![]() ![]() It was literally in your face.Ĭonsider product range. Bunnings’ brand colors are dark red and green - “brash” and “masculine” you might say. ![]() Customers were used to the Homebase brand. It required a monumental shift in a customer base, from female home enhancer to male DIY builder, that affected multiple components of the company’s strategic positioning. In DJ’s case they refocused the business on a set of customers they already had. In the case of the truss and frame manufacturer we lopped off a sub-set of customers. As a result, DJs received a profit boost.īut there’s a big difference between these examples and the Bunnings experience in terms of the degree of change required in the customer base. ![]() profitable, and DJs brand, style and culture appealed to her. The core customer was chosen because she was a big spender, i.e. This is not to say that teenagers and men weren’t looked after they just weren’t the focus. DJs’ core store offering had moved off message by trying to focus on everyone.ĭJs began to concentrate on her. She was defined as the “30-to-54-year-old higher-income woman.” She was already a customer, but she was not catered for sufficiently. DJs was in a slump some years ago and the CEO turned the business around by refocusing on its target customer. The leading Australian retail department-store chain, David Jones, had a similar experience. This refocus was one of the key ingredients in the turnaround’s success. I say “beautifully” because this refocus enabled us to reduce the stock of timber in our warehouse, thereby releasing cash and cutting our expenses. As a result, our product range shrank beautifully. Large companies that built hundreds of homes a year mid-size builders who constructed several homes per annum and “mums and dads” doing small projects who shopped mainly on Saturday mornings.Īfter some agonizing we narrowed our target customer down to “the professional builder.” Out went the mums and dads. The company was losing money and I had to confront a key business question: Who is our target customer? We had all sorts. Some years ago, I was CEO of a company that made trusses and frames for houses. Of course, it is quite possible to shift customer focus without disastrous results. She (note the gender change) has been described by Homebase as “the home and garden enhancer: generally female customers/households with children, of ABC1 demographic, with above average income.” (The ABC1 demographic makes up about 53% of the UK population and is described as higher, intermediate and junior managerial positions and professional occupations.) It’s clear that Bunnings stripped out popular concession brands such as Laura Ashley far too quickly and ended up with a poor line in kitchen and bathroom products. The answer is that Homebase’s customer was quite different from Bunnings’ traditional target. ( Wesfarmers will also receive 20% of any proceeds from the subsequent sale of Homebase by the purchaser, Hilco Capital.) Hilco Capital, the purchaser, has since announced that it will revert to the Homebase strategy. and that it had sold Homebase for just £1 (about US$1.30). hardware and homewares chain Homebase for $AU705 million (about US$503 million) with plans to spend up to $AU1 billion (about $US714 million). The aim was to convert the chain of 280 Homebase stores to the Bunnings model.īut Bunnings’ model, so successful in Australia, utterly failed in the U.K., and in May 2018 Bunnings’ holding company announced that it was withdrawing from the U.K. and Ireland? Bunnings’ holding company, Wesfarmers, purchased the struggling U.K. In 2016, Bunnings thought: if our formula works well in Australia, why not in the U.K. Its advertising slogan, “lowest prices are just the beginning,” has been drilled into every Australian’s head. This doesn’t mean that women aren’t catered for, they’re just not “core.” Bunnings’ key differentiator is price. Its target customer is a man involved in do-it-yourself (DIY) building and repairs, or one working in a trade. Take the highly successful Australian retail hardware chain Bunnings, which dominates its regional market, with 330 trading locations across Australia and New Zealand. And even with a conscious refocusing there are pitfalls changing target customer isn’t easy and it doesn’t always go to plan. But it’s not uncommon for even successful businesses to become unfocused as they seek to grow by catering to a broadening spread of customer demands. They focus on the most important customers to the business, and sometimes even refocus on a more lucrative target market. They strive to cater to specific and strategic customer needs. Successful businesses know exactly who their target customers are. ![]()
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