Retail update
Increased home improvement sales at Amazon
American shoppers are increasingly turning to Amazon to buy tools and home improvement
American shoppers are increasingly turning to Amazon to buy tools and home improvement
 
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Aussies visit Bunnings website the most and Ruralco posts strongest half year profit
HNN Sources
More US shoppers are buying home improvement goods on Amazon; new study shows Bunnings is the most visited Australian retail website; and Ruralco's core business helps to deliver its best ever half year profit.
Amazon making inroads in home improvement

According to research from One Click Retail, American shoppers are increasingly turning to Amazon to buy tools and home improvement, outdoor and sporting goods, and home appliances.

In the tools and home improvement category, Amazon had an overall growth rate in 2016 of 35% over the previous year, compared to the US domestic market's total growth of 6%. Sales of woodworking items rose 30%, while sales of garage storage products increased 35%.

Nathan Rigby, vice-president, One Click Retail, which specialises in eCommerce data measurement, sales analytics and search, said:
Though often seen as an Amazon-proof industry, the old-fashioned American hardware store is not untouchable. Amazon has all the same advantages in the tools and home improvement sector that it has in grocery, beauty products and health care - and we've seen plenty of evidence of those industries feeling the Amazon Effect. As more uber-connected millennials enter home ownership, Amazon's share of this product group, like many others, will continue to grow at a disruptive rate.

In the outdoor and sporting goods category, Amazon's 20% year-over-year growth in 2016 was four times the rate of the overall market, according to One Click Retail. Mr Rigby said:
Amazon understands that it's the consumer driving the company's success. The ways they are innovating new services and offerings, they are doing so with one thing in mind: is this what the consumer wants?
E-commerce sales near USD11bn

Global information company, The NPD Group also finds that online sales of home improvement products have grown 41% in the 12 months ending March 2017.

The e-commerce home improvement market reached USD10.9 billion in sales for the year, according to NPD's receipt mining service, Checkout TrackingSM.

With the exception of outdoor living, online sales of each major segment of the home improvement market grew in the 12 months ending March 2017, and almost every category tracked within those segments experienced double-digit online dollar growth.

The fastest growing categories last year were plumbing pipes and fittings, light bulbs, and ceiling fans, and the categories with the largest online sales gains were home decor, light fixtures and lamps, and rugs. Joe Derochowski, executive director and home industry analyst at NPD, said:
The pace at which e-commerce is gaining acceptance among home improvement consumers emphasises the need to understand how consumers are utilising online and in-store shopping options, and how to make them work together.
Marketers can capture the replenishment of commodity products, like light bulbs and air filters, by offering online convenience, but there are also opportunities to benefit from consumer showrooming for bigger ticket items, like bathtubs and vanities, with the in-store experience.

NPD's Checkout Tracking E-commerce information illustrates that the online sales growth reaches across a variety of home improvement categories and consumer age groups.

Millennials are a driving force behind this online growth, with the younger segment growing at the fastest pace, and the older portion accounting for the largest share of dollar gains. However, gen X and the baby boomer generation are also very active in online home improvement spending, representing almost two-thirds of industry sales for the year. Mr Derochowski said:
The current demographic changes are driving increases in the number of people entering life stages that are important to home improvement categories, from first-time home-buyers to downsizing empty-nesters, the industry is in a prime position to help consumers today and develop new shopping habits that will last for decades to come.

Related:
On Amazon now you can add tradies to shopping cart - HNN
Retail industry development in 2017 - HNN
Bunnings is most visited Australian retail site

A new study into the visitation of Australian retail websites has seen Bunnings beat JB Hi-Fi for the number one spot.

The research, by global discount platform Cuponation, found that Bunnings had 25.58 million hits to its site between January to March 2017. However, when international sites were added into the mix, Ebay was the clear winner with 215.38 million hits in the same period.

Amazon came in at second spot, an indication that Aussies are comfortable with online behemoth.

It follows on from reports that Amazon will "disrupt" traditional retailers such as JB Hi-Fi and Harvey Norman when it finally arrives in Australia and another study that found searches for anything "Amazon" in Australia had jumped 93% since July last year. In the research, Cuponation also noted:
Users from Australia are big consumers of foreign webshops...It's a big challenge for domestic webshops to keep up with the foreign ones. The competition is hitting hard and consumers tend to find alternatives in other markets and through other e-commerce channels.

The top 10 Aussie sites were the following:

1) Bunnings.com.au: 25.58 million

2) Jbhifi.com.au: 25.06 million

3) Woolworths.com.au: 19.28 million

4) Officeworks.com.au: 15.90 million

5) Coles.com.au: 14.61 million

6) Kmart.com.au: 14.54 million

7) Harveynorman.com.au: 13.99 million

8) Kogan.com: 12.37 million

9) Bigw.com.au: 11.07 million

10) Catchoftheday.com.au: 8.98 million

The top 10 most visited retail sites (when overseas sites are included):

1) Ebay.com.au: 215.38 million

2) Amazon.com: 62.13 million

3) Ebay.com: 36.11 million

4) Bunnings.com.au: 25.58 million

5) Jbhifi.com.au: 25.06 million

6) Woolworths.com.au: 19.28 million

7) Officeworks.com.au: 15.90 million

8) Coles.com.au: 14.61 million

9) Kmart.com.au: 14.54 million

10) Harveynorman.com.au: 13.99 million
Record half-year profit for Ruralco

Ruralco, owner of the CRT group of independent rural retailers, reported net profit after tax for the first half of the year jumped 15% to $12.4 million, up from $10.8 million in the previous corresponding period.

Revenue of $841.4 million was up 4% on first half 2016.

Ruralco Holdings managing director and chief executive officer Travis Dillon is pleased with the "core business" performance that delivered record half-year profits on the back of good seasonal conditions across regional Australia.

Strong sales growth in rural merchandise, fertiliser and crop protection chemicals, high average livestock prices, recovery in the wool market and increased real estate sales volumes at higher average prices drove a strong performance by its rural services division, Ruralco said.

Gross half-year profit for the division was $132.7 million from revenue of $697.1 million compared to $118.4 million from $694.3 million for the same period last year, it told the Australian Securities Exchange recently.

But while higher than average rains across agricultural regions boosted rural services, it had the opposite effect on the company's water services division. Gross division profit slipped $2 million in the half to $27.5 million on revenue up from $96.7 million to $102.3 million.

Geographical concentration of its irrigation supplies and water trading businesses in above average rainfall areas in the west and south of the country contributed to the impact of the rains, Ruralco said.

But completed acquisitions of 14 new businesses during the half year - including Great Northern Rural Service, Geraldton (WA) - in key catchment areas and agricultural centres was expected to diversify the division's earnings base for the future, the company said.

Company focus in the second half of the year will be to optimise operational and financial performance of its newly integrated business acquisitions and the Ausure Consolidated Brokers joint venture in its insurance business.

It would also continue to the commercialisation of an unmanned aviation vehicle (UAV) with PrecisionHawk and UAV flight services expert The Ripper Group.
HNN Sources


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