DIY home improvement market revolutionised

The billion dollar Australian Do-It-Yourself (DIY) Home Improvement market has been revolutionised by big brand retailers, according to a Southern Cross University Doctor of Business Administration (DBA) candidate.

Herbert Hermens has found that DIY home improvers, who form the $42 billion per year Australian market, are much more likely to purchase products from a trusted retailer rather than search for a brand of preference.

“Confidence in the retailer is such that it can change a consumer’s brand of preference, even if that brand has high recognition and is a leader in its field,” Mr Hermens said.

“Thirty years ago a consumer would chase down the tools of a certain brand but these days they are more likely to just go to a large retailer like Bunnings and choose from their selection.

“In some ways it is a return to markets that were seen before the Industrial Revolution when brands were attached to the retailer. That changed from the mid-1700s on when product brands emerged as an indicator of quality with the 20th century arguably the epoch of manufacturer brands.

“During this period, retailers were at the benevolence of manufacturing companies who controlled distribution in order to build and develop connections with the consumer.

“This situation changed in the 1970s when retailers expanded becoming national and international contestants so that names such as Bunnings, Masters, Mitre10, Walmart, Target, Home Depot and IKEA became brands in their own right.

“Many retailers now offer their own multi-tier range of exclusive or private label brands alongside the traditional manufacturers’ brands. Retailers are reducing their costs through improved sourcing and smarter operations, which now includes reducing the range of product brands offered. Furthermore, focusing their effort on increasing the range of private and or exclusive brands offered to their customers increased sales volumes and offset any potential attack on their cash profit by retailing rivals.”

Mr Hermens found consumers purposely narrow their shopping choices to avoid being overwhelmed. This is the notion of ‘consideration set’. It’s a cognitive function that simplifies retail, product or service decisions.

Using focus groups to gather data, Mr Hermens’ study found that consumers formed a retailer preference through a consideration set.

“In doing this they articulated a desire to reduce the risk inherent in their purchase decision,” he said.

“Risk was perceived in the context of a specific potential negative impact on the consumers’ primary asset, their home, not by risk per se or its probability. Further the data indicated that product brands lacked a recognisable added value when compared with retailer brands, such as application advice and post-purchase dissonance resolution.

“Focus group members raised the notion that retailers have created brand image by creating brand equity, and by extension trust, in their own stores. They had also transferred that imagery to their products through the service they provide.”

Photo: Herbert Hermens.