Recently I’ve been thinking about retail and the move to online. I mean when we run low of liquid soap, or dishwasher tabs, or two-minute noodles, I don’t bother putting it on a shopping list I just open the Amazon app and it arrives the next day. The fact they have managed to crack the 1B annual sales means I am not alone, even though this is well below their initial market expectations. Incidentally, Amazon Australian operations continue to be a loss proposition.

Amazon are not perfect; they don’t carry everything – shock – and the prices are not always competitive. That and sometimes you want to see the item or speak to a “knowledgeable” salesperson.

Prime, no pun intended, example being a few weeks ago I had made a lasagne which was about to go in the oven. The oven though didn’t heat up. Quick disassembly and hey presto spaghetti bolognese. Oven problem solved next day at Good Guys* The knowledgeable salesperson upsold me into a model I probably didn’t need, but I’m happy with the experience.

JB had close on 9B of sales in FY21 a figure which has been steadily growing over the last 5 years. Profit was up nearly 70% on pcp. Online is now above Australian retail market of 11% at 13.1% of sales.

There is a risk that these results are short term and there is a pull back in the next financial year although the market does not seem to think so with shares now well above pre 2020.

A thought about bricks and mortar stores is, possibly, they are not just about retail. US online spectacle retailer Warby Parker sees their stores as valuable marketing vehicle for introducing new customers to the brand. Shoe and apparel retailer have similar thinking, viewing stores as effective and profitable source of customer acquisition. I think the same could be said for the yellow JB stores.

Retail is hard, I don’t own any , but this one looks to be doing things right. Additionally, I don’t think Amazon is as much of a threat as many analysts originally expected. While they are a juggernaut, JB would be wise to continually look over their shoulder.

*acquired by JB Hi Fi in 2016