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.
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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.
The fact that life is online now, and
that almost all household expenditure
goes through the web, is now cast in
stone, for time being anyway. The
change in consumer spending can be
summed up by the following reports>
The BBC News website and the Retail
Gazette recently extensive articles
and reports on the dramatic demise of
shopping centres and malls. Dead or
dying High Streets, zombie retailing
– the clichés were wonderfully
employed.