Times are changing. Again.
The past two years have been perhaps some of the best business our industry has ever done in decades. The pandemic and lockdowns brewed a perfect trading environment as far as our sector was concerned. A severely limited economy where our industry found itself as one of the few that were able to operate, whilst many other parts were restricted or closed altogether.
The result was vastly increased consumer spending on home improvements, with the public switching how they spend their money, refunded holidays and furlough cash. For the UK window and door industry, in times of such uncertainty and hardship, the last two years have been a sort of golden age.
One can never look at times gone by in the world of business, however. It is now time to assess the here and now, and that picture looks very different to 2020 and 2021.
The backdrop against which our industry operates looks very different now to the last two years. The rebound around the world has sent inflation spiralling across the board, with the cost of pretty much everything flying north. This is now hitting the general public in the pocket very hard. With inflation in all major economies the highest in decades. In the UK, inflation has reached 6.2% in February, and this does not include any effects of the war in Ukraine. Inflation is now set to reach double-figures, and interest rates will rise throughout the year to combat it.
That rather nasty mix of surging living costs and rising rates combine to create a much more restrictive spending culture. Energy bills rose £700 on April 1st, with predictions of another steep rise in October. Food and fuel are constantly going up, with wages now lagging way behind the pace of inflation. The OBR and others have predicted the biggest hit to living standards in 70 years.
Millions of families are now having to make some hard choices about where they spend their money. The free will spending that UK fenestration has enjoyed by the middle-incomers over the last two years is about to dry up.
All that being said, there are always opportunities to exploit and revenue streams to tap. Even in the darkest days of the Great Recession in 2008/2009, there were ways to make a success from those very hard years. At our place, we knew at the end of 2021 that things were going to be different this year. We weren’t arrogant enough to think these evolving circumstances would not affect our business.
So we created a plan to try and navigate the harder times coming, and it’s working.
Change it up
At our place, we could sense at the end of last year that things were changing on the ground. The end of 2020 was relentless. The end of 2021 was rather quiet and certainly did not feel like the boom times of the previous two years. We knew the environment had changed.
There was nothing to fear, however. The imminent future was secure. We had an existing order book with months worth of fitting, which gave us breathing room to figure out where to pivot to in order to maintain the increased business we had become used to.
First, we decided we had to focus more on what we already sell more of and what was growing in popularity. For us, that meant concentrating on products such as flush sash windows, aluminium bi-folding doors and timber-alternative windows and doors. Sales of these products were already rising steadily anyway, and we knew from feedback from our clients that other companies were simply not giving homeowners choice. Flush windows, for me, have been a personal success this year. Knowing other companies in my local area are not really pushing it, by simply showing my clients the choice of flush windows gives me a hook with which to pique their interest and emotions. As a result, and without exaggeration, the last NINE deals I signed up before I left for paternity leave were all full houses of flush windows. I had my best ever month not just personally, but within the entire company for decades. By simply concentrating more energy on what we already sell good amounts of, we achieved one of our best ever months in our 41 year history. This was no fluke, but simply refining our offering and being smart enough to see where the trends are going.
The same goes for the other products I mentioned. We are now selling more aluminium windows and doors, as well as bi-folds and sliders now too. We have changed up our product portfolio and will now focus more on the higher end market. That’s not to say we weren’t high end before. In comparison to our competition, our offering was always far more premium than others. But we have taken it one step further and it is already paying dividends.
Target the right people
One of the main reasons for polishing up our product portfolio is very deliberate. It is to attract the higher earners. The ones where a crisis won’t really affect. As I thought might happen, the middle-incomers in our area have begun to slow their spending quite dramatically. However, those that haven’t are the weather bracket. The debt-free types, who perhaps own or owned their own business, who have no mortgage or young kids and have a lot more disposable income. The products we are now pushing more of, are aimed very specifically at those people.
I can tell you now, that it’s working well for us. Those with money also like to spend it. Give them a good enough reason and they will part with that cash. We have been adapting our sales methods to cater more for the wealthier demographic and the work is paying off. I have even changed my language and my approach to relationship-building to service my clients and I am finding incredible results.
After a bumper first quarter, we find ourselves with a near 5-month fitting schedule and plans to recruit additional fitting teams to bring that waiting time down. We will continue to target the higher-earning demographic as we look to execute a four-year plan which will transform our business.
It’s important to say that our business will always cater to everyone where we can. Each client gets the attention and work ethic they deserve. But there has been a very clear drop off in certain types of buyers over the last few months and we expect that trend to continue and get worse as inflation and the higher cost of living continues to bite. We as a business have to adapt to survive and have found that our predictions and planning are bearing serious fruit at the moment.
We will continue to refine our work. Become more targeted in the type of consumer that we want to deal with. Add more high-end products to our portfolio and gradually phase out some that are no longer useful to us. Although this year is going to be harder than the last two, if we can keep our focus, we think 2022 could actually be better than 2021.
Our industry knows what is coming. It has been telegraphed for months, and now it’s starting to bite. We need to be adapting and changing right now if we all want to keep the market share we have all gained these past two years. No one wants to go backwards after all the hard work we put in to make the most of the recovery in demand. Let’s be smart and aggressively exploit the opportunities that exist out there. Yes, the headlines are bad. Yes, the economy is about to hit a pretty rocky patch. But that doesn’t mean there won’t be a whole list of great moments to make the most of this year and next.
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