Why Bunnings is paying close attention to Aldi and its weekly deals

Over 6000 independent hardware stores to close as Bunnings and Masters nail the competition

Australian home improvement giant Bunnings is taking a leaf out of Aldi’s book, drawing inspiration from the German retailer’s popular weekly specials.

During Wesfarmers’ annual meeting with investors yesterday, Bunnings Group chief executive John Gilliam said the company was focusing on pre-empting competitors with both its range and marketing, according to news.com.au.

Bunnings Australia managing director  Michael Schneider told investors that each week, Bunnings sees a spike in its website traffic that coincides with Aldi’s weekly Special Buys catalogue release.

Bunnings is well-known for its “beat it by 10%” price policy, suggesting shoppers are quick to compare Aldi’s specials with other players in the market.

“It’s good for us because competition drives you to go harder at what you want to do,” Schneider told investors.

“We’re very quick to respond in terms of putting products in front of customers.”

Aldi’s bi-weekly deals, known as Special Buys, are a series of heavily discounted products found in the store’s centre aisle. For example, this week the supermarket is offering a cordless drill for $89.99 – as is Bunnings.

The discounts, which are only available for a limited amount of time, have garnered an almost cult following among Aldi shoppers, many of which line up outside stores each Wednesday and Saturday morning just to get their hands on the goods.

The goods themselves are almost famously haphazard, with traffic cones being on sale one week, and full size outdoor table sets the next.

However, some analysts have attributed the success of Aldi in Australia to these regular bargains.

A spokesperson for Aldi told SmartCompany its Special Buys are designed to “help our customers get the best value on products which support their passions and interests”.

“Special Buys arrive in store each Wednesday and Saturday and are themed around activities our customers are most likely to be interested in at that time of the year,” the spokesperson says.

“Our Special Buys deliver hard to beat value because our streamlined business model enables us to keep our prices low. Our logistics and supply chain operate with world-class efficiency, keeping delivery routes short and employing best practice warehouse techniques.”

Positioning is key

David Gordon, retail expert and business advisor at LZR Partners, told SmartCompany says it’s all about the message the stores are sending.

“What Bunnings is trying to convey is that the deals at Aldi aren’t that much more special than what consumers can get at Bunnings,” Gordon says.

“The way that Aldi positions their deals just makes it very easy for consumers to decide they need to visit.”

Gordon says Aldi’s marketing works by triggering a reminder in customers that they need or want a specific item.

The retailer then tries to cover all bases with their wide and erratic range of items on sale.

“It’s a completely different shopping experience between the two,” Gordon says.

“Consumers will go to Bunnings with a plan to buy multiple things, where consumers will go to Aldi to buy the one thing that might be on sale.

“People always feel like there is a deal to be done at Aldi.”

SmartCompany has contacted Bunnings for further comment.

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