Brand review DIY stores: fierce competition with frontrunners Gamma and Praxis and even IKEA and Bol.com join in

Brandreview provides strategic insight into brand positions in consumers’ minds. Every month, Validators takes a closer look at a different industry. It’s summertime, so it’s time for vacations or home improvement projects—which is why we’ve chosen to focus on (online) home improvement stores. The travel sector was examined in late 2022; see the article here. We mapped out the mental market positions of the 12 most frequently mentioned home improvement store brands.

Brandreview is part of the Consumer Behavior Monitor, initiative of Validators and VU Amsterdam to measure the effect of a crisis on consumer behavior since 2020. In this article you will read the main outcomes of the mental market positions in the category (online) DIY stores.

15 reasons for choosing hardware store: price and close to leader

The purpose of research is to identify consumer needs and perspective. By starting with the consumer (and not the brand), you get to identify what is really relevant to the target audience. What do consumers base their choices on when buying from hardware stores? Validators came up with 15 key needs(Category Entry Points) for choosing (online) hardware stores. (Online) DIY stores are defined as stores that primarily sell do-it-yourself products for DIY and decorating for home and garden.

The most relevant reason in consumers' choice of a hardware store is "good price" (87%). Consumers choose their DIY store largely on price followed by close to home (83%). We call these high scores 'hygiene factors' and on these a brand would not want to lose too much share. Winner is Gamma which gains 3% share in price among Gamma's non-buyers, while Praxis loses among its non-buyers market with -1%. There are opportunities for brand growth especially among non-customers and Gamma is running away from Praxis here.

Toolstation founded in 2006 is a relative newcomer to the DIY industry. With a small share under 2%, they do particularly well in 'online stock check' and 'tools and hardware'. Karwei's campaign and positioning focusing on 'beautiful' and 'interior' is paying off and they are gaining 4% more share here. IKEA remains narrowly ahead of Karwei on this.

Figure 1: Top 2 CEPs with highest and lowest relevance among construction markets

Gamma and Praxis leaders, BOL.com and IKEA the misfits in mental market share

Within the home improvement stores category, Gamma clearly leads in both mindshare and actual market share. Gamma is closely followed by Praxis. Across the entire category, we generally see that all brands are virtually in equilibrium in terms of mindshare versus actual market share; mindshare is a predictor of actual market share. The “largest” deviation is seen for the Bol.com brand; it is purchased more often than it is considered when it comes to planning home improvement projects and furnishing the home and garden. These are spontaneous home improvement purchases driven by the brand’s physical presence.

Figure 2: Mental versus real construction market share

Yippie-Yaja-Yippie-Yippie-Yeah!

To the creative advertiser Hornbach is more thought of the brand (mental market share) than bought in the past 6 months. This may have to do with physical availability (can people buy from you). In fact, Hornbach will have 18 physical stores by 2023, which is less than most other DIY stores within this umbrella of competitors (except Bauhaus). Because of this, people may want to buy from Hornbach, but the branch is too far away, for example. In terms of sales, Hornbach appears to have a much higher market share (26.1%) than what research suggests (10%). With a very large mega DIY market, Hornbach manages to perform much better than the DIY stores in terms of sales.

What does the competition score high on?

In addition to your brand's scores on the CEPs, an important part of growing in mental market share is clearly mapping the competitive umbrella and what is happening here. On which CEPs does the competition score mentally higher or lower than your brand?

Within the DIY category, you can clearly see where the brands focus. Market leaders Gamma and Praxis mainly stand for 'offers' and 'close to home', in addition Gamma also excels when it comes to 'wide choice of paint'. Whereas Karwei, as a DIY market, has the largest market share for the CEP 'interior and home decoration', Hornbach scores particularly well on 'garden chores/decorating'. The Hubo brand mainly stands for 'professional advice'.

Karwei overclothes IKEA

Karwei's strategy has focused on a DIY store with beautiful interior and home decor. And with success because they are gaining market share and have a competitor in IKEA. Karwei has a higher network size (see Figure 3) and is more often considered in other categories. That makes Karwei to keep IKEA off its back for now, quite clever.

Figure 3: Mental reach and network size of Karwei and IKEA

Hornbach the No. 1 media sender (in ATL)

The Share of Voice (SOV) tells us how much a brand has spent on media relative to total media spend in the overall market, in this case the DIY market. Over the past three years, Hornbach accounts for as much as one-third (34%) of the total media spend within DIY stores. In terms of content message, Hornbach is targeting the need "garden jobs/furnishing" and with success; its market share is up 3%. A smart strategy from Hornbach to snatch market share from its competitors.

According to marketing law by Binet & Field, a brand grows if it invests more media than its own market share (Share of Market). The two leaders (Gamma and Praxis) invest less and Hornbach significantly more. Based on Hornbach's media (over)spending, growth in market share is therefore expected. We are curious to see where that goes.

Background Brand Review

In 2018, VU Amsterdam and Validators launched the Institute for Brand Analytics. The goal of this collaboration is to make brands steerable and market share measurable in the minds of consumers. After four years of research on over 300 brands, we arrived at a method that could measure the strength of brands and make predictions about market share. Starting in August, a specific industry will run each month as part of the Consumer Behavior Monitor. First, an online qualitative preliminary survey tests consumer needs (CEPs) and then a Brand Review measurement.