International. HARDI learned through a contractor survey in 2019 that product availability, price, and customer service are the most important channel attributes for contractors when purchasing HVAC/R-related products.
With COVID-19 creating perhaps the biggest customer service challenge in our industry history, how did distributor performance evolve in 2020 and how has COVID-19 affected contractors' service preferences?
In partnership with HARDI, Farmington Consulting Group presented the findings of its 2020 contractor survey and answered key questions related to the evolution of distributor sales performance and the future of contractor demand. These questions include:
- What do contractors want from their distributors?
- What value-added services are important to contractors?
- What were the shortcomings of distributors since COVID?
- What are the contractor's expectations after COVID?
- How have contractors performed financially in 2020 and how are they projected to perform in 2021?
Key points of the report include:
1. Inventory problems persist
The lack of product availability remains a major concern for contractors. HVAC/R contractors are more open to buying from alternative channels due to the current product shortage.
2. Distributors are still number one
The general consensus among HVAC/R contractors is that the independent wholesale distribution channel remains the best avenue for them to source their products. Independent wholesale distribution clearly outperformed all other channels in the eyes of HVAC/R contractors.
3. Alternative collection options are here to stay
More and more contractors are looking for contactless delivery services and alternative pickup options, such as curbside pickup, self-service service, contactless delivery, safe deposit boxes, etc. Those distributors that provide these services will be separated from the others.
4. The physical presence of Territory Managers (TM) remains important to contractors
While some contractors may prefer to receive a phone call or video chat, the vast majority still have a strong desire to conduct outside sales visits in person. This preference varies by region, contractor demographics, and other factors, but for now the desire to connect in person remains.
5. E-commerce expectations have increased
The COVID pandemic has accelerated the sea change of e-commerce in the HVAC/R distribution industry. More and more business will be conducted online as the next generation of buyers enter the industry and veteran buyers leave the industry. Distributors who have a functional online ordering system will gain market share in the future.
6. Positive financial perspective
The financial outlook for most HVAC/R contractors is positive going forward, and the financial impact of COVID was not as devastating as originally feared.
The full analysis can be found at the following link: https://hardinet.org/market-intelligence/market-analysis/state-of-the-channel/
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