Unpopularity of Internet Retailing for Home Improvement and Gardening in Australia
The rise of internet retailing and m-commerce has changed the retail landscape for many Australian retailers. The widening ownership of smartphones has made shopping online even easier and more convenient for consumers. Retailers continue to integrate their shopping channels and allow consumers to make purchases across channels or with alternative pick-up options. Both desktop and mobile-optimised websites have been created by retailers to allow consumers to easily research and compare products and their ranges from various electronic devices. Such websites often allow consumers convenient options including online reservation and to pick-up products in-store.
However, this trend was not reflected in home improvement and gardening. According to Euromonitor International, Bunnings Warehouse continued to lead home improvement and gardening stores in 2015, with a 31% value share in value terms. The continual expansion in its number of stores and increasing demand for home improvement products were some of the main drivers behind this strong position. In terms of internet retailing strategy, the retailer only uses its website to educate consumers about product availability, information about in-home and in-store services and store locations. The website also hosts a range of Do-It-Yourself (DIY) advice and video tutorials on a range of tasks on which the consumer can embark. The retailer only offers gift cards as part of its internet retailing strategy. In addition, these big-box retailers for home improvement and gardening are also situated in locations across the major cities, which makes going to a store to purchase the necessary equipment or goods very accessible. Lastly, the lack of adoption of internet retailing by the leading player as part of an omni-channel approach also further contributed to this trend.
Home and garden specialist retailers remains the dominant distribution channel for home and garden products in Australia, accounting for a value share of 75% in 2015. However, its dominant position is gradually being threatened by the rise of internet retailing. Factors such as continuing technological innovation, including mobile payment and wearable devices, increasingly busy lifestyles in Australia and growing acceptance of this distribution channel are likely to lead to a shift, albeit slowly, towards internet retailing. This is especially true for homewares and home furnishing stores, as internet retailing is expected to account for a 7% share of overall distribution in 2020.
Despite the market potential for internet retailing, there are few indications suggesting that it will grow as strongly in home improvement and gardening stores. It is unlikely that the dominant home improvement and gardening retailer, Bunnings Warehouse, will incorporate an extensive internet retailing strategy similar to department stores such as David Jones or Myers. Instead, the continuing advance in online education by both retailers and brand manufacturers will help to attract additional customers. This trend is likely to continue as both retailers and brand manufacturers seek to compete to gain loyalty amongst the new generation of home owners.