We all know COVID-19 hasn’t exactly been great for the economy – to put it lightly – and a lot of Aussie retailers have found it tough. But with vaccines now starting to be rolled out across Australia and case numbers extremely low throughout the country, it’s looking like the beginning of the end of COVID-19 (in Australia, at least), and hopefully a quick return to relative normality.
With that said, we thought we’d take a look at a few of the Aussie retailers that have performed well during the pandemic, and consider what’s allowed them to thrive over the last year.
With overseas holidays off the table, what did Australians decide to do with all their time at home? Home improvements, of course. With the country in and out of lockdown, Bunnings closed FY 2020 with an earnings climb of 13.9% to $1.8 billion. The momentum barely slowed in the second half of 2020 too, with Bunnings posting earnings of $1.3 billion for the first half of FY21. So it’s been a very profitable period for Bunnings, despite its nationwide COVID-safe practices costing a massive $10m a quarter.
With the renos sorted, what’s left to do but kick back and watch the telly? Not much, so may as well pick up a new telly from JB Hi-Fi. JB closed FY20 with total sales of $7.9B, up 11.6%, and closed the first half of FY21 with an 86.2% jump in net profit after tax. According to group CEO, Richard Murray, it was a record sales and earnings result for JB Hi-Fi.
“Our continued focus on the customer and investments in our online business and supply chain have enabled us to meet increased demand both in store and online. I would like to thank our over 13,000 team members who have continued to do an incredible job and worked tirelessly throughout the period. Our team members are our number one asset and most important competitive advantage.”
Once they’d clocked Netflix on their new TV, Aussies headed out to the garage and worked on their rides. Bapcor (owners of Burson Automotive and Autobarn) saw extremely strong sales throughout the pandemic – for example, sales were up 27% in Q1 FY21. In December, Bapcor was forecasting half year revenue growth of at least 25% on last year’s figures, and net profit growth of at least 50%. You could say Bapcor’s sales were firing on all cylinders.
After being forced to temporarily stand most of its workers down in FY20 when the impact of the pandemic was at its greatest, and to close 43 Melbourne stores in the back half of 2020, one could be excused for thinking Adairs was suffering pretty badly. But apparently not. Adairs closed FY20 with sales up 12.9% to $388.9m and reported that online sales had grown to represent a massive 34.8% of total sales. As for the first half of FY21, Adairs revealed its net profits increased by 233% to $43.8 million. Based on this performance, the Adairs board decided it would be most “appropriate” to repay the $6.1 million in JobKeeper subsidies the business received during the first half of FY21.
With home offices springing up all over the country and kids forced to study at home, Officeworks’ sales were far from stationary, with earnings up 13.8% to $190 million at the close of FY20. Revenue continued to climb to the close of the first half of FY21, with Officeworks reporting a 23.7% increase to $1.5 billion, and online sales hitting 37.1 per cent of total sales.
With borders closed and lockdown restrictions in place, it’s no surprise Aussies decided to spend money making themselves comfortable and having fun at home, whether it was with renovations, new tech, new manchester or splashing cash on their cars. But what can we learn?
Before the pandemic, online sales were slowly but surely eating into real-world sales. Then along came COVID-19, and customers began shopping online like never before, and in our opinion, it’s likely to have shifted customer mindsets in a fairly permanent way. For example, customers who had previously only shopped some categories online were forced to shop a whole bunch more categories online. And now they’ve set their personal precedent of shopping those categories online, they’re likely to (at least somewhat) continue.
As online sales draw ever-closer to parity with in-store sales, there becomes less and less reason for retailers’ websites to be anything less than a truly excellent customer experience. Not one that just allows customers to shop ‘frictionlessly’, but one that really inspires and delights customers. And the most obvious way to do that is with great UX, sparkling copy and beautiful design.