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Wesfarmers online sales hit $1 billion

Wesfarmers (ASX: WES) welcomed the founder of employment advertising portal SEEK (ASX: SEK) Mr Paul Bassat to its board just under a year ago in November 2012. As the just-released Wesfarmers annual report states, Mr Bassat’s experience and expertise in online business and e-commerce is being put to good use with online sales now accounting for around $1 billion of sales across the group.

It’s no wonder Managing Director Mr Richard Goyder highlighted that Wesfarmers’ “future holds much opportunity in this area as our businesses develop and implement digital strategies to lift efficiency and enhance the value we provide to customers.”

Of the retail businesses, Officeworks and Coles were singled out for their online progress. Officeworks experienced strong online sales growth, while Coles has reportedly made good progress on a new and improved website for Coles Online. The website was trialled during the year and is expected to provide a better shopping experience for customers in the future, with Coles Online now available to over 90% of Australia and operating with 264 delivery vans.

Looking forward, the annual report highlighted that the current strategic focus within Wesfarmers included innovation in product categories and all retail channels to market, including through online and store renewal programs. Wesfarmers’ strategy has similarities to the major department stores, which have recently reported a number of successes in the online space too.

David Jones (ASX: DJS) reported at its recent full year results presentation the “key achievement” of a successful transformation from ‘bricks & mortar’ retailer to an omni-channel retailer. Its new web store now offers 90,000 stock keeping units. The company has also launched mobile apps and upgraded the gift store for online purchasing functionality. David Jones reported that its online marketing was showing pleasing results with the proportion of online sales derived from email marketing programs up 200% in six months and expectations that the online business can deliver a profit contribution within its first full year of trade.

Myer (ASX: MYR) is also reporting growth in its online sales. At the company’s recent results presentation CEO Mr Bernie Brookes stated that, “our omni-channel offer has continued to strengthen and key customer metrics of online sales, page views and average monthly visits have all more than doubled since last year.”

Foolish takeaway

While many ‘bricks & mortar’ retailers are reporting growth in online sales off of very low bases, it is very important that these companies move with the times and retain their market share. Given the headwinds apparel retailers have faced from both foreign and online competitors, it is pleasing for Wesfarmers’ shareholders to see that the company appears to be on the front foot with online sales already at the $1 billion mark.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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