Two-thirds of the Australian population buying something every year from home-improvement market leader Bunnings, and the introduction of Woolworths-owned Masters Home Improvement has apparently done little to eat into the market share of rival chains.
But the new kid on the home improvement superstore block is slowly growing in popularity with the latest figures from Roy Morgan Research indicating that Masters has been increasing its customer base consistently over the last year, with 8% of Australians aged 14 or over having bought something there, which is up 3% from a year ago.
The affects of the new store aren’t being felt too deeply by main competitor Bunnings, with consumers paying an average of seven visits to the store per year, compared to just three by Masters shoppers.
Fellow competitor Mitre 10 hasn’t seen much change over the last year, with 17% of the population buying something there each year and averaging five trips to the store annually.
Industry communications director at Roy Morgan Research, Norman Morris, says on the research results, “Since opening nearly two years ago, Masters has almost 30 stores and is now trading in most Australian states. Its association with the reality TV program House Rules would also be boosting its profile. However, its lack of impact on customers at Bunnings and Mitre 10 suggests shoppers have added Masters to their retail repertoire rather than stopped shopping at its competitors.
“With the increased level of competition in the hardware field, it’s no longer just about wheelbarrows, nails and power tools. Masters is appealing to customers who want to change or improve their home décor as well, with a large range of decorating products on offer and even a section dedicated to ‘Ideas & Inspiration’ on their website,” he says.
After cutting in on the home improvement segment controlled by Bunnings Warehouse, Masters, the joint venture between Woolworths and US home improvement chain Lowe’s, has launched what it claims to be another customer service first, with the ‘ultra-handy’ new Masters Home Improvement iPhone app for renovators.
The hero feature is its ‘Chat Now’ functionality that offers real-time customer service.
Director of Masters, Melinda Smith explains the functionality: “We’ve taken the innovation of our popular in-store customer service buttons, where a staff member will respond within one minute of being called, and moved it into the digital world,” she says.
Aside from the hero in Chat Now, the app also features:
Product Finder: where usersshop for more than 30,000 products and search through 19 categories to buy on the spot
Projects: a practical library of ‘how-to’ videos, articles, and step-by-step instructions on a range of projects
Scanner: a price comparison tool
Inspire Me: a trend-spotting device
Store Finder: find the nearest store, how to get there and opening hours
Featured Products: all the best products handpicked by experts.
Smith explains how there is “nothing like it in the market” and harbours dreams that this app will “soon become a must-have for anyone looking to make their DIY or home project as fuss-free and successful as possible”.
In the app space, market leader Bunnings has three apps, each for a single function: a store-finder, a paint calculator and a flooring calculator. The all-in-one functionality of Masters’ app, as well as the chat function, will no doubt be a boost to its drive to differentiate based on customer service.
Dettol is Australiaʼs most trusted brand and Bunnings was named Australia’s most trusted icon in a study that found health and chocolate brands generate the greatest trust.
Brands that are perceived as good for our health, like Band-Aid and Panadol, or that make us feel better, cue chocolate brands Cadbury and Lindt, dominated the top 10 of Readerʼs Digest’s Most Trusted Brands 2012 study.
Breakfast food brands Uncle Toby’s and Kellogg’s, oral hygiene market leader Colgate and health brands Betadine and Elastoplast also featured in the top 10.
“In uncertain times, itʼs the brands which continue to offer quality and substance that hold our trust,” notes Australian Readerʼs Digest editor, Sue Carney. “They have a long history of being steadfast and safe, which makes them a hot property in modern day Australia.”
Readerʼs Digest’s study, conducted by Catalyst Research among a nationally representative sample of more than 2400 Australians, also broke down trust in brands across a range of fast-moving consumer goods and other strongly brand driven categories.
Bunnings topped the ʻAustralian Iconʼ category, edging out Vegemite and Dick Smith, and also outperformed Big W and Target in the non-supermarket retail category. Woolworths came out on top of arch-nemesis Coles as the most trusted supermarket, while Sony edged out rivals Panasonic and Samsung as the most trusted TV and home entertainment brand.
