Astute market targeting critical for installers
Astute market targeting will be critical for installers in 2023/24, as concluded by the latest report from Mintel on the UK residential window and door market. Mintel presents several interesting observations in its analysis that enhance our understanding of current market conditions. The report concludes that, in light of the ongoing market turbulence, the rising energy prices are expected to shift consumers’ focus towards energy efficiency. This trend is further strengthened by individuals’ growing concern regarding climate change. Consequently, there is a favourable opportunity to replace ineffective double-glazing units with triple-glazed alternatives, similar to the growth experienced by the double-glazing market during the 1970s energy crisis. However, it’s worth noting that the primary responsibility for driving this initiative lies with the industry, as the government’s current emphasis is on alternative energy efficiency products, which have yielded mixed results.
The two major takeaways from this report are the comparison with the energy crisis of the 1970s and the fact that the responsibility for driving the initiative to replace ineffective double-glazed windows primarily rests with the industry. It’s important to consider the significance of the housing market as well. Hamish McRae, writing in the i newspaper, believes that despite the rise in interest rates, the housing market remains strong. The rate rise is a market correction from unusually low rates, and the current rates are expected to remain relatively stable for a generation, impacting affordability and influencing homeowners’ purchasing decisions. Supply continues to be constrained while demand remains relatively stable as people seek to secure a home for a longer duration. This desire to own the same property for an extended period has significant implications for the home improvement sector. During inflationary times, a house is a tangible asset and, for mortgage buyers, a form of forced savings. McRae believes that owning the same property for a longer period, viewing it as an asset, and potentially owning a smaller house than originally anticipated are all key drivers influencing long-term home improvement decisions.
As Mintel highlighted, astute market targeting will be crucial for installers. Additionally, it is vital to fully understand the complexities of homeowners’ purchasing decisions. Barclays is targeting the energy-efficient home improvement market with a Greener Home Reward program and has released some revealing research about the fenestration sector. This research has unveiled several misconceptions surrounding the cost and inconvenience of installing energy efficiency-related modifications, which have been holding homeowners back from making retrofitting upgrades to their homes. The Barclays study found that respondents significantly overestimated the cost of A-rated double/triple-glazed windows, predicting it to be a third (33 percent) higher than the average actual cost (£8,166 estimated vs. £6,125 actual). Homeowners also believed that A-rated double or triple-glazed windows took over 22 percent longer to install than they actually do. The major positive finding is that nearly half (47 percent) of homeowners agreed they are willing to pay a premium for properties that have already undergone key energy efficiency-related retrofitting modifications.
Addressing these misconceptions is crucial and aligns well with the need for installers to conduct astute market targeting. Essentially, the cost of windows won’t be as high as anticipated, the installation time will be shorter than expected, and the property will become more attractive to potential buyers if one decides to sell. There is no doubt that the market will be challenging over the next 12 months, but there are pockets of opportunity. Customer service is also under the spotlight, particularly for suppliers of components, trade windows, and doors. In a recent conversation I had with an employee of a trade fabricator, it was evident that the supplier failed to meet the installers’ expected levels of service, causing these installers to purchase their frames elsewhere where they received superior customer service. They never returned to their previous supplier. While we face a challenging market, by understanding our customers and delivering top-notch customer service, we increase our chances of effectively tackling these challenges.”
John Cowie – Editor
E: john.cowie@windowsactive.co.uk
