Is Amazon the New Bunnings?

Ally Feiam By Ally Feiam | 11 Sep 2019

Bunnings have found a new competitor to sink its teeth into: Amazon. The US online retail giant has launched its latest service to Australia, a home and garden store. Just like Bunnings, Jeff Bezos’ brainchild will sell BBQs, plants, patio furniture and everything in between. 

The announcement was made on Tuesday, adding to its vast collection of electronics, apparel and domestic products. But, will this new category play any effect on the Aussie favourite? It depends.

What’s So Great About this New Category?

Amazon promises a massive range of products, with a promise of ‘up to 20 per cent’ off selected products. “Our new garden store has a range of enticing outdoor products from gardening equipment to pool supplies to patio furniture to BBQs,” explained Rocco Braeuniger, Amazon Australia’s Manager. “Our garden store adds to the over 125 million products already available on Amazon.com.au, underscored by great value and fast delivery.”

Aside from its myriad of products available, Amazon offers Amazon Prime members the chance to make a purchase with free delivery on selected products, and a ‘guaranteed’ two-day delivery turnaround. However, as with all marketplaces, many third-party sellers provide their own shipping rates, which may result in customers paying a hefty sum for delivery. These third-party sellers also determine the shipping time, so customer may wait a few days longer than expected to receive their goods. This is to be expected of all online marketplaces, however.

The products in this category are vast – with lawnmowers, BBQs, outdoor lighting, furniture and plenty of garden decor. Much like Bunnings, it provides a selection of goods that you would expect to spend a hefty amount on, but promise great pricing.

Should Bunnings Be Worried?

We shouldn’t jump to conclusions, because even though Amazon has created a splash with this story, it doesn’t mean that customers will drop their love for Bunnings and rush online. There are few reasons why people go into Bunnings’ physical stores to grab a new BBQ or chimenea – they like to touch, feel and ask professionals about the product before they make a purchase. “Having our team of experts in-store means we are also able to offer great service to run alongside our online transaction capability,” explained Mike Scheider, the Managing Director at Bunnings. “We typically find that many of our online customers like to head into store to pick their items up.”

Bunnings is owned by conglomerate Wesfarmers and controls 20 per cent of the hardware and garden supplies in the Australian market. Bunnings also accounts for 57 per cent of Wesfarmers’ earnings, and was ‘well-positioned for continued growth in FY20′. It’s no stranger to competition, as Mr Schneider explained. “We’ve been competing with a wide range of retailers across a broad spectrum of categories and products for a long time and we always welcome competition,” he said.

Earlier in 2019, Bunnings announced the launch of its click and collect service – complete with a fit-out in Melbourne’s Fed Square, with a sausage sizzle. Available at all warehouses in Victoria, it allows customers to order an item online and collect within the store, so they can touch and feel the product.

“Compelling value, assortment, convenience and availability ensure our customers can trust we’ve got the right products both in-store and online and we continue to be chosen for this along with the expertise and knowledge of our team,” he continued.

Last month Wesfarmers’ Managing Director, Rob Scott, noted that Bunnings’ sales had increased by five per cent in the last 12 months, ending June 30th. Despite the downturn in the national housing market, the sales rose to $13.2 billion. “Obviously there was some weakness in residential housing … But as we’ve highlighted over the years, Bunnings’ product range is very diverse,” Mr Scott explained.

Bunnings has created a culture within Australia of your ‘local tradie that’s here to help’. With the pinboard in the store with the staff’s faces pinned amongst the local school fundraisers and other community notices, it seems that Bunnings is a true part of the Australian culture. Not to mention its sausage sizzles outside the stores. If a customer goes to Bunnings and didn’t get a sausage, did they really go to Bunnings? While it’s small, these experiences create an atmosphere for the consumer. You come for the products, you stay for the community. Bunnings is inherently Aussie, which is something that Amazon has to work on to compete with.

What do Industry Professionals Think?

Should Bunnings be worried? No. Not yet, anyway. According to Trent Rigby, the Senior Anayalist at Retail Oasis, Amazon may be a threat that’s waiting to happen. “I think Amazon is a huge threat,” he explained. “I just don’t think it is [a threat] yet. But there’s real potential there. Down the track, in a year or two, they pose a huge threat to anyone in that home and hardware space.”

It’s not a time for Bunnings to freak out, but it’s also not a time for it to sit back and relax, either. Amazon has to work on charming its Aussie customer, which Bunnings can do in spades. However, Bunnings has to keep a watchful eye on the massive tech giant that may be looking towards them – this is no time to get complacent.

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