Australia is on the brink of a war – for the hearts and minds of tradies, DIY-ers and sausage-sizzle-loving hardware consumers around the country.
Tomorrow in the Melbourne suburb of Braybrook, supermarket giant Woolworths and its joint venture partner, US hardware giant Lowe’s, will open the first in what it promises will be a 150-strong chain of Masters stores.
The move is designed to break the dominance of market leader Bunnnings, which is owned by conglomerate Wesfamers, the owner of Woolworths other great rival, Coles.
There are already signs the war won’t just be fought on the shelves. Masters chief executive, Texan Don Stallings, has already fired a shot at his rival over suggestions that some hardware suppliers refused to deal with the new kid on the block.
”There were some vendors that sell to some of our competitors, not naming any names, that did not sell to us,” Stallings told Fairfax Media yesterday.
While Stallings was careful not to name Bunnings, the market leader has dismissed the allegations as being “palpably untrue”.
This is unlikely to be the last skirmish between Bunnings and Masters, which appears to be trying very hard to differentiate itself from Bunnings.
While SmartCompany wasn’t invited to the media tour of the new store, here are 10 ways Masters will differentiate itself:
If you ever wandered around a big box retailer trying to find a staff member to help you then you will appreciate Masters’ bell system – ring the call bells located around the store and a staff member will be with you in 45 seconds.
When these staff members arrive, they should be able to answer all your queries – Masters says it will pour 100 hours of training into staff to make them experts and lift customer service levels.
To try and prevent Masters becoming a haven for blokes, Masters has tried hard to create a female-friendly environment. The new store features a mother’s room, a playground and even shelves in the paint section where handbags can be rested.
Bunnings is the king of the warehouse model – its stores are very much low-frill affairs, with pallets of stock wheeled right onto the shop floor. Masters is promising something different, with better lighting and air-conditioning a feature of the store.
To match the more upmarket decor, Masters is focusing on a more upmarket product line up, with designer brands such as Marc and Laura Ashley featuring in the paint and wallpaper sections. There are also gourmet kitchens, designer bathroom accessories and outdoor furniture. While the chain promises to beat competitors’ products by 10%, chief Don Stallings describes the product range as “aspirational”.
The partnership with Lowe’s has allowed Woolworths to tap the US giant’s buying power and bring some products to Australia that haven’t been seen here before. These include Stahwille hand tools, Char-Broil barbeques, Troy-Bilt lawnmowers and even truffle trees, so Australians can grow their own gourmet gems.
Lowe’s buying power will also allow Masters to source product directly from factories all over the world. This will leave Masters well placed when the hardware battle becomes a price war, as it looks very likely to do.
Masters appears to have realised that taking on Bunnings won’t be easy to do by itself. As well as the partnership between Woolworths and Lowe’s, Masters will partner with financial services providers American Express and HSBC to provide finance for big purchases (say a complete kitchen) and finance for tradies.
Capturing the attention and wallets of tradies will be crucial to Masters’ success. The chain will offer drive-through facilities for tradies and a dedicated trade office to get these customers in and out quickly. It is expected trade accounts will represent up to 50% of revenue, which is likely to be more than $23 million a store.
One of the most controversial aspects of Masters is that its new store includes a McDonald’s outlet inside and the traditional sausage sizzle (a Bunnings mainstay) will only be allowed in limited periods. Controversy aside, it looks like a smart move though – there’s nothing like a Maccas to build foot traffic.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
