Wesfarmers sees online sales jump 57 percent after digital push

Wesfarmers-owned brands Bunnings, Kmart Group, Officeworks and Catch.com.au have reported strong results over the year, totalling $3.3 billion in online sales alone.

In the company’s 2021 full-year results, CEO Rob Scott said Wesfarmers had seen a 57 percent increase in online sales as it strengthened its “digital capabilities”.

“We continue to see our digital operations as complementary to our in store offer, with many customers enjoying this omnichannel experience,” he said on Friday.

As part of this digital push, the retail giant is accelerating the development of a “data and digital ecosystem” to “provide more seamless and personal experiences” for customers.

It recently appointed Australia Post executive general manager Nicole Sheffield to lead the initiative in the newly created role of managing director for digital and digital development.

“To support this initiative we expect an operating expenditure investment of around $100 million dollars over the next 12 months,” Scott said.

He added that “the broader investment around [the digital] ecosystem particularly relates to the customer data interfaces and flows”.

“Some of the additional functionality and enhancements that we're thinking [of investing in] are going to be important for the future,” he said.

Bunnings managing director Michael Schneider said the brand had also taken “enormous steps, not only in terms of technology and infrastructure but the quality of the technology”.

He pointed projects like Bunnings wayfinding app and PowerPass app that have been launched over the last year.

Schneider also said there is “some degree of pressure” facing deliveries for all retailers, including its own ‘click and deliver’ service “partly because of demand, partly because drivers get stood down because of [Covid-19] restrictions.”

However, he remains confident in Bunnings’ online competence to switch operations to a complete digital experience if needed.

“In regional Victoria last week, we had two hours’ notice to go from fully open to 100 percent online for retail and the team did an incredible job, so I think the models been well established it's well understood,” he said.

All greater Sydney stores went 100 percent online for retail this week to help “reduce movement” during Covid-19.

Kmart Group, including the Catch marketplace, was the largest contributor to Wesfarmers’ e-commerce success, with total online sales increasing to $1.9 billion over the year.

Almost 50 percent of online sales for Kmart and Target came via ‘click and collect’ capabilities.

Wesfarmers CFO Anthony Gianott told investors that “continued investment in data and digital initiatives across the group” contributed to the company’s total capital expenditure climbing to $896 million over FY21, a 3.3 percent increase from the prior year.

“For the 2022 financial year we expect net capital expenditure for the group to be between $1 billion and $1.25 billion,” he said.

Wesfarmers reported a statutory net profit after tax of $2.38 billion and a total group revenue of $33.9 billion, up 10 percent from the same period last year.