Hardware retail: Delivery partnerships

In another profile in The Australian, Bowens said it has a commercial agreement with Uber's Australian arm for timber and hardware product. It guarantees 90-minute deliveries via the rideshare and delivery app of up to eight boxes weighing up to 20kg to building sites within a 15km radius from a store.

So far, average delivery times for the service, which charges a $10 flat fee, are less than 60 minutes. Bownes chief investment officer Andy Bowen told The Australian:

The reason we invested in digital in the first place was to focus on the next generation of builder coming through. We were concerned that we were not engaging enough with that generation.

It has been a difficult period for builders. So we are trying to do everything we can to make life easier for them.

We hear time and time again that they are starved of time. It is disruptive for them to leave the building site. For us to be able to offer Uber is a huge advantage.

It is to the point now where some of the builders are actually mandating with their teams to use the Uber service, rather than getting in the car and losing an hour off site.

John Bowen has been CEO of Bowens since 2005. He said:

Tradies and builders are growing up in a world where they are getting their deodorant and shaving cream in two hours from Amazon. This is the world that we are in. We can't continue to suggest that timber and building supplies sits outside of that.

In the past 12 months, Andy Bowen has established an in-house e-commerce and marketing team focused on same-day delivery of the large and often fragile products needed by builders on work sites from Bowens' 20 stores across Victoria.

We effectively are a logistics company in many ways. We have our own vehicles, some contract vehicles, and are able to get product to site very quickly.

When you are selling a commodity that you can buy across the road, you have to be really good at finding new products and being innovative. By making sure we deliver on time in full and deliver really quickly, we will differentiate ourselves even further from the competition.

Seventeen per cent of deliveries from the Bowens store network are currently same day, and it wants to double that number by the end of the calendar year.

Since early 2022, the firm has added about 15,000 products to its online offering, which now totals about 55,000. Its ultimate aim is to have every product that it sells online.

In the 2024 financial year Bowens said it will sell more than $600 million of timber, building materials, hardware and prefabrication products, which is up from $460 million in 2022. Four stores have been opened since March 2022, at Warragul, Melton, Cheltenham and Belmont, while two stores, at Hastings and Epping, are being extended. John Bowen said:

We've never opened up that many stores so quickly. It would be unlikely for us to do that again.

He said the company is "definitely" open to the idea of expanding the Bowens brand outside of its home state, but also said "we are not going to fall over ourselves trying".

It is also a tough economic environment for the timber and building product supplies market. In 2024, for the first time in several years, annual turnover at some of Bowens' stores will be in line with, or below, the previous year. Prices for pine framing and engineered wood products have been under pressure. John Bowen said:

It is a bit slower in the back half of the year than it was at the start. Except for our truss plant in Brisbane. It's all about Victoria. Victorian builders in the volume space are not selling enough homes. So we are feeling that.

We look at a crucial number every month, which is those builders who are no longer in business that we were trading with a year ago. It is still a pretty significant number, even if the number of those in trouble has slowed.

Bowens has always been self-funded and has never taken on a dollar of external capital. Andy Bowen said:

I worry when I look at the rest of the market and the industry, that the fabric of the business would be lost to capital investment that is external. We continue to reinvest as a family and that is the best thing for our business network.

We are growing at our own pace. To double in size in the next five years is not in our best interests. We are meeting the needs of our customers and our builders, and we are listening to them. That is the right pace for us and that does not require external investment.

Related

Bowens has an ecommerce plan - HNN Flash, August 2021

DoorDash and Lowe's

DoorDash recently announced new partnership with Lowe's Home Improvement in the US to offer on-demand delivery from over 1,700 stores nationwide. Neelima Sharma, senior vice president, digital commerce and technology at Lowe's, said:

As Lowe's continues its omnichannel journey, expanding same-day delivery options helps us meet our customers where they are. Our collaboration with DoorDash unlocks an opportunity for us to reach new DIY customers who are shopping directly on the DoorDash app...

Lowe's products can now be purchased directly on the DoorDash app, helping consumers easily shop for everyday items they need delivered same-day. All participating Lowe's stores will also be available on DashPass, DoorDash's membership program that offers members a $0 delivery fee and reduced service fee on eligible orders from thousands of restaurants, grocery, and convenience stores across the US.

(DashPass benefits apply only to eligible orders that meet the minimum subtotal requirement listed on DoorDash for each participating merchant. Other fees including service fee, taxes, and gratuity still apply. After signing up for DashPass, users will be charged the then-current renewal price plus applicable taxes automatically on a recurring basis until it is cancelled.)

Fuad Hannon, vice president of new verticals, at DoorDash, said:

...Our partnership enables consumers with quick access to must-have tools and last-minute materials to complete projects of all sizes.