Bunnings is set to radically ‘re-invent’ his business in response to rising house prices across Australia.
Bunnings is set to radically ‘re-invent’ his company in an effort to target the expensive Gen Z Australians born between 1997 and 2012 – who have been hounded by an astronomical rise in house prices.
Home ownership in Australia has not been seen since the 1950s and poses a significant threat to the hardware giant that relies on customers to make home improvements.
Bunnings is clearly aware of this, and CEO Michael Schneider has vowed to transform the company to appeal to a younger generation, the majority of whom still live with their parents.
Speaking at the Global DIY Summit in Denmark, he said Bunnings will increasingly engage with influencers and bloggers on social media, increase his presence on YouTube and develop apps to help young people visualize their living space.
He seemed sympathetic to Generation Z Aussies, who he believes made up about 20 percent of the population in the Asia-Pacific region, but who had been crushed by rising house prices and spent some of their most formative years in lockdown.
“We believe Gen Z has defined attitudes and preferences that require a new look at the DIY shopping experience,” he said at the conference, according to the the Australian†
“Today, compared to the average do-it-yourselfer, they are rarely buyers of DIY products. And while that’s probably not too surprising, given that most still live at home, it means there are fantastic opportunities to connect, engage and inspire them around all things DIY.”
Bunnings sees a huge opportunity
Bunnings’ push to appeal to a younger market comes as Gen Z and millennials are quickly becoming a factor to consider when it comes to retail spending.
Investigation of Afterpay shows currently account for 36 percent of total retail spending in Australia coming from those two generations alone – spending up to 7 percent more than pre-Covid levels.
Their share of retail spending is expected to grow to 48 percent by 2030 as more of Gen Z (currently aged 9-24) enter the workforce.
Home ownership is a major barrier for these generations to spend their disposable income in stores like Bunnings, as they have been increasingly frozen off the housing market by excessive property prices.
However, Mr Schneider said he believed young Australians were still focused on buying a home.
“I say this because our research shows that they are absolutely thinking about their future homes and, despite the affordability issues, are optimistic that they will one day own a home,” he said. according to the Australian†
He said Bunnings would target influencers on social media and platforms like YouTube to help Gen Z discover the Bunnings brand and get inspired about home projects.
“They want to get their DIY inspiration and discover products the same way they manage their social media feeds and use other digital services,” he said. “For Bunnings, that meant doing things a little differently, finding social influencers and brands on social media and thinking about apps to visualize an online space, blogs and YouTube videos.”
Bunnings faces a new challenger
This all comes as a new challenger has vowed to assume Bunnings dominance in the DIY retail space with a huge range of home improvement products such as fans, lighting, bathroom furniture, kitchen fixtures and wallpaper, and much more.
Online furniture retailer Temple & Webster announced this month that it would move into the $26 billion DIY space with the launch of a new company called The Build, no doubt aiming to capture some of the innovators who would otherwise come to Bunnings. to go.
The company said it will spend $10 million setting up The Build, with plans for an initial offering of 20,000 products across 39 categories.
Temple & Webster CEO Mark Coulter said more categories, including tools and construction equipment, will be added in the coming months.
“Australia is a country of home innovators, we love our homes and we love making them more beautiful,” said Mr Coulter.
“The Build by Temple & Webster aims to make home jobs, big or small, easier, cheaper and better.”
Having already gained a foothold in the furniture space, Mr Coulter said The Build wanted to fill a gap in the online DIY market, which accounts for just 4 percent of home improvement sales in Australia, compared to 25 percent in the UK.
The company has its job to do as Bunnings currently accounts for about half of the Australian market.
– with NCA NewsWire
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