Without having any significant exposure to what went on behind the scenes at Masters, it is difficult to pinpoint exactly what went wrong, but we can still attempt to analyse it from a consumer’s point of view. In fact, I’m going to use my own personal point of view for this exercise.
When I heard that Woolworths are making an entry into the Australian hardware market I was intrigued and not a little curious. With a Bunnings Warehouse on practically every corner, what was a new player going to bring into the game? Will they introduce new ways of selling hardware, like Aldi did with groceries? Will they engage in a pricing war? How on Earth are they hoping to supplant such a well-entrenched monopoly as Bunnings?
I was looking forward to witnessing some daring dramatic strategy playing out – perhaps something new and unexpected, but, alas, nothing of the kind ensued.
The first time I walked in a Masters store I was instantly disappointed. It was a near-perfect copy of Bunnings, with the only real difference being an inventory of some domestic appliances.
As I was walking through the aisles, I heard an announcement over the loudspeakers asking ‘all associates to attend the morning staff meeting’. Associates? The employees were not thought of as a part of the family but as ‘associates’? Maybe it was just me, but the word left a bad impression. And so my first opinion of Masters then could be very adequately described by a shrug.
In the following years, the few times I shopped at Masters was because of proximity, as opposed to any other consideration. Yes, some items were marginally cheaper, yes, the staff were a little more available than at Bunnings, but overall, it just never had anything that would differentiate it enough for me to want to shop there.
Bunnings, on the other hand was familiar and comfortable, like a well broken in pair of old boots.
In the end, my assessment is that Woolworths had implemented this market entry as a purely tactical move, without much of a strategic competitive foresight, solely relying on their own retail experience and their American partner’s hardware expertise. But that could never have worked.
You can’t just be good at either tactics or strategy – you have to be good at both, or you’ll lose the war. Look at Aldi – they’re still swinging, and doing a good job of it, too.