New Wesfarmers chief executive Rob Scott says the conglomerate is just as “paranoid” about Amazon as it is any other competitor, as he talked up his company’s credentials as a “disruptor”.
In his first official presentation since taking the reins of Wesfarmers from Richard Goyder two weeks ago, Mr Scott downplayed concerns about Amazon’s looming Australian launch, arguing “good retailers are paranoid about everyone”.
“We look at hundreds of competitors all the time all over the world … we are paranoid about every competitor in the market, including the one you mentioned,” Mr Scott said in response to a question about Amazon at a Morgans event in Perth.
“We think it is dangerous to only focus on one competitor. We think it is dangerous to only focus on competitors and not focus on customers. So what we are focused on is how we can continue to improve our customer offer and benchmark the offer that we provide to our customers to the offer that everyone else is providing them.”
In that regard, Mr Scott said Wesfarmers’ retail arm – which includes Coles, Kmart, Target, Bunnings and Officeworks – had demonstrated success in deep discounting, “one of the most disruptive trends” in the industry.
“Some of the fastest growing retailers in the world don’t even have online capability – groups like Aldi and Lidl are good examples in the supermarket space – so we need to make sure that we continue to maintain very strong value credentials in our business and I think the businesses where we have very strong leadership in value – Kmart and Bunnings – are good examples of the success we have had,” he said.
“Online transactions and home delivery is not a particularly new concept … we are already, in Wesfarmers, one of the largest online retailers in Australia. We have over $1 billion of online sales.”
Given the level of disruption across all industries, Mr Scott said he was heavily focused on “doubling down on our efforts to make that sure that we take advantage of the opportunities around the change rather than be victims of that change”.
“We have demonstrated over the years that we have been innovators and we have been disruptors in various businesses and industries,” Mr Scott said.
“I think the turnaround of Coles is an example of that, the creation of the Bunnings business model is a great example of that as is the turnaround of Kmart and Kmart’s leadership in deep discounting.”
Earlier this month, Amazon’s Australian country manager Rocco Braeuniger told its first seller summit in Sydney it would launch its local retail platforms “very soon”. Investors are worried about impact the launch will have on the retail industry, particularly over the coming Christmas period.
Asked when he expected Amazon to launch, Mr Scott said he had “no idea” but added Wesfarmers’ strong Christmas retail offering was “open for business” and he was reasonably optimistic about trading conditions.
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