The recent Palmer Market Research report published last month didn’t really paint a rosey picture for the window industry in the coming three years or so. They did say that 2016 was a year in which the window industry outperformed expectations however, something which based on anecdotal evidence I can agree with.
The news after 2016 however wasn’t great. PMR expects a contraction of a rather sharp 4% this year, 2% next year and then a return to moderate growth by 2020. After steady year on year growth since the recession, a 4% contraction this year would be quite a stark reversal of fortunes.
I have to admit, the noises coming out of the industry in certain parts do echo these predictions. Especially in the volume and “value” parts of our market.
So, if there is to be a slowdown in the window and doors industry for the next few years, we have to start making preparations now. It may not be as bad as the Great Recession, but slowdowns bring risks, and preparations now save pain in the future.
Step up marketing
At the sign of things going south, it is often tempting to start to reign in spending on certain things. Marketing and advertising is often on that list, although it is perhaps the one thing at this time that should be being stepped up.
If the window industry is about to contracting, the best thing any forward thinking business can do is to start promoting a strong, outward facing image. This is also the time where many businesses, such as fabricators and installers, will be assessing their spending and who they’re spending with. It’s an ideal time to capture new business when it is up for grabs.
It is also a time for more aggressive companies to steal more market share. In any slowdown there are always companies who start to lose some level of market share as sales start to dip. The more dynamic businesses in our industry should be using this time to become far more aggressive and direct when it comes to marketing to capture new market share where others have been slow to react.
Increased marketing during a slowdown also helps to project a positive image around a company. During tougher times it is easy for things to look more negative than what they sometimes are. Proactive marketing helps to stave that negative image off.
Become more efficient
It might sound obvious, but right now is the time to be looking at how our businesses are run. If PMR data is correct, the slowdown has already begun. If so, then the window industry and it’s companies already need to be looking at ways to make the running of their companies more efficient than they already are and to protect profit margins.
This is going to be a hard balance to find, as many SME’s in this sector are actually growing and plenty are finding skilled labour difficult to come by as they look to continue their growth stories.
For the largest companies in our industry who may already be on a rocky path, staffing levels might be one area to look at, although certainly not ideal.
Technology has a role to play here as well. As an industry we should all be looking at ways to use the tech that is out there to help make running our companies easier, faster, more efficient and more profitable. That may involved some initial investment at the beginning. But if that investment results in better margins and better efficiency, then it’s worth paying.
There is a ton of new products for fabricators and installers to dig their teeth into these days. Aluminium has exploded back onto the scene. Vertical sliders are back in vogue. Bi-fold doors remain very popular. The timber alternative area is booming. There remains plenty of niche areas of our industry that despite the gloomy outlook look set to perform well.
It is these areas that companies need to be exploiting now and in a big way, before the bandwagons get too full. One of the things we did well as an industry when the last recession hit was we diversified rapidly and quickly in a bid to get the cogs of the industry moving again.
Our industry has changed a lot in ten years, and the products that were once popular are quickly falling out of favour with home owners. In order to tough out the next couple of years and to try to extract as much growth as possible, we all have to embrace the wealth of new products at our disposal and really give compelling reasons for home owners to continue to invest good money in their homes and properties.
As Brexit continues to weigh on concerns, domestic growth stagnates and spending power starts to be squeezed, we’re going to have to work even harder to maintain a growth market that makes any sort of decent profit margin.