Can you afford to wait until it’s too late?

By Phil Weafer February 01, 2015 Heating & cooling

The insanely hot weather is still with us but that doesn’t mean heating products should not be top of mind with retailers – or consumers. Oh and we’d advise you not to wait for that cold snap this year before ordering… Phil Weafer reports.

To view a PDF of the complete feature as it appeared in NZ Hardware Journal magazine, click the download button at the bottom of this page.

Looking at recent GfK statistics from the appliance channel (see sidebar on page 28) and other studies covered in this feature, sales of heaters are growing in terms of volume. However, while the volume has increased, there has been a slight decrease overall in value in New Zealand.

Simx is one supplier that has experienced strong growth over the last 12 months. Ventilation & Extraction Product Manager St John Vuetilovoni explains that over the last few years the company has seen continuing growth, partly due to new packaging and a greater in-store presence of the Simx systems.

“In particular last year, through some of the promotions we ran, we had a really good pull-through in terms of sales. The increased presence of our HeatTrans product in the marketplace is driving more visitors to our dedicated website to learn more.”

Vuetilovoni feels that because the products are more visible to consumers, a greater awareness of the benefits they offer has resulted in some good growth.

Offering an intriguing perspective on what sounds like a positive year for heating, is WeissChris Ahearn. After entering into a voluntary recall, things on the heating side of the company were slightly stalled.

“It was unfortunate because we were a little late getting some new products out. They are great products and actually sold really well in that summer period. We missed the mark but I believe if we had have been able to launch when we wanted, we could have had a great year.”

 

EFFICIENCY ON THE BRAIN

The proliferation of energy efficiency has meant that consumers are more aware of the benefits of having more advanced heating systems in homes. The Government through EECA has made a concerted effort in recent years to promote energy efficiency to the public and from speaking to suppliers this has resulted in some nice pickups in the market for heating products across the board.

“What I believe has happened in recent years is that there has been a focus amongst the general public on warming up their living area. People are looking for the next step and that’s around whole home comfort,” explains Simx’s St John Vuetilovoni. According to Vuetilovoni, the affordability of running a Simx HeatTrans heat transfer system makes it an appealing proposition for consumers.

“The systems don’t cost a lot to install and run and people are becoming more aware of that. They’re putting in something that is affordable to run and delivers comfort but without the expense of a whole home active heating system.”

In keeping with the energy efficiency push, heat pumps have continued to see growth in the market for heating products. Despite a slight year-on-year fall in the total market during the depressed year of 2012, sales strengthened again in 2013 and levelled at all-time highs in 2014.

Fiona Harris, Marketing Manager for Fujitsu General, says it’s no surprise that heat pumps can be found in over 25% of Kiwi homes: “They have become a ‘Kiwi must have’ because the convenience of instant, clean, green heat is hard to ignore. Also, they offer excellent efficiency in times of rising power costs. In fact, some of the better, more recent products can deliver up to five times the heat per dollar than other heating systems.”

Heating can account for as much as 40% of power bill costs in winter months, and the new technology in heat pumps will reduce power usage. Indeed, EECA states that higher efficiency heat pumps save Kiwis as much as $58 million per year in electricity every year.

Regardless of whether it pertains to heating products, there is a greater awareness of the effects of energy efficiency. Julian Liew-Young at Glen Dimplex is another to have seen the impact of greater energy efficiency in heating products.

“Consumers have a better understanding of the long term costs and energy usage of products. Along with that, energy prices have gone up in recent years, so more people are thinking about how much the product is going to cost them over the lifetime in terms of usage as well as the upfront, initial cost.”

 

NO WAITING FOR THAT COLD SNAP?

In the past, heating (and cooling) products have been viewed by consumers and retailers as a reactionary purchase. People wouldn’t even consider looking into heating products until they felt that first cold snap.

But things have changed and these reactive, rather than proactive, tendencies are on the wane, judging by opinions around the sector. Still, getting down to the reasons behind this seachange vary depending on who you speak to.

Speaking to suppliers, the belief is there is a greater level of knowledge and awareness amongst consumers around how condensation can affect a home. As a result, consumers are also more aware of the benefits of having a warmer home.

Chris Ahearn at Weiss says that it comes down to educating both retailers and consumers in beating that inevitable last minute rush for heating products. He says the company’s aim is to get that message of being proactive across as suppliers to retailers and consumers: “More and more consumers are being proactive – people are buying winter products during summer, trying to get it sorted early.”

Julian Liew-Young over at Glen Dimplex is another to see indications that there is a tendency these days for consumers to act before that initial cold snap. But, he tempers, there are still reactionary elements to consumers’ purchasing habits.

“There are more people coming into stores having looked a product up, knowing it’s what they want. People are more certain and informed as to what it is they want. Primarily it is an impulse purchase based on the weather but the research aspect of the market is certainly growing.”

 

INNOVATIONS ALSO DRIVING THE MARKET

When looking at heat pumps, we’ve been hearing that product innovations have been the big pull factors for consumers in the last two years. Over the last year, we have seen some big advertising campaigns targeting both the commercial and consumer markets, ensuring everyone was aware of these exciting innovations.

