As promised in a previous blog, I was going to have a look at the Hardware industry and who’s doing what (or who?) and whether I think it’s working. So lets start at the top: with the all-conquering Bunnings. They’ve been number one for a long time and will continue to be number one for a long time into the future. They operate 167 warehouses and 60 smaller format stores across the nation with annual sales of over $5.3 billion. So what can we learn from the Hardware giant?
Lesson Number 1 – Consistency. Bunnings feels the same, looks the same, behaves the same, no matter where you are. Their ads have had the same feel and their catalogues have maintained the same illustrated style for as long as I can remember. A Bunnings store is a familiar place, no matter where you are.
Lesson Number 2 – Their staff are their heroes. To quote from their website:
“Our Team Members are the heart and soul of our business” (note the capitalised ‘Team Members’).
This statement comes second only to satisfying their customers. They live and breath this statement so much their current ads feature Bunnings staff members from all over Australia. Sure, the ads are pretty average and they can’t be applauded on quality, but they are real, authentic and natural. The experience you have when you walk into a Bunnings store is the same (again reinforcing consistency). There are no lies and no tricks.
Lesson Number 3 – The Price Guarantee. Hardware is a product that can’t be easily differentiated. Wood is the same from one retailer to the next. So how do you make a mark? Why would customers choose you? Easy – have the lowest price. In 1994 when the first Bunnings Warehouse opened, this sort of price guarantee wouldn’t have been very common, if existent at all. Bunnings thought of it first, and now they own it. No other competitor will ever be able to beat them on price – EVER.
Lesson Number 4 – Taking it Beyond the Price. One might argue that how could you ever create brand loyalty by positioning yourself based on price and price alone. But Bunnings didn’t leave it at that. They have cafe’s and playgrounds in their Warehouses. They have the biggest and best selection of products. All their products are kept in stock. They have DIY workshops for dads, mums and kids. They have sausage sizzles. They have created an experience. When you enter Bunnings you forget that they have the cheapest prices. You are lost in all the other benefits they offer you.
So what are all the other guys doing wrong? The poor little guys – Mitre 10, Makit, Home Hardware, Thrifty Link – they’ve all tried to take on Bunnings (aka Goliath) and have all failed. They’ve tried to compete. They’ve tried to differentiate. Nothing seems to work. I believe the only way they can make it work is to steer away from the one-stop-shop approach (it’s clear Bunnings has won this right), and look to specialising in a certain product grouping. Go to Bunnings to get everything under the sun. Come here to get specialist advice on a specialist product. It’s clear Bunnings/Goliath will continue to barrage his way through the Hardware industry. My advice – get out of the way!