What are the long-term implications of Covid-19 for the industry?
When we emerge from this crisis, the world will be different. When things ‘get back to normal’, it will be a new normal.
The crisis will accelerate polarisation between the top and bottom, the added-value premium and the rest of the market, because those buying premium will be less affected by economic downturn.
Younger, lower income households will be hit harder. You can only spend, save or borrow if you have some disposable income.
Short of a full financial meltdown, the ‘Haves’ will still have money and the inclination to spend on their properties - and despite everything, their numbers will continue to grow. Even if house prices fall in the short term they are falling from a very high base. The Haves already HAVE their money, and will have when the crisis is over. And they want to continue upgrading their homes and enjoying them.
That’s good news for fabricators and installers selling premium product in the upper third of the market, but competition will be a lot tougher everywhere.
Fabricators and installers will need a sharper competitive edge and they’ll have to adapt to survive – some are already doing so. They're moving to remote selling, and selling more professionally. Those who haven't embraced colour will have to, quickly. The trend to colour has been very strong, but after the coronavirus people will want their spirits lifting, and a brighter Britain.
They’ll have to choose their suppliers carefully. If we learned one thing from the coronavirus crisis: it's the importance of supply chains. In a recent FMB survey of small builders and tradesmen 80% of those who stopped work said they had to because their supplier couldn’t provide them with products or materials. Every link in the chain has to work.
That recognition has been key to our own thinking. Deceuninck’s foundations are built on giving customers beautiful windows and doors and the service and support to sell at the top end of the market. They’ll be in a strong position when normal business resumes. Our vast warehouse is kept stocked to the brim with profile and colour because ‘A bird in the hand is worth two in the bush’, as the old saying goes. That’s something the NHS and people in the front line have learned in this crisis: product made in Britain, and safely in a warehouse in Britain, is worth two products made to order or supplied from far-away places! This ‘make for stock, not make to order’ policy underpins our strategy of helping customers sell more. I believe it’s the edge fabricators and installers need in a more competitive post-Covid market - see our latest video here.
The industry will face a tough few years but the UK economy has a track record of strong recovery after recessions. I’m confident if we work together, there will be better times.
Managing Director, Deceuninck