Check out this extract of a comment Hugh Bessant left on my post; “Has The Industry Lost It’s Focus” published last week:
Glazing is a mature market. In mature markets, new product development strives to find differentiation, because that is the route to better margins. And that gets harder the more mature a market is…and in construction, unless you invent a new type of house, you are also always imitating tradition.
Hence UPVC tries to look like timber, hence composite products, hence solid roofs. Hence triple glazing. Everyone is looking for the new thing to sell, not necessarily satisfying customer need. (Sometimes people get lucky and manage both!).
Couldn’t have put that better myself!
A very mature market?
There’s no doubting that the glazing market is at a very mature stage right now. Most homes have double glazing of some kind. Most have a PVCu door. The market is having to reinvent itself to create new revenue streams to stave off a drop in business. But does the pace of new product diversification give a hint as to the maturity of the market?
In terms of new products and innovations, this is perhaps the busiest the industry has been. Research and development department have certainly been worth their value in recent years. But as Hugh explains in his comment, new products are created to discover new revenue streams when the existing ones are running low. So, when you look at the large number of new products that have been launched and about to be launched, does that indicate the maturity of the market?
If so, then its safe to say that the market could qualify for a state pension. No one is talking about shiny white windows any more. Instead its timber alternative PVCu, aluminium in the residential market, hybrid windows, triple glazing, new and exciting wood grain colours and finishes, composite doors, bi-folding doors and so on. There hasn’t really been a development in plain white windows in recent years because that portion of the market has reached a peak and moved way beyond it.
An eventual settling
The industry is going through a massive period of change right now. It is trying a whole range of new ideas to discover the next path to major revenues and profits. Some will work very well. Some will do OK and be around for a little while. Some will fail quickly and disappear out of sight.
It won’t last forever. It can’t. At some point manufacturers will eventually have to stop racing each other to the top of the never ending mountain. It’s too expensive, and home owners can only take in a certain number of new products before minds are blown and confusion reigns supreme. Installers are already bogged down in a sea of information and new products, imagine what it’s like for home owners doing their research online.
I don’t think it’s going to end all that soon. I reckon there is still a good two to three years of frantic product development before things start to clam down a little bit. It’s going to take that bit longer for the industry to find out where the new solid revenue streams lie. Only then, when new streams have been established, will a natural order return to the industry – if there ever was one.
There are interesting times ahead. A few diamonds in the rough to find, and a very mature glazing market in need of a shot in the arm.