The Commonwealth Bank emerged as the most trusted bank ahead of ING Direct and Bendigo Bank. Dove performed well across multiple categories, while Toyota topped car brands, Dyson was most trusted among vacuum cleaners, Pedigree was favoured for feeding pets and Breville took top honours in the kitchen.
The study was conducted in January 2012, with an initial qualitative phase conducted to develop a list of brands to prompt respondents and eliminate the tendency for brands that may be top of mind due to recent marketing pushes being favoured in the results.
Masters is a new DIY retail concept launched into the Australian market on 2 May 2011. Hulsbosch was appointed to work with Woolworths, in partnership with US home improvement giant Lowe’s, to create the new Masters Home Improvement brand. Hulsbosch was entrusted with designing and overseeing all brand applications including the name, identity, signage and the complete in-store experience.
The idea behind the Masters brand was a strategic business move by Woolworths Limited to break into the $42 billion home improvement market, currently dominated by the Bunnings Warehouse chain owned by Wesfarmers. With Bunnings as the clear market leader, the importance of creating impact was key to the new brand’s successful launch.
Masters offers a range of over 35,000 home improvement products to trade and retail customers include lighting, paint, flooring, kitchens, outdoor furniture, appliances, gardens, walls and windows, power tools, storage, plumbing and bathrooms, and its 12 current stores are intended to expand to a network of 150 sites across Australia over the next five years.
Objectives
The big picture challenge that faced the brand was entering a market which was lead by an established and sole competitor, Bunnings, and having a strong enough brand proposition that could promote interest and trial, thereby winning customers in order to build a loyal customer base.
In 2009 Woolworths appointed Hulsbosch to develop the name, identity, the brand’s entire look and feel, store interiors, livery, uniforms, signage systems, collateral and merchandise. The retail brand was to be timeless, memorable and instantly recognisable.
In a market dominated by competitor brand, Bunnings, Masters needed to have a positioning that could instantly capture the attention of retail and trade consumers of both sexes of all ages and cultural backgrounds.
Having an existing relationship with Woolworths, Hulsbosch had an opportunity to evolve Woolworths’ positioning strategy of ‘Better quality, better service, better price’ by empowering customers with information on how to select and use specific products.
With customer service identified as a key area that could set the brand apart, Hans Hulsbosch travelled to the US to experience hardware shopping at Lowe’s and their competitors first hand.
Strategy
By immersing itself in the home improvement market both nationally and internationally, Hulsbosch armed itself with extensive research to develop the Masters name and visual identity.
The solution for the name, ‘Masters’, came from a simple insight. If you want to build or renovate your home or business, who do you trust to do the job? Answer: the master builder; the master painter; the master craftsman.
Woolworths recognised the values inherent in the name. It is synonymous with excellence, skill, professionalism, trust, guidance and artistry and backs up the Woolworths positioning from which Hulsbosch had borrowed inspiration.
So too, it could connect with both staff and customers alike empowering them with clearly defined goals to be ‘masters’ of customer service and their DIY projects, respectively.
Execution
The visual articulation of the brand identity was inspired by the turning thread of a drill-bit. The forward motion symbolises the search for a better future and the colour of dark blue is the tradesman’s colour, chosen to represent the brand.
Through collaboration with Leffler Simes Architects, Hulsbosch created bright, airy and spacious store interiors. Stores are brightly lit and colourful with polished concrete flooring to place more emphasis on attracting female shoppers.
Buzzers are located around the store which, when pressed, alert a nearby staff member to that location to assist customers. Customers can use pagers to enable them to continue shopping while their paint is tinted, and selling more ‘non-hardware’ lines such as white goods, as well as having McDonald’s restaurants and McCafés in selected stores are all intended to create a completely satisfying in-store Master’s brand experience.
Stores have defined areas for trade and retail customers, and there is a consistency of message articulated through a distinctive visual language from the store’s exterior signage, which sees the identity brought to life with a 3D treatment, to the way-finding car park signage, high level in-store corporate banners, in-bay signage and self-service checkouts.