Of those brands active in the hardware channel, specialist brands Daikin and Fujitsu introduced a new thermo-dynamic system into their lead products in 2014. These systems made their heat pumps significantly more efficient than traditional products.

Fujitsu’s Fiona Harris explains the benefits: “These new models are also far more environmentally friendly, as they have zero ozone depletion as well as reduced global warming potential.”

As we go to press, it is noted that other brands such as Panasonic and Mitsubishi Electric are developing these new systems in Japan, possibly with a view to launching in New Zealand sometime in the next two years.

 

KEEPING EVERYONE IN THE LOOP

When asked about how key the relationship between supplier and retailer is in ensuring the consumer gets the best service, Rinnai’s National Marketing Manager Kathryn Geck feels that supporting retailers is of utmost importance for suppliers.

“This relationship is key and we are continually looking at ways to support both the trade product knowledge and also the merchant product knowledge. We know it’s important to visualise a fire in particular in the purchase process and as a result have developed tools to enable our customers to do this.”

“When we launch a new product it is important to ensure that our sales reps are out on the road, and training ‘product champions’ in the stores to help consumers with the knowledge they need to select a suitable system for their home,” says St John Vuetilovoni at Simx.

Julian Liew-Young at Glen Dimplex also feels it is of the utmost importance for suppliers to work with retailers so a common ground and understanding can be reached to help consumers.

“For us, in-store knowledge is really important because our products cost a little more and we believe that they are worth the price. But people have to be willing to understand why products are priced differently. So we rely on our training and our retail partners to explain why the price is so different.”

So, looking ahead, although the heating market may be more on the front foot than we’re used to seeing, we’d still advise keeping an eye on that mercury to be well prepared for the heating rush!

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DOMESTIC HEATING APPLIANCES SET TO EXPAND

According to a report from Global Research & Data Services, the expansion of the global domestic heating appliance industry is forecast to reach 2.9% per annum in the coming years. Between 2007 and 2013 the market increased with an average annual growth of 5.3%.

Currently, soil heating and other electric space heating equipment accounts for 42.1% of global demand while the remaining share is divided between electric heating (41.6%), non-electric heater (13.5%) and electric storage heating radiators (2.8%).

As you’d expect, Canada, China, Germany, Japan and the United States represent the largest domestic heating appliance markets while the strongest annual growth is forecast to occur in Tanzania (35%), Jordan (15.6%), Bolivia (14.8%), the Philippines (12%) and Azerbaijan (9.5%).

www.grdsreports.com

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HOT STATS HIGHLIGHT CHANGING MARKETPLACE

GfK has just released to us appliance channel-related figures looking at the performance of the electric heater market comparing the period of January-December 2013 to January-December 2014. Overall the electric heater market saw nearly a 10% increase in volume, but slightly decreased in value (–0.6%). Bar radiant heaters saw the highest volume growth at nearly 60% followed by fan heaters, at 17%. Electric fires however have had a huge drop in both volume (84%) and value (76%) which is a different story to that of 2013 versus 2012, according to GfK.

www.gfk.co.nz

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GETTING HOT UNDERFOOT?

Interior design and home remodelling sourcebook Remodelista looked at the basics of remodelling a home in its Remodelling 101 series. One topic that was covered was “5 Things to know about Radiant Floor Heating”, a trend that is growing according to the article’s architect writer. So what are the important aspects of radiant floor heating?

What is radiant floor heating? – Radiant floor heating is an under-the-floor heating system that conducts heat through the floor surface rather than through the air.

How does radiant floor heating work? – The two most common types of radiant floor heating systems are electric (which heats via electric wires) and hydronic (which heats via hot water passing through tubes), both of which are buried underneath the floor. Electric radiant floor heating systems are easier and more affordable to install, but more expensive to operate, making them ideal for heating small areas. Hydronic systems are less expensive to operate, so they work well for large floor areas and even entire houses. The caveat is that they come with higher initial costs as they are more complicated to install and require heated water from a boiler or water heater.

What are the pros of radiant floor heating? – Radiant floor heating ensures that the entire body is kept at a comfortable temperature. Waves of infrared radiation rise from the floor warm up the building mass, insuring that heat isn’t lost to surrounding surfaces. In a conventional forced-air heating system, heated air (along with dust and allergens) rises to the ceiling and drops back down as its temperature lowers, making it difficult to heat the lower body.

What are the cons of radiant floor heating? – A radiant-floor heating system is difficult to install after a floor is already in place, and it’s really only feasible if the prospective buyer is willing to remove the floors in the house or is building a new home. While there are new products, such as electric radiant pads, that can be installed between the joists underneath the floor, they require access from below via a basement or crawl space.

Which flooring materials work best with radiant heat? – While all flooring materials can be used with heated floors, some work more effectively than others. Some general rules of thumb: Materials with thermal-conducting properties (stone, concrete, ceramic tile) conduct, transfer, and hold heat effectively while withstanding high temperatures. Solid wood floors can shrink and expand with fluctuating temperatures leaving unsightly gaps. If you’re in love with wood floors, however, an experienced wood-floor installer will be able to manage potential shrinkage. Vinyl and plastic laminate floors also come with temperature limitations, while carpets have insulating properties that potentially reduce heat flow.

www.remodelista.com

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