Why you’ll be spending less time at Bunnings in future

Weekend trips to Bunnings are about to get a little quicker, with the home renovations retailer set to launch a supermarket-style ‘click & collect’ service across the country in the coming months.

Following a successful trial of online ordering for a range of special orders, Bunnings is reportedly preparing to launch the service for the 13 million Aussies who visit its website every month.

Until recently, the big box retailer didn’t offer a way for consumers to buy goods online. However, that changed in November last year when Bunnings started to take orders on a limited range of around 20,000 products, which shoppers could order via the website and have delivered to their door.

Speaking at parent company Wesfarmers’ annual strategy day, Bunnings Managing Director Michael Schneider said: “A strong physical presence that’s complemented with an increasing e-commerce platform will help us develop a winning offer”.

Mr Schneider acknowledged that the move had been a “long time coming” in an industry worth more than $21 billion a year, according to the latest data from IBISWorld, with further growth expected in the next five years.

At this stage, online sales are said to account for just a fraction of total revenue, at around $300 million.

The click & collect service would allow customers to order their home improvement or garden products online and pick them up from their local Bunnings store within hours.

“There’s no doubt in my mind that [click & collect] is where we will end up, that’s the reality of the world we live in now,” Mr Schneider said.

IBISWorld senior industry analyst, James Thomson, told SmartCompany that Bunnings leads the way in the home renovations industry with an estimated market share of more than 35%.

Mr Thomson said the number of businesses offering e-commerce options in this space has more than doubled in the past 10 years, with manufacturers also choosing to sell their tools and accessories online. But Bunnings appears to have a clear advantage.

“The ability of Bunnings to also dominate online will come from price power,” he said. “Bunnings already has economies of scales via its physical network of stores and this should allow it to offer the same low prices it is known for online.”

You can’t just flick a switch and go online

Dr Gary Mortimer, a retail expert and associate professor at Queensland University of Technology, said he was surprised there isn’t already a number of retailers dominating this segment of the market, but believes Bunnings’ seemingly slow and steady approach to selling online makes sense.

“What Bunnings recognise is that it’s not as easy as flicking a switch and going online,” he told SmartCompany.There’s a myriad of challenges in launching a large scale e-commerce offering and online sales still only account for a small proportion of total retail spending in Australia.

“You’re not sending pallets around the country anymore, you’re sending boxes of small items.”

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