THE MARKETPLACE FOR
HEATING AND HOT WATER
HAS NOW CHANGED
– TIME FOR THE INDUSTRY
TO MAKE CHOICES
TONY GITTINGS OF RINNAI LOOKS AT THE CHANGES THAT HAVE NOW BECOME A PERMANENT
AND DEVELOPING PART OF THE DOMESTIC HEATING AND HOT WATER MARKETPLACE –
SELLING DIRECT TO THE CONSUMER, BYPASSING THE TRADITIONAL SUPPLY ROUTE
There is a 15 second iPhone video clip on Twitter at the moment
of a big lad, full of muscles, destroying a door inside a building. It
takes him two punches, one kick and both his hands to wrench the
door right off its hinges. Accompanying this is some very stark copy
which talks about how he’d had a job booked in to install a boiler,
but he had lost out on price to one of the big, direct-to-consumer
online brand names. His fury carries over from the film to the text
with some very explicit language.
The change in the domestic heating and hot water marketplace is
that online buying is now taking over the supply chain. The boiler
manufacturers, some of them, want to sell more and more direct
to the consumer. It is as simple as that. The traditional route to
market of: manufacturer -merchant/distributor – installer-end
user/consumer is getting to be less and less and may well soon be
gone. The new route to market may well have some casualties –
the merchants/ distributors and installers. It may well hit installers
hardest in terms of prices being driven down.
Boiler producers have traditionally made their margin at the factory
gate. – The merchant/distributor may never of made the size of
margins, on boilers, anywhere near as much as the manufacturers.
Traditionally the merchants/distributors relied on the branded
boilers to bring the installer into their sales arena and buy all the
materials for an installation and make up the margins on fittings,
piping and ancillaries.