Plavecsky's
by Jim Plavecsky
January 31st, 2012

Innovation Provides the Spark for Growth

I read with great interest DWM’s first-ever industry benchmark survey starting on page 34 of the November-December 2011 issue, and I found a few surprises. When I talk to window manufacturers, many are taking a wait-and-see attitude on putting an R5 window system into their product lines yet, according to the DWM survey, 69 percent of dealers and distributors currently offer at least one brand of R5 window. Moreover, 24 percent of them say that R5 windows comprise more than 10 percent of their businesses and 12 percent say that R5 products comprise more than 20 percent of their businesses.

Everybody, that is, 100 percent of dealers and distributors, expects sales of R5 windows to grow at least 10 percent in the coming year with 24 percent expecting R5 to grow more than 10 percent. With 56 percent of respondents foreseeing either no growth or a decline in the construction industry, this means that growth of R5 windows will outpace industry growth by a factor of at least tenfold!

So, to those of you who are delaying the intro of an R5 window, I ask, “How can you afford to wait any longer?”

Higher end windows with special features and benefits enable window manufacturers to differentiate their products from others that all seem to stack up evenly vs. competitive products. It is this “stacking up evenly” factor that leads to downward pricing pressure in our stagnant window market, and this is the very reason that 58 percent of respondents indicate they have had to reduce their profit margins to remain competitive with an additional 4 percent saying they are selling at or below cost. If you are selling at or below cost, it is time to significantly differentiate your product line from others in the pack or else you might just as well close the doors! After all, why remain in business for zero profit?

R5 windows represent a significant opportunity to differentiate your product line from the rest of the pack, and there doesn’t seem to be a shortage of dealers and distributors ready to accept and market the R5.

One of the most revealing parts of the survey was the responses regarding the factors that play into the decision regarding choice of which manufacturer to represent. The availability of innovative products was the second biggest factor in determining which window manufacturer to represent, second only to the manufacturer’s reputation, which is most likely also greatly impacted by innovation.

While R5 windows may be one of the most talked about products in the window industry, they are not the only innovation or way to stack up higher than other manufacturers in the pack.

What other innovations in the marketplace do you see out there, and how might they provide you the opportunity to set your company apart from the others thereby projecting an image for your company as a leader and an innovator?

Now is the time to take action. Stagnant marketing in a stagnant marketplace is a recipe for disaster. You must be quick on your feet and possess a knockout punch to win the bout!

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  1. The foundation of the replacement window industry is innovation. Prior to the 1950′s wholesale replacement of windows did not exist. The innovators who started this industry recognized homeowners had a need for better windows. They introduced innovative energy efficient , easier to clean and maintenance free windows. At the same time they created consumer desire for these innovative products.
    Over the half century or so since, leaders in the replacement window industry have had the opportunity to embrace new technology many times. From the introduction of insulated glass units to the switch from aluminum to vinyl the opportunity to embrace new technology has repeated itself again and again. Those who led the way and embraced the right new technology thrived. Those who failed to embrace new technology until they were already mature missed the boat and often drowned at sea trying to swim to catch up to a boat that already set sail.
    The latest innovation in windows – the R-5 – will have a life cycle typical of any other new product that gains acceptance by consumers – introduction, growth, maturity and decline. Although the introduction phase can have its share of problems, it is the phase where the largest markup can be had. Industry leaders who fail to introduce new products to go through the life cycle miss out on the opportunity for profits during the introduction period. When they wait to get on the boat of “New Technology” until the growth stage of a product ‘s life cycle they may find they are too late… That new product they failed to introduce and profit from may already be sinking into the maturity or decline stages of its life cycle and the true industry innovators are on to introducing and profiting from the next innovation – while still profiting from the maturity phase of that older product.
    Those who are on the forefront of the introduction phase of R-5 products will not only benefit from higher markups during introduction, they will also profit most during its growth cycle… I am embracing the R-5 product during its introduction phase.

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