More power to you
CEO of Purplex Andrew Scott discusses consolidation and the power of brand.
For years we’ve talked about consolidation in the glass and glazing industry, and if there was ever a ‘pivotal year’ for the industry then perhaps 2019 was that year?
We weren’t alone. Three years of economic uncertainty with Brexit, a new prime minister, and a general election have taken its toll on the economy, consumer confidence and the housing market.
But the glazing industry was also battling its own demons: an ageing workforce, years of under-investment and squeezed margins as the industry struggled to justify viable pricing levels.
Inevitably, it pointed to significant changes for the industry in 2020 and beyond, with some suppliers exiting the market or being absorbed by stronger companies, while sadly some well-known brands are likely to collapse.
However, it isn’t all bad news. With consolidation comes opportunity for forward-thinking, ambitious companies, and I suspect we will see a new wave of acquisitions and several new industry leaders emerge. We can’t ignore the fact that the industry is a £multi-billion market with no single dominant player.
And the future looks bright: government and consumer-led moves towards a more sustainable future and net-zero carbon will enable our industry to evolve, develop new products, and regain margin, provided the industry doesn’t repeat mistakes from the past.
We are perhaps entering the most exciting period for the window, door and conservatory industry and the opportunities to build highly successful, profitable and valuable companies have never been greater.
To realise what is possible, we may need to look at other markets.
On January 22, car manufacturer Tesla hit $100 billion market value, more than US rivals Ford and General Motors combined, despite being the new kid on the block and producing a tiny fraction of cars compared to the giants.
Is it simply because Tesla make electric cars? If this was the case, it would be gameover for Tesla as other manufacturers launch premium EVs, with the Ford Mustang E-Mach, Porsche Taycan, and Jaguar I-Pace all available this year.
No, Tesla’s recent $100 billion value is much more than the power-train of their vehicles. And the glass and glazing industry could learn a great deal from it.
Tesla stands for something, and so do the people who drive them. It isn’t just about electric cars; it is about breaking with convention. Tesla is ‘on a mission to accelerate the world’s transition to sustainable energy’.
In a few short years, Tesla is on track to build one of the world’s strongest brands. A brand that really means something to its customers, its employees and its shareholders.
Tesla isn’t selling cars, it is selling a sustainable future.
Yet, we see all across the glass and glazing industry companies competing on product and competing on price.
It generally boils down to marketing. As an industry, most companies equate marketing to lead generation. Without new sales leads installers don’t have a business, and the entire supply chain depends on installers’ ability to convert leads into orders.
However, the world’s leading marketers know that the most successful, profitable and valuable companies are built on their brand.
Lead generation is the life-blood of the glazing industry, but those companies who also invest in their brand will ultimately outperform those that just focus on lead gen alone. It’s no surprise that Tesla had 250,000 pre-orders for its dubious Cybertruck within a week of launch in November 2019, despite the product not being available until 2021.
Building a strong brand goes deeper than just a logo or a new mission statement. It needs to resonate with all stakeholders, from customers and employees to suppliers, and it needs to be authentic. A brand is the outward expression of a company’s purpose, ethos, values and proposition.
As the glazing industry consolidates and evolves, we will see winners and losers. Those companies that are true innovators, invest in their business, and build meaningful brands, will emerge triumphant.