Data and digital capabilities drive Wesfarmers online sales up 33%

A total of AU$3 billion was reinvested into the company, with part of that being put towards an analytics centre and an improved online transactional platform.

Retail giant Wesfarmers has reported that ongoing investments made towards its data and digital capabilities contributed to the company's net profit after tax of AU$5.5 billion for the full-year ended 30 June 2019.

The company also reported that earnings before interest and tax came in at AU$6.8 billion, a lift from the AU$2.8 billion reported during the same period last year.

"During the year, we successfully completed the repositioning of the Group's portfolio, with a highlight being the successful listing of Coles as a standalone company. Importantly, we were able to distribute to Wesfarmers shareholders the profits realised from these actions," Wesfarmers managing director Rob Scott said.

"The group continued its disciplined approach to capital allocation with operating divisions increasing their focus on digital investments and investing in their respective customer offers."

Wesfarmers reported a total of AU$3 billion was reinvested into the business, some of that was for its advanced analytics centre to accelerate data capabilities across all its divisions; the enhancement of its digital offering, such as its Click and Collect channel and online transactional platform; and the improvement back-end systems and processes by building scalable platforms.  

Read also: How Google Cloud for Retail will help digitally transform shopping (TechRepublic)

The investment resulted in Wesfarmers reporting strong growth, with an increase of 33% in overall online sales due to improved customer experience.

Revenues across each of its retail division was also up. Bunnings revenue increased by 5% to AU$13 billion, while Officeworks increased by 8% to AU$2 billion.

Meanwhile its Kmart group, which includes Kmart, Target, and the recently acquired Catch group, saw revenue increase ever so slightly by 1% to AU$8.6 billion. While total sales declined 1.5% for the group, the company said it continued to experience higher website visits and customer conversion online.

Earlier this year, Wesfarmers revealed it was going to make data analytics a business strategy, instead of a side effect.

Part of that has involved adopting a one-day program focused on data analytics for leadership teams that teach them about data analytics, including the differences between advanced analytics and business intelligence reporting.

"When you think about customer centricity, particularly the use of behavioural data, it can be quite challenging to do that without data so there its relevance becomes a lot closer to the surface. But that's an end-state that we want to move towards so I think it's really about at first -- in the initial stages -- allowing [for the development] of business priorities such as how can we help make better decisions faster," Wesfarmers general manager of Advance Analytics Alan Lowthorpe previously said.

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