For the January issue of ProSales, the assignment was to explore what’s happening in the decking world. With that in mind, I spent two days in October at the annual Deck Expo, looking at products and speaking with manufacturers about trends.
Three lessons from that show stood out:
- Composite manufacturers have solved most of their product issues and are now focused on growing the market.
- With that in mind, they’re looking for ways to claim some of wood decking’s share.
- As the industry mindset continues its shift from decking and railing to outdoor living, sales approaches need to adapt.
Will Composites Hit the Ceiling?
Though the composite and cellular PVC market share has grown steadily over the last few years, some industry analysts expect just a few more years of growth before it peaks.
One of these is Principia consulting. Its most recent research on the decking market found that while sales of all types grew during the past three years, composites grew the fastest, with 5.5% more product shipped by volume in 2016 than in 2012, compared to 3.8% for pressure-treated (PT) decking.
In the past year alone, Principia’s researchers interviewed more than 1,000 people in all parts of the value chain: manufacturers, distributors, dealers, contractors, and homeowners. Based on that, managing partner Lou Rossi predicts that overall composite market penetration will surpass the former peak of 17% in the next five years, reaching 20% on a volume basis.
Those predictions are for the entire decking market, including DIY, but according to the February 2016 issue of Professional Deck Builder, a sister publication to ProSales, the magazine’s pro readers already use composite, PVC, and other non-wood decking products on nearly 60% of their projects. Their embrace of this technology shows that manufacturers have solved their quality problems, with the market now dominated by attractive capped composites that weather well and need little maintenance.
Wood in the Crosshairs
Despite the quality of today’s materials, that projected 20% market share may be near composites’ natural market peak. That’s because current technologies limit manufacturers’ ability to reduce prices.
In fact, most composite growth has been at the upper end of the price scale. “The trend is toward higher value, better performance, better aesthetics,” says Rossi. This has created a polarized market, with low-cost PT lumber at one end and more expensive composites at the other. One way to grow sales is to go after customers one expects to buy PT lumber, despite the price difference.
As recently as a year ago, manufacturers weren’t expressing much enthusiasm for this, but their tune has changed. “It would be a mistake to think we can’t compete with wood,” says Adam Zambanini, Trex’s vice president of marketing. “We see a tremendous opportunity in upselling some of those consumers on a lower maintenance product.”
How, and if, that strategy plays out remains to be seen, but it wouldn’t take much success to make the effort worthwhile. “In North America, 1% of the market share for wood is worth about $50 million,” says Zambanini.
Bringing the Indoors Out
While targeting PT is still mostly talk, another strategy already looks like a success: rebranding decking manufacturers as outdoor living companies. “More and more homeowners want the whole deal: a deck with a dry-below system, a landscaping, lighting, and fence,” says Mike Beaudry, executive director of the North American Deck and Railing Association (NADRA).
As an example, Beaudry cites the NADRA annual deck design awards. “Six years ago, you saw deck after deck,” he says. “But this past year our awards included patios connected to decks and pools, screened-in porches, arbors, and outdoor kitchens. Contractors are now selling an outdoor experience.”
The type of products customers want to include in that experience was echoed in a buzz phrase I kept hearing at the Deck Expo: bringing the indoors outdoors.
Several manufacturers told me that buyers want outdoor products that mimic what they have inside. “People want decking that looks like their flooring, and one of the strongest flooring trends is distressed and reclaimed wood,” says Chris Camfferman, senior product manager at Universal Forest Products, which makes Deckorators decking. Indeed, several products now have capstock that looks like rough-sawn lumber, including Deckorators’ Heritage, Fortress’ Infinity, and Armadillo’s Impressions.
Buyers also want classier railings, which is reflected in the explosion of products. One particularly visible product at this year’s Expo was cable rail. More manufacturers have it, and most promise ease of installation. Cable is a good fit for homeowners who want to enjoy the view and who value the low maintenance of stainless steel. “The category is still small, but we see a huge growth opportunity for the next few years,” says Andrew Penny, Feeney’s vice president of marketing and advertising.
However, the healthiest railing category continues to be aluminum. “In multifamily housing, we have seen large geographical areas switch en masse from steel to aluminum because of maintenance,” says Greg Burkholder, president/CEO of Fairway Architectural Railing Solutions, which makes aluminum, vinyl, and composite railings. “We believe it will continue to grow at a strong pace in single family housing.”
Burkholder doesn’t foresee much growth for vinyl. “It’s nearing the precipice of its product cycle,” he says.
Selling Lifestyle
The proliferation of outdoor living products has created a sales challenge: how to help the customer sort through the choices.
Take railings, for instance. “With hundreds of collections to sort through, the choice can really hold up the sale,” says Zambanini. Trex is addressing that with a selection tool called Railing Duos on its website. Click on a decking color and the site returns the three most popular railing choices. Click on one choice and you get a sheet of tables showing how much of each decking or railing component you need per unit of measurement.
Expect Trex and others to introduce additional sales tools in the future. “I see us offering more and more of these,” says Zambanini. “Our focus has to be on making things easy for the customer.”
Of course, decking and railing aren’t the only products growing in number. Lighting has become more popular, as have pergolas, storage cabinets, and other amenities.
Thriving in this market will require a consultative sales approach. “Dealers need to look at how customers will use the space,” says Camfferman. He believes the dealers most poised to capitalize on outdoor living are those who are good at kitchen design, because the interview process is similar. “You need to get answers to questions like how much of the year the homeowners will use the outdoor space, and for what; whether they will use it at night; whether they have children or pets,” he says.
“The dealers who will be most successful are those who know how to have those kinds of in-depth conversations with customers, and who know how to discover what those customers really want.”
