Can low-price companies own a significant share of the window replacement market? Executives at Window World and Window Depot USA absolutely believe so. They cite The Home Depot and especially Wal-Mart as their business model. “We call ourselves the Home Depot of the window business, the Wal-Mart of the window business,” says Whitworth. “We think we do it better than everybody else.”
Both of those operations came to dominate home improvement retailing and discount department store retailing, respectively, by driving down price and steadily multiplying store locations.
The community of manufacturers, distributors, and contractors is many times divided over the ultimate outcome of today’s window wars. “Lowball pricing is not a new concept,” says Gorell, who has spent many years in the window business. “We saw it with aluminum windows and with vinyl. And when vinyl started out it was all lowball competing against aluminum.”
Clearly, there are lots of variables and caveats that stand in the way. For one thing, what happens when more than one low-price company comes into a market, as is now increasingly the case? Is there room for two or three companies selling windows for less than $200? Or does it become what one competitor calls “a race to the bottom”?
And is there a finite number of people interested in low-price products? Do such buyers make up, say, 20% of the potential window replacement market? Thirty percent?
Executives from low-price companies concede that there are homeowners who aren’t their customers, which is why all three of the biggest have introduced additional products — siding and window treatments, to name just two — that their dealers can cross-merchandise to past customers. And traditional window replacement companies will get better at responding to the new reality created by this new competition — because they will be forced to.
“You have to build a presentation that clearly differentiates your [product] from a generic basic vinyl window,” Talmon says. “You’ve got to differentiate your salesperson as an individual, your company, things about your product, your installation, your service, then all the intangibles. If you can’t do that, you’re absolutely dead.”
That’s a point that executives at low-price companies may be willing to concede today, when not too long ago — when low-price was “a movement,” in Venable’s words — they wouldn’t have.
“I think there will always be both [ourselves and traditional window dealers] out there,” Whitworth says. “We are not a threat to the traditional window business. We will continue to grow and we will continue to capture more market share, and those mediocre companies doing it the old Tin Man way will go out of business. Those doing a good job of servicing their customer, they will continue to do well.”
WOULD THAT BE À LA CARTE?
This past April, a small advertisement appeared in The Morning Call, of Allentown, Pa. “Don’t be FOOLED by $189 INSTALLED window advertisements!” ran the headline.
The 4-by-6-inch ad spelled out “the important and relevant issues” when it comes to buying vinyl replacement windows. These include the fact that buying windows “à la carte” forces the homeowner to pay extra for low-E coating, argon gas, insulation, sealing, exterior capping, and removal of debris. The ad read: “These services are bundled in our standard window price so the price we quote you will be the price charged at the end of the job, no surprises!”
The ad, by Alan Kunsman Roofing, in Freemansburg, Pa., takes clear aim at low-price window companies such as Window World’s Allentown dealership.
Company owner Kunsman says that such organizations use low price “to get a foot in the door,” then run up the cost with extras. He told REPLACEMENT CONTRACTOR that he is skeptical about the pricing advertised by these companies, and flatly maintains that “you can’t put a window in today for $275.”
ALL THE BEST The Window World dealership has been in business six years, and its billboard on Route 22, the principle highway running through the area to the Pennsylvania Turnpike, is impossible to miss. It’s also the only window replacement billboard on that much-traveled thoroughfare.
“Window World, Clear Choice, we got ’em all here,” says Jim Lett, owner of A.B.E. Doors & Windows, in Allentown. But Lett, a one-time window installer who founded A.B.E. 30 years ago and last year posted sales of $5 million, appears unfazed by the low-price window companies now competing in the Lehigh Valley.
Roughly a third of A.B.E.’s business involves installing windows, a third is entry doors, a third garage doors. All its installers are employees, four are AAMA-certified. Thus, the company is able to provide extremely high levels of customer service, as indicated in the customer feedback forms stacked at the edge of Lett’s desk.
“That’s a big part of how we differentiate,” says general manager Marc Rapschak. “We have the best-quality product, the best-trained staff, and customer satisfaction is our major goal.” In addition, he says, all except one of the company’s salesmen were once installers themselves.
A typical price per opening is around $650. Sales have steadily grown, and are up this year. In 2007 referrals and previous customers generated 47% of A.B.E.’s business — a testament to longevity and customer service.
Rapschak says that A.B.E. sales reps don’t often come up against low-price competitors when bidding a job. When they do, reps emphasize “our technicians and their training, the manufacturer we partner with [Gorell Windows], their Energy Star company-of-the-year award, and the awards we’ve won.” When the company surveyed past customers to find out why they’d purchased from A.B.E., fewer than 5% named price as the reason.
NEW KID ON THE BLOCK Meanwhile, near the airport, the phone is ringing at Clear Choice Lehigh Valley, the new kid on the window replacement block.
Joe Andrews once operated an installation business running four crews for two local window companies, among them Window World of Lehigh Valley. He and his wife, Lynn, opened their Clear Choice dealer-ship in March 2007.
With his knowledge of the business and 25 years experience as an installer, their numbers began to grow. They now claim to be installing 500 windows per month.
The Andrews credit much of their success to support from corporate. “It’s been awesome,” Joe says, adding that low price is an extremely effective way to attract new customers. “We take the basic window to the homeowner and design it to their needs,” he explains; the buying power of Clear Choice drives down unit cost.
Joe says that he now sees more “little guys,” that is, one-truck operators, offering installed windows at below $300.
Pushing the ad from The Morning Call across the table, his wife, Lynn, shakes her head. “You either love us or you don’t,” she says. —J.C.
