Woolworths targets $1.3 billion sales online

Grant O'Brien, CEO designate for Woolworths Limited. Photo / Dean Purcell

Australian retail giant Woolworths is aiming to chalk up A$1 billion ($1.3 billion) in online sales within two years as it works to ensure all of its businesses are trading on the web by the end of 2015.

Ahead of the release of the company's first half results this week, chief executive Grant O'Brien unveiled a grand vision for the company's digital operations spanning to 2020.

"Giving customers multiple options isn't a threat, it's a huge opportunity, probably the biggest opportunity in retail for many years," O'Brien said.

"If you can't recognise that, then you need to question your future in retail," he said.

"Retailers need to stop complaining and start innovating and that includes us."

He said Australia had been slow off the mark to embrace online retailing, but it was catching up fast.

But he said the idea of charging GST on imported goods under A$1000 was now irrelevant given the low cost of bringing them into the country.

"The last thing Australians need are retailers calling for more taxes," he said.

With more than 1.5 million mobile apps downloaded, Woolworths claims it is the largest online retailer in Australia and New Zealand.

Online retailing, or multi-optional retailing as O'Brien called it, was one of the company's key strategic priorities.

Woolworths was aggressively pursuing innovation and working towards making "the entire business multi-optional by 2015".

"We've got a target of cracking a billion dollars in online sales by the end of 2014 and we're well on the way," he said.

However, he admitted one of the biggest difficulties of meeting the demands of online customers was improving the supply chain.

He also revealed that Woolworths was fulfilling its grocery orders from its supermarkets rather than warehouses.

The group, which also owns discount department stores and hardware stores, would move towards using small vans to deliver products.

"With a business like ours we've got to build a new supply chain that allows the flexibility to do both," he said.

Woolworths recently started a daily deals site and flagged the imminent launch of its Masters home improvement online store.

"In 2020 I believe 100 per cent of our turnover at Woolworths will emanate from the multi-option channel, with customers having access to at least one online touch point before making their final transaction," he said.

The company recently secured the 18th position in a list of the Deloitte largest 250 global retailers by revenue in 2010.

- AAP