Q+A: Wesfarmers CEO Rob Scott on AI, Bunnings and what worries him
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Welcome to Fear and Greed Q&A, where we ask and answer questions about business, investing, economics, politics, and more. I'm Sean Aylmer. Wes Farmers, owner of Bunnings, Kmart, Officeworks, among others, held an investor day yesterday and said artificial intelligence, automation, and smarter operations will drive its next phase of growth. The group, which is heavily leveraged to the consumer, expects Powerhouse Bunnings to continue its evolution from hardware retailer into something much bigger. Rob Scott is the managing director and CEO of West Farmers. Rob, welcome back to Fear and Greed. Thank you, Sean. Let's start with AI and how you can use AI and what it can do for your different businesses in a really practical sense.
Well, Sean, we are thinking about it in a very practical sense. And there are new technologies largely around generative and agentic AI that we are seeing can be used to really focus on three key areas. Number one, improve the service and the engagement we have with our customers. Secondly, provide tools that help our team members do their jobs more effectively and elevates their role. And then finally, there's a whole lot of productivity efficiency type initiatives. And at our investor day, we really tried to bring these to life in a very tangible way. Across West Farmers, we're very aware that there's a high degree of nervousness and uncertainty in the community about AI. So first and foremost, we emphasize that we are adopting a people-first, digitally enabled approach.
And that means that we're going to be very mindful of the impact that any systems have on people. people, whether it's our team and our customers, whether it's the community, but then it does need to be digitally enabled. And in many ways, this isn't a new move for Wesfarmers. We're already many years in the evolution of leveraging our data, leveraging digital technologies to be more efficient. So I'll give you just a couple of quick examples. We were one of the first retailers globally through Bunnings to launch an agentic commerce solution. called Buddy. So this enables customers to engage with Bunnings Online in a conversational way to help them discover products, develop projects, and ultimately buy all the products associated with developing a project.
That has been really successful, getting really good uptake. We've also launched a similar program within Kmart called Joy, which actually enables customers to interpose apparel onto pictures of their body and so forth. which is a really great way of shopping virtually. We've also given our team tools to access the vast amount of data and insight, which essentially lets them do their job more effectively. So they're just two examples that we're really seeing good outcomes for our business.
Ultimately, and you're not allowed to say both to this question, Rob. Ultimately, is this about driving revenue or is it about becoming more efficient? And I don't even mean saving costs because there's a lot more to efficiency than just saving money. But which one is it? Is it about driving revenue or is it about efficiency?
I'm sorry you say that I can't say both. Look, the reality is that the way we think about it is that customers, we want customers to be able to engage with us in the way that suits them. If they want to shop online, click and collect, come to our stores for the great service we have in stores, that's great. Through large language models and agentic commerce, customers can now engage with retailers in a really sophisticated conversational way through digital tools, through agentic commerce. So if we can do that well, we'll obviously grow our revenues. So this will be a revenue driver. The other point is that, as you know, particularly in Australia, inflation is a problem.
How is AI transforming Wesfarmers' business operations?
Cost of doing business is a problem. Regulation is a challenge as well. So costs of doing business continue to go up and up and up. If we want to find ways to be more efficient as a business in order to keep our prices lower for customers,
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