In a press release issued by Business Pilot this week, they report that leads for new windows and doors are down 12% in October compared to the previous month.
In recent months it has been noticeable that the tone of the conversation has changed. So is this the start of a more protracted decline and slowdown? Is there something more dramatic on the way?
Either way, the industry should be acting now, rather than reacting later.
A gentle slope or a cliff edge?
A 12% decline I would describe is a bit more than a gentle slope downwards. A few more months of 12% declines in leads would result in a quite dramatic drop from where we would have been in mid-2021 and before.
At the NFA Winners Event on Saturday I was canvassing opinions from various members of the crowd that were there and I did notice a stark change in the predictions of many. Many told me they were expecting the bubble to burst sooner rather than later. I suspect they already see signs of the changing landscape for the sector.
They also told me that, as is always the case, the bigger the boom, the bigger the bust. And the past 18 months have seen one hell of a boom. Something which we’re not likely to see again for a very long time. History generally tells us that a slowdown is rarely slow and controlled. They’re more like stuttering, jagged falls.
My concern, as it has been all year, and something that I have been warning about for much of 2021, is that inflation is one of the biggest economic risks to us all. Our industry, along with most of the construction sector, has seen material prices rises 30-40% or even more. The prices homeowners and end-users of our products pay is a lot more this year than it was in 2020 and 2019. At some point, this rapid rise in inflation begins to have an effect, which it may well be doing now.
In the wider economy, food, fuel, gas, electricity, labour and pretty much every other thing possible to buy has risen sharply in price too. This hits the spending power of the public, and more often than not, it is big-ticket items that get put back. New windows and doors are firmly included in that category.
My inflation warnings are now coming home to roost. It does appear as though people are becoming warier about spending larger sums, and with Christmas coming up the usual seasonal slowdown may hit harder this year than normal. I am quite certain that 2022 is going to feel very different to 2021.
So what should the industry be doing now?
It’s time to increase marketing
As is mentioned in the Business Pilot article, the industry must now turn to increase the number of leads it generates.
My concern here is that the industry has tried to grow and expand to be able to meet much higher demand. Companies have hired extra staff where they can, many have given significant pay rises to their staff, and input costs are way higher than they were. All of this means that the amount of revenue required to sustain our sector is much higher than it was two years ago.
The right thing to do is indeed to seek to create new leads. But to try and attempt to do this in November, December and January is going to be a hard task. The inclement weather doesn’t exactly encourage people out of their homes. Christmas takes up much of the priority on spending. January is the month where spending is reigned in as the public recovers from Christmas.
As a result, I think the height of Winter could be very tough for the sector. But, that doesn’t mean we should shirk away from generating leads.
Our industry is going to be competing harder against other sectors for what spendable income remains with the public. It means we have to try harder to get our USPs across and convince people that new windows and doors are a vital investment in their homes.
We also have to remember that it’s all about the sales pipeline. Leads generated now may not become orders for days or weeks, some even months. But the more leads generated, the longer the pipeline goes. And consider that many installers are sat on three or four months of pre-scheduled work already. It means that even if Winter is hard, there is enough work coming in to last until March, by which point you would hope that business activity would be pretty brisk.
The next few months will be a case of wait and see to discover whether this slowdown is gentle deflation or an abrupt halt. Either way, our industry has to get back into marketing mode now and create the leads that will benefit the sector further down the line.
To get weekly updates from DGB sent to your inbox, enter your email address in the space below to subscribe:
By subscribing you agree to DGB sending you weekly email updates with all published content on this website, as well as any major updates to the services being run on DGB. Your data is never passed on to third parties or used by external advertising companies. Your data is protected and stored on secure servers run by Fivenines UK Ltd.