With all the technological innovations in the 21st century, one area that is yet to take off online is the DIY and homeware sector.
Credit Suisse had its say on whether the leading incumbents including Kingfisher PLC (LSE:KGF), who own B&Q and Screwfix, and Toolstation will lose market share to online marketplaces.
The online share of this industry is roughly 20%, the investment company said, as customers want to see products in person, though click and collect makes up around 70% of orders.
Emerging DIY and homeware marketplaces, such as ManoMano, which is the leading online option in Europe, will "disrupt the market and take share", Credit Suisse said.
However, analysts at the bank believe the major DIY incumbents such as Kingfisher and Toolstation will also increasingly take share via online growth, as they leverage their scale, technology, and logistics platforms at the expense of smaller players.
Therefore, the analysts remain confident about Kingfisher’s £830mln 2022/23 profit before tax forecast, which is 5% above consensus, and reiterated their ‘outperform’ rating and 425p price target, which offers 33% upside on Wednesday’s share price.
Despite tough competition and an uncertain outlook for the current year, there’s good momentum for trade and project-related categories for the FTSE 100 company, Credit Suisse commented.
The Anglo-French retailer, which also owns the Castorama and Bricot Depot chains in France, spent the last three years addressing legacy issues and Covid-19 but with these woes passing it will allow for extra focus on growth in the medium term, Credit Suisse said.