Toys R Us, bust. Maplin, bust. New Look, closing dozens of stores and laying off 1000 employees. Prezzo pizza, closing 94 stores. Jamie’s Pizza and Byron Burger both going into CVAs. Life on the high street is extremely tough right now. We all remember the battering it took during and after the Great Recession a decade ago.
The one thing that continued to grow with extreme aggression since then has been the power and influence of the internet. Look at the likes of Amazon, Netflix, Facebook, Uber, Google and many others. These are companies that have used the growing popularity of the online world to turn themselves into absolute giants. It can also be argued that if they had not based their businesses around the internet, they wouldn’t exist.
There are lessons for the window and door industry to learn here.
Adapt or die
I’m not suggesting that window and door companies move to a totally online world, that simply wouldn’t work with the types of companies we run. Rather, companies in our industry must learn to adapt to changing home owner habits and tastes.
Some of us are doing that. You look at the likes of Deceuninck and VEKA investing heavily to expand their colour offering to fabricators, taking advantage of the demand from home owners who want something more than White. Then you have companies like Solidor, TruFrame and others, who have invested heavily into their online software, making life easier for installers to order and home owners to design.
Generally, you find in the window and door industry that companies who spot the trends early and move, or at least move along with the times at the same pace, perform better.
There are though a number of companies who have continued to bury their heads in the sand and run their businesses in the same manner despite a changing world around them. Namely, the national installers.
Everest, Safestyle and Anglian have all had a pretty negative run of news in the past couple of years. Safestyle have seen their share price slide to less than a third of their highs. Anglian reported a £3.3m loss last year. The investors in Everest have also admitted their investment was not going well. All three companies have continued to operate in the same way. Heavy discounts, old fashioned sales tactics and volume over bespoke. And now all three companies are suffering.
This really is a period where you have to quickly adapt or die. The economy and trading environment is unforgiving. Home owners know what they want. They’re educated, well informed and won’t stand for the sorts of sales methods that have given our industry bad reputations in the past.
New business models
It’s not as if there is no answer to the problems of old business models. You just need to create new ones. You look at Toys R Us and Maplin. They never really changed or adapted to a new commercial environment. In the end, they succumbed to the online giants and the public preferring a simpler way to do business.
For the window and door industry, it’s artisan style, bespoke and higher end products that are now in much higher demand. We all know that the popularity of colour, timber alternative products, aluminium are all booming right now. Look around and you’ll find that companies all across the supply chain adapting to meet these trends are doing pretty well. Yes there will always be a demand for the shiny White stuff, but that is increasingly being cornered into a certain part of the market.
You have to start to question how long the big three will remain three. I cannot see a scenario where any of them starts to make any meaningful recovery. Anecdotal reports say that staff are jumping ship to other companies. Is the age of the super-installers over? Are we now in for a period of smaller, more agile and adaptable installers? My gut instinct says yes.
I think it is feasible that one of the big three could buy out another. Perhaps to eat up some of the market share. Perhaps to stave off the inevitable for that little bit longer. I think things are going to get a little bit interesting in this part of our world in the coming months.
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