Is the window and door market splitting into high- and low-end segments, with little in between?

John G. Swanson
September 26, 2007

The Talk, Page 2...

Survey Results for 09/26/2007:

Is the window and door market splitting into high- and low-end segments, with little in between?

Yes, and we're targeting the upscale segment.





No, we see the middle segment doing just fine.





Yes, and we're focused on the low-cost/good-design approach.





Last week, I reported about a talk by Paul Leinberger, a marketing and branding guru, made at a recent forum gathering engineers at Pella Corp. Pointing to the declining fortunes of companies like Sears and J.C. Penney, he said the mid-range market is eroding. Consumers are increasingly looking upscale, to retailers like William-Sonoma. At the same time, they’re looking low-end too. Well, not exactly. More specifically, he said, they are flocking to stores that deliver both low cost and good design—pointing to the success of Target.

Leinberger’s discussion inspired us to ask if the same trend is apparent in the window and door market, and, according to our results, it is. The majority of respondents said yes, our market is splitting and their companies are increasingly targeting the higher end.

One long-time player in the high-end market, Chris Schamer, director of sales at Quantum Windows, confirms these results, reporting that he’s seeing more competition. “Our company has always targeted the very ‘up-scale’ market,” he writes. “We are seeing obvious signs that previous commodity manufacturers are reaching into the high-end market to grab a piece of the pie. This additional competition has driven us to innovate in terms of both product and service. Recent changes in our approach to service and communication with our customers has provided positive results and we will continue to make improvements in that regard.”

Looking again at our poll results, we also had a small group of respondents who said, yes, they see the market splitting—Leinberger used the word bifurcating, I recall—and they were focusing on the low-cost, good design approach.

Given the number of stray comments I hear about the “race to zero” and someone else’s “cheap” product, not to mention the window and door advertising I see and hear on occasion, I thought that percentage was too low. My first reaction was that only a few people want to admit, even in an anonymous poll, that their company focuses on low-cost products.

Yes, there are a handful of companies where that’s the mission. And, by the way, there should be no shame in producing good, basic products that meet the needs of a lot of people. But most of us like to think our products are better than the guy down the road, and even if we have to offer some “value-priced” lines, that’s not where we aspire to be.

About a third of respondents indicated they see the middle market doing just fine. Our response option didn’t require them to say whether their companies were active in the segment, but one can presume that’s the case for many. It’s good to hear, and while I do think more companies are specifically targeting upscale customers, it doesn’t necessarily contradict Leinberger’s comments.

While discussing the success of Target, he also noted that the retailer is really not all that low-end. Other stores, notably Wal-Mart, have lower prices and put more emphasis on pricing in their marketing. Target and many other big marketers, the consultant suggested, haven’t abandoned the middle, they just don’t pitch to it. The pitch instead is to the “smart” and “savvy” shopper. It’s a mix of marketing with flair, some designer flair in the product line and reasonable prices.

I’m not sure where I fall on all this. I’ve heard academics and talking heads on TV talk about the disappearance of the middle class, and I do see signs here and there that suggest to me that marketers and manufacturers in general and in our industry are giving up on the middle. But then, of course, there’s a part of me that thinks everyone just continues to raise the bar on everything and going “upscale” is just a natural progression and a bit of marketing spin.

I thought I would conclude by passing on the comments from one industry skeptic I heard from on this possible trend. “In the past, in all types of markets, we have heard the prognostication of death to the mid-range products,” says Sam Lewis of Homeshield. “It has yet to happen. There will always be a place for ‘good, better, best.’ The thing to remember is that with advancing technology and innovation, yesterday’s ‘best’ becomes today’s ‘better.’ The average American today lives with more conveniences and can afford better products than the Queen of England could have purchased a mere 20 years ago.”