Ag Tech Sunday - E-Commerce .....Boom

By Kelsey Miller - DelayPay

know I am not alone in thinking that retail will probably never look the same again, the COVID 19 jolt has unchained a movement that has been underway for many years.

But what does this mean for Ag? What has shifted? What’s out of the box now that is unlikely to disappear once life returns to (or closer to) normal? An area that intrigues me is retail sales of Ag goods via rural produce stores.

What change has been forced by COVID 19 for retail outlets selling the like of crop inputs, fencing and animal health supplies? Short answer is not much yet, from what I can see. Some stores have implemented localised “click and collect” style services and relied more heavily upon “home delivery” but this is hardly game-changing. I would suggest that the curve shown above for this sector would be less of a hockey stick, in fact I reckon it would be a straight line.

A quick bit of research demonstrates why a shift hasn’t occurred during the COVID 19 jolt. Try typing “Online sales animal health Australia” into google and see what comes up. Then try “Online sales rural fencing Australia”. In both cases the returns are pretty indicative on why a revolution has not taken place.  

In the top four hits on both searches there is no sign of a Elders or Nutrien or any well known disruptor nipping at the heels of the big guys.  

Feels a bit like the early days of the “Myer” slide to me. For several years if you did the same experiment with Myer in mind you would not find it in the top few either. Over the years the disruptors started popping up more and more as they started chipping away at this once dominant business.  

COVID 19 has put Myer on the brink of irrelevance in its current form. I wonder whether this will repeat itself down the track for rural produce stores, after all there is no reason why the goods that are sold at these stores could not be distributed directly to customers via an Amazon, Kogan or dare I say Farm Tender.

It will be even more interesting to see whether any of the big players learn from what has played out for Myer and take the brave path of disrupting their current retail model. I think a good case study for this is the changes you are seeing in how Bunnings are operating. After resisting for several years Bunnings seem to have shifted into a mindset of owning the online space for hardware. I wonder whether we will see Elders and Nutrien lean into this in a similar manner or will the “Myer” mindset prevail whilst a wave of online disruptors gradually eat away at profits, potentially until it's too late.

Whilst the boom of e-Commerce hasn't happened yet in rural supply sector, I think you would be brave to bet against a major shift over the next 10 years. Like many I will watch with interest to see who wins the battle.

See all blogs

www.delaypay.com.au