Bunnings Go Online With Sights Set On Smart Home Market
Bunnings is continuing its evolution from a hardware store into a complete home supply business with a new focus on online sales and smart home products as it plans to add 10 new stores every year.
The company is looking to improve its online capabilities and offerings, possibly spurred by its position as the most visited retail website in Australia despite lacking a fully functional online store.
It plans to rectify that situation within the next 18 months.
Bunnings moving online could also help Wesfarmers improve its bargaining power in lease negotiations as the company moves to reduce the length of its fixed leases to provide greater risk management and operational flexibility.
Wesfarmers had lease commitments totaling $8.6 billion at the end of last year.
The recent addition of smart home automation products to Bunnings stores forms part of a further push into the Home, Lifestyle & Commercial market the company estimates is worth $78 billion.
Bunnings ranging smart home products places pressure on traditional consumer electronics retailers like JB Hi-FI and Harvey Norman, but the warehouse store is also going after IKEA.
The company plans to show off its Kaboodle brand in “specialist studios” that appear similar to IKEA’s showrooms, featuring the company’s flatpack kitchen kits with possible additions of laundry, wardrobe, study and alfresco spaces as well.
The studios would serve consumer customers as well as tradies, who Bunnings is attempting to appeal to while simultaneously siphoning away some of their business with expansion of its own supply and installation services.
The company plans to improve its Trade service with increased staff and support for early morning customers.
Part of Bunnings’ “Data & Digital” plan also includes using data analytics to localise its in-store ranges, improve inventory productivity, and personalise marketing and interaction with its PowerPass trade account customers.
The ubiquitous warehouse stores brought in more than $1.5 billion in 2018, making Bunnings the biggest money spinner for Wesfarmers after the retail conglomerate spun off Coles in November last year.
Bunnings now accounts for more than half of Wesfarmers earnings before interest and tax.