Amazon set to sell BBQs, garden equipment, outdoor furniture

An international retailer launched a new store today, wanting to steal customers from the iconic Australian hardware chain.

Online retail giant Amazon has revealed a plan to claw market share away from Bunnings with the launch of a range of outdoor products including barbecues, patio furniture and garden equipment.

The new store was rolled out on Tuesday and adds to its collection of electronics, clothing and domestic products.

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“Our new garden store has a range of enticing outdoor products from gardening equipment to pool supplies to patio furniture to BBQs,” Amazon Australia manager Rocco Braeuniger said.

“Our garden store adds to the over 125 million products already available on Amazon.com.au, underscored by great value and fast delivery.”

Amazon’s outdoor store launched Tuesday.

Bunnings, owned by conglomerate Wesfarmers, controls 20 per cent of the hardware and garden supplies market in Australia and has seen off competition in recent years, notably from Masters Home Improvement.

Managing director Mike Schneider refused to comment directly on the push from Amazon but said another player in the market was nothing new for the durable operator.

“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.

“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.”

Last month, Wesfarmers managing director Rob Scott revealed Bunnings had increased sales in the 12 months to June 30 by 5.0 per cent to $13.2 billion despite a downturn in the national housing market.

“Obviously there was some weakness in residential housing … But as we’ve highlighted over the years, Bunnings’ product range is very diverse,” he said.

“People have over-estimated the reliance Bunnings has on residential housing.”

Bunnings accounted for 57 per cent of Wesfarmers’ earnings and Mr Scott said it was “well positioned for continued growth in FY20” despite an expected continuation of moderated trading conditions.

Mr Schneider said Bunnings’ online store would be more convenient for customers.

Although it’ll be difficult for Amazon to compete with the cultural obsession of Australians grabbing a snag and perusing the local store on a weekend, its presence does complicate Bunnings’ push online.

The Wesfarmers hardware store chain wants to sell more than 60,000 products on the web and confirmed to news.com.au its click-and-collect option was already available in Victoria, Tasmania and the Australian Capital Territory.

South Australia will be next.

“There are so many good online players out there we want to make sure the way we serve our customers is a very positive and a very Bunnings experience,” Mr Schneider said in March.

He said its online store would be more convenient for customers.

“A product that sells out almost every weekend is turf — we’ll put two or three pallets of turf in the store and it’s gone sometimes on the Friday night because customers want to secure that stock,” he said.

“That online purchasing … will help customers be more confident they’re not driving to a couple of Bunnings stores on a weekend to fill out the project.”

AMAZON’S THREAT TO AUSSIE RETAIL

Since Amazon’s arrival in December 2017, online spending has increased and now accounts for 9 per cent of total retail sales in Australia, according to a report earlier this year from investment bank UBS.

The “Amazon impact” has led to local retailers investing more in online data to counteract the US company’s presence and the rate of online penetration has accelerated, the investment bank found.

That change in behaviour has been driven by shoppers wanting better pricing and convenience with electronics, baby products and clothing most at risk by the move online.

UBS expects online penetration to rise to 14 per cent by 2023, broadly in line with the global average, but 27 per cent will be driven by Amazon alone.

It warned discretionary retailers will need to improve price, range and service as margins are squeezed.

“Online take-up will be driven by consumers’ ability to get what they want (range), when they need it (delivery) at a good price,” said UBS retail analyst Ben Gilbert.

“As range and scale builds we expect share gains to accelerate (per offshore experience) and remain comfortable with our $4 billion revenue target for Amazon in Australia by FY23.”

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