Is Bunnings sharp enough for the UK market?

Greg Cullen looks at lessons Bunnings should learn from Masters’ failure in Australia as it prepares to enter the highly competitive UK home improvement market.

Screen shot 2016-03-02 at 12.34.59 PMAs it enters the UK home improvement market, what could Bunnings learn from Travis Perkins in order to avoid becoming the failed ‘Masters’ of the UK?

For CMO’s, Big Data is no longer a buzzword, it’s essential for making strategic business decisions. The most successful companies in the world are those that use data to unlock value that was previously unknowable. These companies are deriving significant competitive advantage from leveraging data to get real-time insights around client behaviour, product offerings, pricing, promotions, store locations, stock turns and E-commerce activities.

In Australia, the home improvement market is a sizeable one – worth almost $45 billion – and it’s growing at around 4% each year. Here, Bunnings is seen as the leader and until recently the Woolworths owned Masters chain was one of its primary challengers.

Interestingly, Bunnings will now find itself the challenger as it looks to enter the significantly larger UK home improvement market this year and successfully compete against the Northampton-based retailer Travis Perkins and others.

So how can Bunnings continue to evolve and learn from its new UK competitors?

And how did a player with the clout, scale and backing of Woolworths fail so abysmally in this market?

The analysts will tell you that the failure was linked to poor execution and a lack of focus. I believe that a large part of the blame can be apportioned to a complete failure by the business and IT systems to provide insights that would inform business decisions.

The age-old pillars of marketing, the four Ps – price, product, promotion and place – rely on applying customer data insights. The $500-million epic fail at Masters can be clearly linked to not leveraging data that should be readily available.

Masters had the wrong product on the shelves at the wrong price; retail outlets in the wrong places and no real success with promotions designed to drive clients in store or online.

With an IT budget that exceeded $100 million, how was it that Woolworth’s systems were not providing the right information to the executive team?

Adversely, Bunnings in Australia is killing it. It has the product mix right, loyal and well-skilled retail teams, outlets in the right locations and innovation with their packaging and promotions. Does this mean that it will be successful in the UK?

The competition is going to fierce, with large players like B&Q and Travis Perkins that has over 1900 outlets and 200 years of trading history, already well established.

Travis Perkins we know is already leveraging Big Data software to help boost online sales, streamline its product data depositories, warehouses and e-commerce functions. The new data solution, enables Travis Perkins employees to easily identify and address duplicates in the inventory system, so that staff have the correct view of what is being sold and the company can accurately display its products online.

So beware Bunnings, your competitors are big, agile and understand how to use data. They will be able to quickly out manoeuvre the ‘Aussie battler’ who can not rely initially on a strong brand, a loyal retail team and lack of competition to take market share.

Bunnings isn’t an Uber, or an Apple or an Amazon, but it is a market leader. I’m confident it can make a huge success of the UK market if it is able to harness real time insights and convert them into key metrics to give it the needed competitive advantage.