Why they buy where they buy
All channels of distribution are not created equal.
But what are the strengths of each channel of distribution in the mind of the contractor?
Part of the answer can be found in "Building Products Distribution 2012," a 350-page study from Malvern, Pa.-based Principia. The findings at right are excerpts from the research, which is the result of direct interviews with more than 600 professionals representing building product manufacturers, wholesalers, distributors, dealers, builders, contractors and installers to offer a full picture of an increasingly complex, $100 billion industry.
The chart at top right shows the relative importance of several key purchase motivators for the contractor — ranging from the breadth of the offering to the relationship with the supplier representative. (The relative importance of the factors are indexed on a 1 to 100 scale.)
"At the dealer level, supplier relationships are more important than ever to drive share with contractors and builders," according to Principia, repeating a time-honored concept of the lumber business. Relationships may be gaining in importance, but they’re not the leading purchase motivator in any of the channels, according to the study.
When contractors turn to manufacturers, they typically do so out of desire for breadth of assortment. When contractors turn to the big box, the leading reasons are a combination of low price and convenient location. Service delivery to the job site drives business to lumberyards.
According to Ken Jacobson, partner at Principia, recession and recovery continue to shape the data dramatically. "The industry has been challenged since the economic downturn with lower revenues, margins and inventory turns," he said. "Many smaller or weaker participants have either closed operations or been acquired. On the other hand, it’s been a case of survival of the fittest, whereby the industry has consolidated and the larger, stronger players are poised to reap huge benefits when the construction market picks up."
Principia provides the building products industry with services including strategy consulting, market research, and industry conferences and reports. VisitPrincipiaConsulting.comfor more information.
KBIS to join IBS
The International Builders’ Show was a news-making machine in products and trends. The show also created a buzz for the trade show business itself.
For instance, during the general session of the Las Vegas event, National Association of Home Builders (NAHB) CEO Jerry Howard announced a merger of IBS and the Kitchen & Bath Industry Show (KBIS).
The shows will co-locate in Las Vegas beginning in February 2014. The two events will remain separate and distinct shows held simultaneously at the Las Vegas Convention Center through 2016, creating Design and Construction Week, self-described as one of the world’s largest gatherings focused on new ideas, products and technologies to design, build and remodel homes.
"This new format allows exhibitors to reach a full range of design and construction professionals who buy, specify and influence the products that go into American homes," said NAHB chairman Barry Rutenberg, a home builder from Gainesville, Fla. "For attendees, it means access to two expansive trade show floors and hundreds of additional suppliers to meet."
"Two shows, two associations and one place to see and connect with every aspect of residential construction and remodeling," said John Morgan, NKBA 2013 president and president of Morgan Pinnacle, a manufacturer’s representative for cabinetry and technology brands.
The National Hardware Show also made news at the show, announcing and promoting an expansion into building products.
The National Hardware Show slated for May 7-9 in Las Vegas will showcase pet products, expand into farm and ranch, and turn its attention to building materials, according to show organizers.
Joining pet products with a dedicated area on the show floor of the Las Vegas Convention Center’s central hall will be Farm & Ranch. And throughout the exhibit floor, products in the building materials category will be marked with signage.
The changes are part of a continuing evolution of the show, according to organizers.
"We had a huge home run with pet last year," said Sonya Ruff Jarvis, VP attendee programs for the National Hardware Show. "And we’ve added a new dedicated area on the show floor for farm and ranch, and we’re seeing a lot of excitement for it."
Companies including Olympia Tools, Gorilla Rack, GRK Fasteners and T.W. Evans Cordage are among those in the new farm and ranch section.
Newell Rubbermaid launches a tool brand
After three years of research and development, Newell Rubbermaid has launched a new brand of tools into the heating, ventilation, air conditioning and refrigeration market.
The Hilmor line of professional-grade tools — designed to make the technician’s jobs easier and more efficient, the company said — was introduced to the trade at the International Air-Conditioning Heating and Refrigerating (AHR) Expo, held Jan. 28-30 in Dallas. This represented the first foray into HVAC/R for Newell Rubbermaid, a $6 billion company whose stable of brands also includes Irwin and Lenox tools. Hilmor will compete in the category against names like Ridgid, Fluke, Klein and Yellow Jacket.
The initial Hilmor line features 150 tools, including a thermometer with two digital readings to make the calculation of superheat and subcool easier; the industry’s first hybrid gauge offering both analog and digital displays; an aluminum manifold available in two-and four-valve combinations; and a compact bender designed to fit in the tight spaces HVAC/R technicians work in regularly. There are 10 patents pending on the line, which begins shipping in March and April — just as the air conditioning season ramps up.
"HVAC technicians are some of the most skilled tradesman and often work in the worst, most challenging situations," said Emily Bavaro, director of marketing for the Hilmor brand. "And despite all the changing regulations in the industry, the tools haven’t changed much at all."
In fact, Bavaro said that during the company’s extensive research period they discovered that some of the patents on existing HVAC/R tools date back to 1917, adding, "You would ask guys about their tools, and they’d show you tools passed down from their fathers and grandfathers. Many of them have arthritis in their thumbs, often making the outdated tools difficult to turn."
The launch of the Hilmor brand is part of Newell Rubbermaid’s Growth Game Plan, a strategy to accelerate the company’s growth into a larger, more global and more profitable company. According to Bavaro, Newel Rubbermaid has identified its tools business as a "strategic priority" for the company, which also owns brands in the commercial, writing, baby and parenting, home solutions and specialty categories.
"The buzz from the AHR Expo is that nobody has seen anything like this in HVAC for many years," she said. "It’s new, fresh and we feel it’s a game-changer in the industry."