Bunnings Group’s managing director Michael Schneider said the business will continue to make strategic acquisitions to deepen its relationship with builders and trade customers, similar to its recent acquisition of Adelaide Tools and Beaumont Tiles, which remains subject to regulatory approval.
Schneider said electrical, plumbing and appliances, such as refrigerators and dishwashers, are all areas where the retailer could potentially expand its offering to better cater to the ‘whole of build’.
Bunnings recently opened the first new format Adelaide Tools store in Parafield, South Australia. It plans to open the first Adelaide Tools store outside of South Australia in Western Australia in the first half of FY22.
“A staged rollout across Australia and New Zealand will follow over the next 12 to 18 months,” Schneider said.
Kmart, Target and Catch working smarter, not harder
Wesfarmers’ department store arm, Kmart Group, which includes the Kmart, Target and Catch businesses, has started collaborating in several key areas to reduce costs and gain efficiency.
Kmart Group’s managing director Ian Bailey highlighted property as one of those areas, and said the property teams at Kmart and Target have been working hard to move to a more variable lease structure as they renegotiate new leases. A larger portion of leases are now based in part on revenue, so that the cost of rent goes up and down with sales, rather than being fixed.
Another area where the group is leveraging synergies is in the area of fulfilment, with Catch customers able to collect their orders from Kmart and Target stores. Kmart and Target are also selling their own brands on Catch Marketplace, which Catch managing director Peter Sauerborn described as a win-win-win: “It has extended the reach of the brands, and it’s also contributed to Catch’s growth,” he said.
Target focusing on brand as it emerges from restructure
With the closure of the Target Country format nearing completion, Target Australia is a smaller and simpler business, albeit still a significant one, with 142 stores and annual sales in excess of $2 billion, the retailer’s managing director Richard Pearson, said. The focus now is on leveraging Target’s reputation for affordable quality to return to growth.
“We see the Target brand as our key asset. It’s got very strong awareness, [there’s] a real love for the brand and we need to continue to build on this,” Pearson said.
Target also plans to leverage Kmart Group’s data capabilities to gain deeper insights into its customer database to provide a more personalised experience and improve its online offer.
One area where customers shouldn’t expect to see much change in the near-term is in the look and feel of Target stores. Given the retailer’s track record, this would likely be viewed as an unwise investment, according to Bailey.
Catch looking to grow awareness
Like many other online retailers, Catch experienced significant volatility in demand last year, as varying Covid-19 restrictions caused customers to shift between online and in-store visits, and the business delivered $1 billion in gross transaction value in the 2020 calendar year.
But compared to the likes of Kmart, for instance, Catch’s brand awareness remains relatively low. Improving that will be key to driving new customer acquisition going forward, according to Sauerborn.
“Last year, we launched a campaign showcasing the breadth of our product…[it was] Catch’s first major investment in brand marketing,” he said, referring to the retailer’s ‘Everyday Aussies’ campaign. “Catch will continue to build on this platform that we’ve established in future years.”
While Australia’s online marketplace sector is relatively crowded, Bailey believes that growth in the broader e-commerce industry will insulate Catch from having to pull share away from its direct competitors in the near term.
And when competition between marketplaces does increase, he believes Catch’s access to Kmart and Target own brands will give it an edge.
Officeworks expanding into adjacent markets
Officeworks is looking to expand beyond its core business into new markets, including B2B products and services for small businesses, remote working solutions for medium and large businesses and a back-to-school offer geared focused on schools and education institutions.
“We know we’re trusted by parents and students for our back to school offer…but we haven’t really explored how much we support schools with back to school,” Officeworks’ managing director Sarah Hunter said.
After trialling a new ‘classroom essentials’ service, Officeworks will now focus on helping schools stock up on the products they need throughout the school year.
It also plans to better support its existing small business customers with more tailored printing services to meet their sales and marketing needs. It currently only has 1 per cent of the B2B printing market.
Officeworks will also start catering to medium and larger businesses with new products and services for employers to help their teams set up home offices for flexible working.