More Insights on 2012

 

 

 

 

Brian Miller

 

ProVia

 

Sugarcreek, Ohio

 

 

 As Window & Door prepared its annual forecast issue, industry executives shared their thoughts and predictions for the coming year in much more depth than could be gathered together in one article. In "More Insights on 2012," we present their detailed answers to questions about the coming year.

 

First, let’s start with the most general question for a forecast piece. What do you expect 2012? Will 2012 finally be “the year” we start seeing some turnaround, or is recovery further off than that?

I think for 2012 we’ll see some nice upticks in retrofit/replacement market. I’m still skeptical there will be any breakout for new construction in 2012. It’s going to be several years off. It’ll be a slow, gradual uptick.

About 80 percent of our business is for remodeling/replacement. We offer a high level of customization that plays nice in that market. We’re used in new construction and we’re a great fit for that, but our product and capabilities cater more to the R/R market.

What do you expect the biggest challenges for the industry will be in 2012?

I think beyond simply dealing with sluggish market, if manufacturers want their products to be Energy Star qualified and they haven’t started working toward 2013 requirements, they are going to be hustling.

I think that’s one of the largest obstacles in many manufacturers’ lives in 2012. We feel strongly with our products that we’ve got some work to do, but it’s not insurmountable. The percentage of our products we want to qualify will qualify.

What will new construction look like in 2012?

I think that there are some pockets of new construction that will improve faster. Many of our products make it into high-end homes. I think the high-end market will pick up faster than the mid-range market.

I tend to use the stock market as a leading indicator of what housing in general is going to do so if we continue to see growth/upticks in stock market, quarter after quarter, we may see that in housing. If it starts to fall off again, it could be a leading indicator trouble ahead.

What about remodeling/replacement work? What is likely to drive business in this segment?

Many of our consumers purchasing products are writing a check, but a significant number are borrowing to get that work done. I see that as a major obstacle. If credit doesn’t ease up, that’s a problem. Interest rates are going to stay low, so if credit eases up and if employment improves, then you’ll see a turn around.

Even an employed person can be impacted by unemployment numbers because it just spooks them. It’s a key number. You rarely see underemployment figures quoted, but there are a lot of people who had six-figure salaries who are now working for $70,000 who don’t feel they have much wealth.

What’s going to be happening with energy efficiency in the coming year? Is the industry focus on ramped-up Energy Star requirements? Are retail channels gaining traction with “whole home performance” efforts? Is the industry chasing triple panes and other means of better energy performance numbers?

I think more and more homeowners will begin looking at their house as a whole unit rather than individual components. They want to know what their energy scorecard is and how they can improve that.

I personally think that the Energy Star brand has become diluted. There’s a blue [Energy Star] label on just about everything. If you take blue label off a third of those products, that doesn’t impact a consumer as much as if they walked down the aisle and saw an Energy Star gold label on some products. I think they’re taking the wrong angle. If the gold only appears like the blue did originally—on select products—you’re going to get awareness.

On a (hopefully) positive note, do you see any particular product segments or geographic regions outperforming the industry as a whole?

We’re certainly seeing rapid growth in our Signet fiberglass doors. What we’re not seeing is that it’s cannibalizing the steel doors. But the popularity of the real wood look has caught on.

The high-level customization … that we make available to our customers and homeowners  goes an incredibly long way. Whether it’s colors or stains or being able to do one side a style of door panel and the other side a diff style—those things are definitely strong [differentiators] for us. Because of the companies and products we’ve added, we have the ability to create collections around color design and style design. We’re making it simple for homeowners. Maybe they like a particular stone or color, we can give them professional tips on what color siding or doors will fit with that stone color. That’s something we’re looking forward to building a lot.

I also think storm doors have gotten a bum rap. We continue to modify and increase the perceived value of what they are. A true storm door puts on an extra layer of security and weatherization, and it also gives instant light, instant venting.

How much of an impact does lending (or lack thereof) have on the business? The National Association of Home Builders is making financing-related discussions one of its top priorities this year—are they on the mark?

I do think it’s an issue. The attention that’s being given to it is necessary. The money is there. The rates are there. It’s a matter of loosening it up.

For those who are buying, what window and door products are they selecting? What features are important?

I think it’s important to talk about service. Consumers are very thirsty for companies that actually take care of the details. It’s been several years here where people putting off large purchases. They don’t want to wait another month to put in that door. Lead times are important. I think people think, as bad as things are, why aren’t companies waiting by the phone to take my call?

Some companies have hurt themselves by shrinking their sales, marketing and customer service departments. People want to be cared for and want to be served.

Do you have anything else to add?

I feel like our customers have been extremely resilient. They’ve worked incredibly hard. Anybody in the business knows it’s like walking through mud. They’ve hung in there and done so well for us. They show the product, they do the installs. And in many ways they’re an extension of us. For the strong ones, they’ve found a lot of opportunity in today’s market and gotten stronger.
Overall, we feel like there’s a lot of opportunity coming our way and we’re extremely anxious to see what’s coming around the corner.
 

Window & Door's "More Insights on 2012" also features questions and answers about the coming year from the following people: