News Insight Data suggests new routes to market 12 December 2013 For more information, visit: www.insightdata.co.uk The latest market report published by Insight Data highlights changes across the industry, in particular the growth of trade counters and increase in general builders now competing with window, door and conservatory installers. The report uses data collated during extensive telephone research and interviews carried out with 15,137 fabricators and installers on the Insight database, along with data from the Insight Local Builders database. The report shows the number of fabricators and installers has increased overall in the last twelve months, although the number of PVC-U fabricators has continued to decline. However, it is the continued growth of trade counter depots that provides interesting reading, highlighting a big change across the industry. Growing network Helen Costeloe-Hughes, commercial director of Insight Data, said: “A shift in distribution channels is now happening. The traditional route of fabricator, to installer, to homeowner is being challenged by a growing network of trade counters. “A growing number of specialist operators who neither fabricate nor install have sprung up in recent years. These businesses buy in products in volume from a fabricator, and sell on to small installers, DIY and builders through the depot. “What is interesting is the growing number of larger PVC-U fabricators who are now establishing their own network of trade counters. This provides a strong regional presence and enables the fabricator to capture volume they would not otherwise gain. On the flipside this poses a threat to smaller, regional fabricators who rely on local business.” The rise in trade counter depots also explains the increase in activity among general builders. According to the Insight Local Builders database, some 20,000 builders are active in home improvements, extensions or small new builds, all of which require windows and doors. Local builders often have an established relationship with the homeowner, or have been recommended, and as a result are winning business under the radar. Window companies may not even be getting the opportunity to quote for these jobs. With the increase in trade counter depots, builders now have access to more suppliers, a wider product range and better prices and can compete with some traditional double glazing installers. Diversification The Insight Report also points to product diversity. 283 PVC-U fabricators now manufacture aluminium windows and doors and this number is rising. This has been driven by demand for aluminium bi-folding doors and this in turn is creating awareness and demand for aluminium windows and doors in general among installers and homeowners. 47% of installers now offer more than one material choice (PVC-U, aluminium or timber) while more installers are introducing higher value, better margin products in a bid to differentiate from competitors selling on price alone. While it may be assumed that all PVC-U door installers are offering composite doors, this has not been the case, with some installers taking a cautious approach due to historical problems experienced with some products. However the last year has seen a surge in PVCU companies now offering composite doors, rising to 7,835 firms representing 72% of PVC-U window/door installers. Another significant change is the rise in companies offering more than one composite door product. In fact, 639 installers now offer a choice of composite door suppliers/products, a number that is increasing rapidly. Conclusions While the industry appears fairly buoyant, several trends have emerged from this year’s Insight market report, including: • Reduction in the number of PVC-U fabricators. • Diversification of materials being manufactured by fabricators. • Route to market (distribution channels). • Installer diversification in products and materials. • Installer diversification into other home improvement sectors. • Rapid increase in local builders now offering windows and doors. • The rise of the trade counter depot. As a result, the rate of change within the Insight Database is at its highest ever level. Across the fabricator and installer database there are now some 1,300 changes occurring every month – companies, management, locations, contact details, products and sectors. Over the last six months 60% of companies on the database have experienced some change in their business. Meanwhile, over 20,000 local builders on the Insight builder’s database are working on projects that would involve windows, doors or conservatories. There are now, effectively, 33,000 companies installing windows, doors and conservatories in the UK.
GGP December 2013
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