To develop the educational signage system, Hulsbosch worked with dozens of client vendors, breaking each product category down into simple ‘how to’ explanations. The team developed a colour strategy to classify products by task, type and quality. In all, Hulsbosch designed and implemented over 3,000 internal signs. Other brand iterations included truck livery, merchandise, staff uniforms, credit cards, name-tags and brochure work.
Results
Half-yearly results showed Masters clearly outstripped Bunnings in growth, posting a 16.4% increase in sales figures in the six months ending 31 December 2011 – almost two and a half times the growth experienced by Bunnings.
In Woolworths Limited third quarter sales results for the 13 weeks ended 1 April 2012, it reported an increase in total group sales of 3.8%, to just over $14 billion.
While most of the company’s divisions saw modest improvements, Masters was once again the stand out of the group, posting a 29.4% increase in sales, from $163 million to $211 million, year-on-year.
The launch of Masters has generated a significant amount of press coverage, which is likely to translate to increased brand awareness over time, and the brand launch has been welcomed by the industry as it introduces competition in a sector that was being driven by one major player.
Additionally, the company has announced that it will be launching a Masters Home Improvement transactional website in the fourth quarter of the fiscal year as part of Woolworths’ new ‘multi-option offer’.
The below video features an interview with Hans Hulsbosch detailing the inspiration behind major aspects of the brand creation as well as briefly illustrating its development.
More than half of Australia’s top 30 brands registered declines in their value over the past year, with Harvey Norman and David Jones among the worst hit, a study has found.
There were clear winners and losers over the past year, Brand Finance found in its annual study into the value of Australian brands. Retail and finance brands bore the brunt of the tough conditions, with many in these sectors experiencing a 10-20% decline in the value of their brands, but it wasn’t all bad news for these sectors with standout brands performing well.
In the retail sector, Bunnings, Coles and Target showed that growth is achievable despite difficult trading conditions, notching 20.3%, 14.5% and 10.0% increases in brand value respectively.
Coles, valued at $4.7 billion, succeeded in closing the gap on rival Woolworths, gaining $597 million in value and moving up the ladder to reach third position. Woolworths, valued at $7.1 billion, maintained the top spot despite losing $504 million of value, prompting managing director of Brand Finance Australia, Tim Heberden, to point out three areas where retailers could step up their game. “Due to increased international competition and changing consumer behaviour, Aussie retailers are learning the importance of customer service, brand differentiation, and omni-channel strategies,” Heberden says.
Australian finance brands also recorded mixed results over the past year, but on the whole outperformed their global peers with six of our banks featuring in the top 100 of Brand Finance’s global list of the top banks. MLC declined the most out of the top 30 brands, shedding 25.8% of its brand value. Macquarie Bank and St George also experienced significant declines, but at the other end of the scale BankWest and ANZ increased in value by 16.5% and 9.8% each. The Commonwealth Bank (CBA) seized the title of Australia’s most valuable banking brand from NAB, increasing its value by $185 million.
Another brand value study, Millward Brown’s BrandZ, recently ranked CBA as the most valuable Australian brand on the global stage at $13.1 billion, compared to the $4.1 billion valuation given in this study. However, Millward Brown does not release Australian results or include all Australian brands in its global list, making no other comparisons possible.
Brand Finance calculated the overall value of the top 30 Australian brands at $51 billion, well below the value it attributes to the largest global brand, Apple, at US$71 billion. The researcher calculates a brand’s value by looking at a company’s market share, profitability, reputation and emotional connection with consumers.
Telstra held on to second place in 2012, gaining $294 million to reach a value of $5.1 billion, placing the telco on par with the once great Nokia brand in an international context.
The Qantas brand continued to free fall dropping below the billion dollar threshold, although this year’s drop of $108 million represents a reduced rate of decline.
Objectives
Stores have defined areas for trade and retail customers, and there is a consistency of message articulated through a distinctive visual language from the store’s exterior signage, which sees the identity brought to life with a 3D treatment, to the way-finding car park signage, high level in-store corporate banners, in-bay signage and self-service checkouts.