Grow with ReCo #3: Lessons from Bunnings

Ever stood in line at Bunnings on a sunny Saturday morning, the scent of sizzling sausages filling the air, a home improvement project half-formed in your mind?

This is a masterclass in customer understanding by Bunnings Warehouse. They go far beyond hammers and paint because they know who their customers truly are. Since 1886, the two Perth-based brothers have gone from saw-milling to Australia and New Zealand's most iconic hardware store for families and tradies.

This week's Grow with ReCo mini masterclass discusses the most fundamental topic in business: who are your ideal customers?

Bunnings know their customers

Bunnings’ customers are passionate about DIY projects and outdoor living. They are local customers. They love their local communities. Many of them have kids. They love their projects but most of them are also budget conscious.

Bunnings offers everything for home improvement projects, with their lowest prices policy and knowledgeable, passionate staff. There are weekend sausage sizzles, local charity support and DIY workshops. Pets are also welcome in their stores!

In 2024, Bunnings even transformed their stores for a collaboration with the iconic kids TV show, Bluey. Stores were turned into the Hammerbarn, the hardware store in the show - a classic weekend experience for Bluey's family.

All this customer-centric work has helped Bunnings cement its position as a household name in Australia and New Zealand.

How to find your ideal customers

Bunnings' success hinges on their deep understanding of their core customer segments, and the brand positioning around their needs and aspirations.

What's the most fascinating about Bunnings' customers:

• At a glance, they are mass market (of course, it's Bunnings)
• But when drilled down (pun intended), they focus on specific niches in specific locations. They own those markets, and become the go-to place for customers in those markets.

That we believe, is both a work of art and science that takes a long time to evolve and perfect.

1. Defining who your ideal customers are

Many businesses start with a niche, but it can feel like a double-edged sword. Go too broad, you get lost in the crowd. Go too narrow, you risk creating a market that's too small to sustain your business.

From a business perspective, we always advise our clients to think:

• What problem does your product or service solve and how does it solve for?
• Who can pay for your products and services?
• Is the market big enough for you?

The key lies in finding the sweet spot: a niche that aligns with your unique offering and vision, but with huge potential to grow - and pay for your values.

2. Discover your customer insights

If you've been running your business for a while, you should have some customer insights, through 3 methods:

1. Data: This can be your sales data, customer data, social media analytics, website analytics. Pool all that data to understand who they are, how much they spend with you, what value do you bring to them.

This method is non-negotiable. It eliminates all the guesswork and focuses on the facts and figures to inform your decision-making.

2. Your own understanding: This can be from your interactions with your customers and your gut feelings. The more you experience with your customers, the better you know them, and the more you can trust your own gut feelings.

3. Your team's insights: Value the opinions and suggestions from your customer service and sales team. They are the people who are at the forefront dealing with your customers. Their insights could become invaluable for your growth.

3. Analyse your insights

Analysis can be technical, but there is a high-level understanding that you can get from your insights.

1. Look for trends and patterns.
2. Categorise your audience based on these patterns.
3. Look for the 'why' behind their actions to uncover their motivations and pain points.

The outcome of your analysis should serve the purpose of identifying who your ideal customers are. But remember, people change, businesses change, markets change. So you'll need to stay open and flexible, and review your strategy as you grow your business. Adaptability is one of the best strategies you can adopt. It’s like Ross from friends said, “PIVOT.”

4. Leave rooms for experiments

We don't know what we don't know. Wherever possible, you may want to test out different ways to find missed opportunities. Here are 2 methods:

• Broad to niche: You can start with a broad category like 'people who are interested in home goods'. Acquire those customers. Interact with them, understand them. You can then narrow down these customers into different niche segments, and gain insights on which segments should have your focus.
  
  

• Niche to broad: A good example is Sydney-based brand, Boody. They started as a bamboo underwear brand, built a reputation around the eco-conscious crowds with support from Dr. Jane Goodal being their ambassador. Today Boody's expanded to bamboo clothing and is sold by many retailers including The Iconic.

Look out for more newsletters to come. We'll talk about how to build your audience personas next. 

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Grow forward,

Danling & the ReCo team

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Grow with ReCo

This article is part of our Grow with ReCo Digital Marketing initiative to empower small business owners and creators.