HVACR Distributors Struggle to Keep Pace with E-Commerce Trends
The HVACR distribution sector, as a collective, trails behind other wholesaling industries in adopting e-commerce strategies. However, the significance of online sales is steadily rising as consumer behaviors evolve, particularly among younger demographics who increasingly prefer digital purchasing platforms.
This insight emerges from a recent analysis conducted by the Heating, Air-conditioning & Refrigeration Distributors International (HARDI).
In the initial half of 2024, U.S. consumers allocated an unprecedented $550 billion for online purchases, marking a notable 7.5% increase from the previous year.
The report detailed that wholesale distribution achieved an approximate annual growth rate of 7% in online sales between 2018 and 2022, with e-commerce constituting nearly one-third of all wholesale distributor sales in 2022.
Notably, “the median HARDI distributor involved in the HARDI Annual Benchmarking Survey realizes merely 4 percent of their sales through online platforms,” according to the findings. In contrast, companies like Watsco Inc., which derive over 30% of their revenue from online sales, exemplify the potential avenues for growth within HVACR e-commerce.
The report emphasizes that bridging the chasm between leading performers and median distributors could bolster HARDI members’ competitive position, especially as HVACR contractors increase their online purchasing activities.
In 2023, contractors sourced 36% of their purchases via online channels, indicating a progressive uptick from previous years.
Conducted in conjunction with the business-to-business marketplace LBMX Inc., the e-commerce report was authored by Tim Fisher, HARDI’s Director of Market Intelligence, alongside research analysts Grace Helser and Jacob Miller.
The experiences of two HVAC distribution firms that predominantly operate online lend credence to the findings presented in this white paper.
Mike Luongo, president of Total Home Supply—a company he co-founded in 2010—reported significant growth in recent years.
“I am a staunch advocate for the online market; its expansion is inevitable,” Luongo remarked, noting that consumers appreciate the convenience of researching products from home.
He elaborated that the younger generation often thoroughly investigates their options, reviewing numerous websites and educational content before making purchases.
Nando Cunha, COO at SupplyHouse.com, which specializes in HVAC, plumbing, and electrical supplies, echoed these sentiments, stating, “The online HVACR market will continue its trajectory of growth as contractors and homeowners prioritize efficiency and access to an extensive array of products.”
Cunha anticipates further e-commerce adoption across various trades, alongside an ongoing demand for educational resources, transparency in product offerings, and dependable supply chains.
A considerable milestone for Total Home Supply was the gradual acceptance by manufacturers of the permanence of online sales.
Luongo reflected that initially, manufacturers were hesitant to engage with online distributors, often dismissing their potential. “Over the years, we’ve secured that acknowledgment,” he shared.
Luongo illustrated the challenges faced by recounting an experience where Total was selling a wide range of accessories for a specific line, yet the manufacturer’s representative failed to visit for several years.
“It took four or five years before a sales rep finally initiated contact with us,” he recounted. “Upon realizing our operations, they expressed interest in showcasing additional products.”
Both Total Home Supply and SupplyHouse.com conduct the majority of their business online, albeit with some local customer interactions. SupplyHouse.com maintains warehouses across New Jersey, Texas, and Nevada, offering local pickup options.
Furthermore, both distributors emphasize professional installation for certain products. “For items necessitating professional installation, we clearly state in our product descriptions that such installations must be carried out by licensed contractors,” Cunha explained.
“We strongly advise customers to consult local regulations and to engage qualified professionals for compliance and optimal installation.”
Luongo added, “Homeowners often purchase equipment and subsequently hire local contractors for installation.” Total Home Supply scrutinizes every order; should discrepancies arise—such as incorrect line sets or products intended for commercial use being shipped to private residences—the company proactively contacts customers before dispatch to verify their orders.
Customer support also remains a priority for both entities. “Although we do not have traditional counter-service locations, our customer service team stands ready to assist via phone, email, and chat, addressing technical inquiries and offering product guidance,” Cunha concluded.
Source link: Achrnews.com.
