Published On: Wed, Jan 14th, 2015

Driving the post-recession market

As we put the recession behind us Andy Ball, Managing Director of glazing and construction marketing specialists Balls2 Marketing, looks at why sales opportunities are different now

Andy BallLatest reports show volumes are up in the window industry. At last the recession is behind us. But the fallout from this recession has been very different from previous ones. In the past it was all about hunkering down and getting through it. This recession was far deeper and longer. Individual consumers were less affected with cash in the bank, but their attitude to spending changed massively. Gone were the heady days of buying everything on credit, the bank crisis made us think twice and we became more sensible with our cash. This really shows in our supermarket spend. It’s always a good barometer for buying habits and in past downturns we saw Tesco and Sainsbury’s introducing their value and basics ranges. This time we saw the stratospheric rise of Aldi and Lidl. Consumers wanted value for money on everyday things. And they weren’t apologetic about choosing the cheapest. These bargains were discussed as a badge of honour. As we moved our weekly grocery spend to these cheaper retailers we began spending more on little luxuries.

In our industry we saw consumers wait longer to replace windows and doors. If they didn’t need doing they could wait. But for things they really wanted consumers were willing to spend more. We saw a big rise in bi-fold and sliding doors. Standard small conservatories lost out to larger more luxurious orangeries and glazed extensions. Fewer were installed, but those that were commanded higher prices. Sales of replacement windows and doors were affected worst and margins squeezed for many installation companies In the last year we’ve seen the market get busier. But many installers we’ve spoken to have yet to increase their margins. Taking control of the new market will bring real benefits to companies. But how many of us have adapted our businesses to take advantage of the changed market? BMW car sales is a good example of how to maintain brand integrity and change to take advantage of the shift in consumer behaviour. After a sharp dip in car sales in 2008, the UK became one of the strongest European markets for BMW throughout the recession. It expanded its range of cars by introducing three new small models to access a wider audience. And, at the same time it added the i8, a top of the range hybrid supercar with a starting price of £95,000. The success of this new car is phenomenal. In the first two weeks of its launch the BMW showroom in Park Lane sold out of cars after taking 170 orders. And in Google Trends a new high was recorded for the search term BMW during these two weeks.

The business model BMW adopted was to widen its audience. Adding products to the top and bottom of the range meant that almost anyone looking for a car could buy a BMW. And because they have something for everyone they don’t have to compromise profit margins because there’s something for every price range. People aspire to BMW because they see a value in the brand. This model works in the window industry too. Businesses that are expanding their range of products, options and upgrades should think about the value of their brands and the product brands they supply. Understanding what’s good about their company and products makes it easier to price higher. Consumers expect to pay more for added value products and the growth in specialist products such as large span doors and heritage windows offer opportunities to increase margins. We know demand for double glazing is up. Google trends showed a 17 percent increase in the search term during the week 2-8 November 2014. Now is the time to act.