Lauren Fitzgerald, Strategist in Ebiquity’s Communications Insight team, examines the likely impact of Aussie home improvement brand Bunnings’ arrival on the UK DIY scene.
In February this year, Australian conglomerate Wesfarmers acquired Home Retail Group’s Homebase chain of DIY sheds for £340 million. All Homebase stores will be replaced by Australian home improvement brand Bunnings over the next three to five years. Past behavior from this disruptive brand on home turf suggests it’ll shake up the market.
Bunnings in Australia: a pillar of the community
Established in 1886, Bunnings is the leading retailer of home improvement and outdoor living products in Australia and New Zealand, with a revenue last year of A$9.5bn. With 330 stores and an aggressive expansion strategy, the brand controls 17 percent of the home improvement market in Australia. Indeed, Bunnings’ role goes beyond that of a simple DIY retailer – in 2015, the brand was ranked eighth in Ipsos’ Most Influential Brands report, based on a ranking of 100 Australian brands by consumers.
What best explains the profound impact Bunnings plays on Australians’ lives? As Gillian O’Sullivan, Executive Director at Ipsos Marketing & Health, says: “Bunnings has a strong philosophy that it’s part of the community and makes a lot of investment in grassroots – and that’s really important.” Its heavyweight bricks and mortar presence, coupled with an engagement with communities at the hyperlocal level, gives Bunnings a firm footing in everyday Australian culture.
Brand identity and communications strategy
Bunnings’ brand identity is built on three core areas: low price, broad product portfolio, and exceptional customer service, with the tagline ‘the lowest prices every day’ – a guarantee the brand holds with pride and confidence. Its communications strategy positions this low price offering at the heart of the brand’s messaging, with advertising leveraging value for money through a mainstream and attainable positioning.
Bunnings holds its extensive product offering as a compelling selling proposition, communicating a clear intention to be the go-to destination for all things DIY and home improvement. TV and Press creative showcases the sheer range of products available at Bunnings, while content on the brand’s YouTube channel features a video series called ‘What’s new in our aisles?,’ promoting the latest products to hit the shelves. And all at the lowest prices, of course.
This focus on price is actually disingenuous. Mystery shopper reports consistently reveal that Bunnings is, in fact, more expensive than competitors such as Mitre 10 on a number of items. Bunnings has made a point of boosting its perception of competitive price and, by both shouting loud about low prices and steadfastly honoring its price-match pledge, has built the perception that it is, indeed, the cheapest shed in town.
Targeting strategy: no-one is safe
It is clear right across Bunnings’ activity that the brand targets three distinct audiences – namely women, families, and DIY enthusiasts – adapting its communications tactics to achieve a broadened appeal.
The brand hosts Ladies DIY Nights in stores twice a year, creating an environment in which women can come together to learn new skills without being intimidated by the typical male DIY machismo. What’s more, its activity on Pinterest generates further appeal toward this target audience, with guest pinner Shaynna Blaze (an Australian TV personality) adding an aspirational appeal.
Bunnings also creates experiences that parents and children can enjoy together, with in-store playgrounds ensuring that the children are entertained while mum and dad shop for their DIY needs. The brand also hosts a Kids DIY YouTube series featuring videos that are educational and fun.
This all-inclusive approach integrates a number of strategies, but running through them all is the theme of education. Bunnings continually offers tips, advice, and ‘how to’ guidelines on completing DIY projects, particularly on its digital assets. That said, there are some less-well-developed aspects of Bunnings’ digital activity that could be exploited by UK competitors looking to fight back.
Digital: a weak link?
Bunnings is certainly active on key digital channels – its YouTube subscriber fanbase is bettered only by B&Q in the UK. That said, this dedication to digital is not seen across all channels. Bunnings’ Twitter channel is more totemic than functional. It was only launched in 2012 with just a single tweet sent since. Other UK sheds are streets ahead here.
Bunnings will also need to make more of its website when it makes its presence felt in the UK. Although consumers can make ‘wishlists’ of items on its Australian site, there is no e-commerce functionality – a critical differentiator. Bunnings will need to expand and invest in its digital strategy if it wants to gain traction with UK consumers.
Bunnings in the UK: a bold move from an aggressive brand
Bunnings’ move to the UK is a gamble, and one for which the odds have lengthened since Brexit. The seismic shift in UK politics has some analysts already declaring Bunnings’ strategy a failure, with Bank of America Merrill Lynch’s David Errington stating: “Our economics team anticipates the UK could enter recession following Brexit. We believe the initial investment Wesfarmers made ($700 million) has a zero value.”
However, Bunnings’ CEO John Gillam remains confident of the company’s strategy: “We knew of the Brexit risk when we planned the investment and moved money into pounds to fund the acquisition and investment. So we have a natural hedge against currency movements.” His attitude captures the essence of the company itself: bullish, and not afraid to take risks.
The move to the UK is certainly risky, with the retailer planning to invest £500m over the next five years. But it also offers Bunnings not only a key foothold in the UK, but also – assuming the UK government is successful in securing vital, post-Brexit trade deals – a starting point for mainland European expansion. Bunnings has shown historically that it is not afraid to spend money, either on growing its store network or on advertising.
The brand will be faced with more competition in the UK than it is used to back home, notably from B&Q, Wickes, and Wilko, meaning that its price guarantee and low-cost offerings are likely to continue to underpin every aspect of the brand’s offering.
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