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Digital Growth Plans for Bunnings, Target, Officeworks
The Managing Director of Wesfarmers, Rob Scott, has announced plans to grow the company’s existing stable of businesses through digital capabilities, rather than focus on acquisitions.
In a recent strategy day presentation, Scott detailed plans to drive growth at Bunnings, Target and Officeworks by focusing on data analytics and digital technologies that will help the conglomerate learn more about what its customers actually want.
Part of the businesses upcoming plans is the $20 billion demerger of its largest business, Coles, which Citi analysts believe will give the company an estimated $12 billion in mergers and acquisitions to spend on its other brands.
According to Scott, he would rather invest capital in Wesfarmers’ existing businesses that still need development work, before seeking out new investment opportunities.
“We have no problem being small, or having a smaller capital base if that delivers superior and better returns to shareholders,” Scott said.
“We’re not fixated on scale for the sale of scale, or growth for the sake of growth. The only growth we’re interested in is growing shareholder returns.”
It’s believed this renewed focus on increasing the value of its existing brands is a result of Wesfarmers’ bungled investment in Bunnings in the UK and Ireland, which saw the business burn $1.7 billion in shareholder value.
Moving forward, Scott told event attendees that Wesfarmers will be establishing an advanced analytics centre. The centre will reportedly be staffed by a team of data scientists whose main objective is to analyse customer data to “identify opportunities”.
Another big area of growth for the group moving forward will be a renewed focus on Bunnings’ online platform, with a new e-commerce strategy reportedly in the works.
Over the past year, Bunnings has been accepting “special” online orders through its website, which Michael Schneider, the managing director of Bunnings, says has helped shed light on the transactional technology that’s needed to effectively roll-out a full e-commerce platform.
“What we’re seeing is a huge demand…. for a full click-and-collect offer, but there’s no doubt in my mind that’s where we’ll end up,” Scheider said.
After Wednesday’s strategy meeting, Wesfarmers’ shares rose 1.77 percent to a close of $46.48. This figure has remained somewhat steady, trading at $46.30 when the market opened Friday morning.