At a time when the COVID-19 pandemic is wreaking havoc across the world, Wesfarmers has shown resilience and vowed to continue digital investments.
Australia’s third-largest employer continues to see growth in its retail businesses Bunnings, Officeworks, and Kmart. Stay at home restrictions and ‘work from home’ generate new growth.
Addressing the annual Macquarie conference yesterday, the Chief Executive Rob Scott expressed confidence in Wesfarmers’ digital strategy responding to the consumer shift to online.
Disciplined pursuit of value accretive opportunities to add capabilities, channels or new technology
Rob Scott, CEO
Strong investment in data and digital assets
Mr Scott said Wesfarmers is well-positioned to respond to the consumer shift to online, leveraging the digital expertise of Catch, acquired in August 2019. Digital roll-out & innovation across the businesses would be accelerated.
The ‘Drive & Collect’ by Bunnings and Officeworks and conversion of 3 Kmart stores to ‘dark’ stores supported growing online business.
Strong sales momentum in Bunnings, Officeworks & Catch
Bunnings
The hardware giant recorded “strong sales growth” as customers & their families spend more time at home. Investment in digital offers would be accelerated.
Bunnings recently announced setting up of a Technology Centre in Bengaluru. As tech talent becomes central to digital strategy, the offshore centre is aimed at sharpening Bunnings’ digital edge.
Catch – Kmart group company
Catch continues to deliver impressive online growth. Terming it as “pleasing progress”, Mr Scott revealed Catch’s active customers increased 38% over the last 12 months. So the investments in Catch digital capabilities would be accelerated to leverage growing consumer shift to online.
Wesfarmers formally acquired the online retailer Catch for $230 million in August 2019.
Reinforcing the importance of Catch to its digital strategy and online growth, Wesfarmers lured former Amazon VP Pete Sauerborn to lead Catch.
“We are really thrilled to have someone as experienced and qualified in eCommerce and online shopping as Pete Sauerborn to lead Catch through its next exciting phase of growth,” said Kmart Group Managing Director Ian Bailey.
Target
The pandemic and lockdown restrictions have further affected Target’s business performance. Wesfarmers revealed a strategic review of the business, the outcome of which would be revealed in June 2020.
Wesfarmers businesses will continue to invest for the future, expand digital offerings & capabilities & reinforce the customer value proposition.
Mr Rob Scott
Officeworks
Work from home requirements drove demand for home office equipment, technology, and education supplies. This led to “strong sales growth” at Officeworks.
Announcing the Half-year results in February, Managing Director (Acting) Michael Howard said investments would be continued in ‘every-channel’ strategy to improve customer experience.
Amazon Just Walk Out
In an interesting development, Amazon recently launched JustWalkOut, offering to sell its cashier-less technology to other retailers. It is “a technology that enables the shopper to simply enter a store, grab what they want, and just go”. Unlike its app-enabled Amazon Go stores, shoppers have to swipe a credit card on entry.
Airport retailer OTG launched the first store with Amazon Just Walk Out technology. In its new avatar as a retail tech provider, amazon could help bridge the click and brick gap for many retailers. It is not yet clear how Just Walk Out could impact established retailers like Wesfarmers businesses.
