UK installer more often hired to install products bought by the end users
Internet and e-commerce have been a serious driver for changes in the way business operates. Professionals from different sectors of the construction industry claim that end users are getting more informed about products and possibilities in the market. They also do not hesitate to buy products themselves and hire an installer just to do the installation of the products. This has important consequences for the business models of the installers and their way of making money. As a part of the European Mechanical Installation Monitor, in Q3 2020 we focused on the decision making power of HVAC installers in Europe.
Almost 60% of the installers in the UK deal with requests for installation jobs of products bought by the end consumers
In the UK it seems to be quite popular among the installers to be called for the installation of a product bought by the end consumer. Not only the share of installers who get such requests is the highest of all countries (57%), but also the share of projects in which this happens is the highest (20%). This practice is more common for the smaller installation companies in the UK (up to 4 employees). 26% of the projects they work on are for homeowners who have already made the product choice and have purchased the product.
Opposite to the UK installers, the lowest share of installers reporting to be hired for Do-it-for-me jobs can be found in Germany (38%) and such projects represent on average about 10% of their assignments.
In almost all countries, sanitary ware and sanitary ceramic products are the products most commonly bought by the end consumers
The common picture in almost all markets is that the products which the end users buy themselves are related to sanitary installations: sanitary ware and sanitary ceramic products. For those products aesthetics play a bigger role and they are also much easier to choose because they are less technical than the heating and cooling appliances for example.
It is, however, interesting to see that boilers, radiators and air conditioning products, and in some countries pipes, pumps for waste water and smart thermostats, are also among the product categories bought by the end consumers.
In some countries, installers clearly see an increase in the decision-making power of the end users
This is the case in the Netherlands, France and Germany, where more installers saw that in the last years end users have become more involved in the decision making around HVAC products and brands.
Next to that, the end users also have more power in negotiating the product prices with the installers, which is mainly due to the increasing transparency of the prices on the Internet. For the Dutch and Belgian installers this is a very common practice – 70% of them experience that and it is relevant in more than a third of their projects.
Our research shows that end users are gaining decision-making power and installers are forced to be more transparent about their prices. Furthermore, we see consumers buying installation products themselves and only hiring installers for the installation. While for sanitary ware this is not something new as these products have a very strong aesthetical value, a key question to answer is whether this will also become more common for other installation products like boilers for example. Installers typically make a good margin on these products and due to the availability of these products online, consumers now have the opportunity to check the prices and possibly even buy these products themselves.
But will this become common practice? Most probably not, and the main reason for that is the huge workload of the installers and severe labour shortage in the HVAC market in Northern Europe. This means that installers can be picky about what assignments they want to take. If end users buy their own boilers, installers might simply refuse the job. That being said, we believe the transparency in the prices will have consequences for the margins on the installation products, and installers will more often need to accept to sell them with lower margins. This might be offset by installers charging more for the installation.
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