The Wesfarmers Ltd (ASX: WES) share price has risen more than 1% in reaction to the news that Bunnings is going to utilise online sales to boost the business.
Bunnings is the jewel in Wesfarmers' retail crown with much how much of the Wesfarmers total profit it generates each year. However, investors and management alike have recognised the threat posed by online competition such as Amazon.
To beef up its retail offering, Bunnings is going ahead with a national rollout of its click and collect service after a successful trial in Tasmania, according to a report in The Australian.
Bunnings has come up with its strategy by looking at early adopters and seeing what fellow hardware store businesses are doing overseas.
Managing Director of Bunnings Group Michael Schneider said "So I think we recognise that, for a whole variety of different reasons, we could have had an opportunity to be online with transactions a little bit earlier, but it's the advantage of doing it now as we are leaning into some very contemporary technology platforms.
"We wanted to get the very best service for our customer, we didn't want to have a great in-store Bunnings experience but a clunky website, which had to have that Bunnings feel to it."
Just over two-thirds of products in the store could be available for click and collect for the next day if ordered before 4pm with staff picking the orders as they work.
Apparently the online orders in Tasmania have been, on average, larger than what is purchased by walk-in customers.
The click and collect strategy might be the most profitable way to attract online sales without damaging the profit margin too much, as delivery can be an expensive part of the process for businesses like supermarkets.
