it says, account for 8 per cent of all grocery sales.

Despite long-held fears that automation could make large numbers of jobs obsolete, pandemic-era e-commerce expansion has driven a surge in roles – with the company pointing out that it employs more staff now than when it introduced self-service checkouts, another disruptive automation technology, in 2008.

The company’s 200,000-strong workforce now includes over 25,000 personal shoppers – 1 in every 8 workers – to traverse its over 3,000 stores and distribution centres picking orders for online customers.

In October, the company opened a purpose-built ‘micro-automation’ site at a new ‘eStore’ in Carrum Downs, Victoria, that leverages automatic picking and 170 new staff members to fulfil online orders five times as quickly as a conventional store.

In December, the company also opened a multi-million dollar online Customer Fulfilment Centre in Lidcombe, NSW – employing over 900 people across a 1.5 hectare site that added more than 20,000 extra product-delivery windows per week.

“Where [staff] work and what they do will change,” Banducci said, flagging “a much stronger emphasis on service and personal interactions with customers”.

Building the future supply chain

Woolworths has also invested heavily in new distribution centres to support this changing business, and plans to capitalise on its infrastructure – for example, to begin distributing goods for partner organisations through the same network – in ways that will lean heavily on the company’s internal digital, analytics, supply chain and related skills.

The company calls its “next-generation supply chain” a ‘Food and Everyday Needs Ecosystem’ and, in October, rebranded its internal supply-chain organisation as Primary Connect to help it establish its own market identity.

Primary Connect will leverage supply-chain facilities including the $135m Melbourne Fresh Distribution Centre that Woolworths Group opened in November; its $12m Townsville Distribution Centre expansion to bolster movement of goods in North Queensland; and the 26 distribution centres it purchased through its $302m investment in PFD Food Services.

That growth – and Woolworths Group’s decision to reshape its workforce and supply chain accordingly – reflect major industry change that, one McKinsey & Co analysis noted, would drive major structural change that is, unlike COVID-19 restrictions and business-cycle effects, “expected to be permanent”.

“Policy,” the analysis argued, “can help industry and the workforce adjust to these changes by supporting the growth of new firms and reskilling workers who have been displaced by the changes.”