Suppliers Talk Distribution, Digital Tools and Leveraging Data

BY Chris DeBoer
2/12/2021 - HVAC Market Intelligence

As a part of our 2020 HARDI Summit and our annual State of the Channel report, we partnered with Steve Yurek, President and CEO, AHRI to moderate a discussion with two prominent HVACR supplier members: Mike Branson, President, Air, Rheem Manufacturing and Nathan Walker, Senior Vice President, Goodman Manufacturing.

The group discussed several topics related to how suppliers and distributors performed in 2020 and shared their beliefs on how the channel can continue to adapt in the coming years. Below we recap two major themes the group identified as being key considerations for 2021 and beyond: digital tool and data utilization.

Digital Tools

2020 was a year that forced almost all distributors to change business practices and processes extremely quickly. Some regions of the country faced more immediate and longer lasting business disruptions but to varying degrees, all businesses were affected by the global pandemic. Curbside pickup, e-commerce sales and text to order services all became instrumental to distributors’ businesses and how they safely continued to support their customers and end users through the pandemic.

In the early months of the COVID-19 pandemic reaching the states, distributor members that had already invested money into e-commerce solutions found it much easier to quickly adapt to contactless transacting while others that lacked the resources to easily process contactless transactions faced more difficulties. Utilization of these tools enabled distributors to conduct business safely which allowed for sales to remain steady and grow their sales through digital platforms. These digital capabilities helped contribute to many distributors’ ability to end the year experiencing unforeseen growth.

Virtual meetings, remote training and other typical in-person occurrences needed to change. For better or worse, most distributors found ways to fulfill the needs of the suppliers and their contractors through various digital tools including e-commerce stores, CRM systems, texting platforms and video conferencing to name a few. In the eyes of these suppliers, one thing became clear as we looked to wrap up 2020, conducting business in new ways through the utilization of new technologies is not going anywhere. In fact, the past 12 months has only sped up the adoption of these newer digital tools, including by those who previously might have been more opposed to considering these new practices.

“It is an opportunity for some wholesalers to rethink their whole operation and footprint, because they now have these kinds of digital interactions that provide an opportunity for them to streamline what their operations look like and how they are servicing customers.” Branson said.

Distributors should consider taking time to reflect on what changes helped or could help their businesses moving forward and devise a plan to create better and more permanent changes. Rethinking how you are servicing your customers and making sure that you are closely aligned with their current and future needs and expectations. Once these are considered, determine what digital tools are available for you as a business to meet those demands.

For some additional insight on current contractor expectations check out 6 Themes Contractors Want Distributors to Know in 2021.

Leveraging Available Data

Many businesses, including HARDI, realize the power of data and how powerful good data can be. This is one reason why we decided to expand our Market Intelligence team and benchmarking capabilities. This is also why we continue to drive improvements to our forecasting and data programs, which will directly increase the quality of distributor decision-making. One such tool is the State of the Channel report. This report came about in an effort to better understand the size, shape and segments of the HVACR industry.

Our State of the Channel report was created to help our members, and ourselves, understand the HVACR landscape in greater detail. The research findings outline both quantitative and qualitative information that helps shed light on the previous year on how things have progressed and changed. The report leverages many data sets that are reviewed and analyzed by our team to help form a narrative on what has occurred and make predictions on the future state of the HVACR industry. The report identifies macro trends, identifies drivers and threats and outlines opportunities for growth in the distribution space.

 We are making great progress in our use of data and intel but know there is still more to be done. The panelists in our Voice of Supplier session mentioned additional creative efforts to gather and interpret data to the industry’s advantage.

During the conversation Walker stated, “Collectively between us as OEMs and distribution, we’ve got a lot of real time data that we could use to be more proactive as opposed to reactive on big changes in the market.”

It continues to be our goal to help the industry come up with even better, more robust tools and resources to make the shift to being more proactive a reality. 2020 exposed weaknesses in the ability for some businesses to be able to forecast demand which exacerbated inventory shortages across the HVACR industry. These shortages led to a brief conversation on which inventory strategies distributors will leverage in the coming years; will “just in case” inventory replace “just in time”? At the end of the year many businesses, especially ones with a heavy residential focus, ended up doing pretty well, but how can this difficult year prepare us for the future of wholesaling?

Widespread participation in our benchmarking programs – and the Unitary Market Report in particular – provide the Market Intelligence team with the requisite data to study the market and develop accurate forecasting and prediction models. Through distributor participation in this program, we can improve our data and ensure the delivery of better, more informative HVACR market research and forecasts in the future.

Conclusion:

According to some of the largest industry OEMs, there is no hiding from technology and innovations that are available to you and your business. Now more than ever, finding new, better ways to maximize efficiencies and boost performance should be top of mind. The number of tools and technologies available can be daunting for any business to consider but you must not allow the overwhelming number of opportunities paralyze progress. Because the fact of the matter is other businesses are finding better and more strategic ways to ease friction in business transactions, get to know their customers better, cater experiences based on unique individuals’ preferences and learn from data to adjust business practices moving forward

Additionally, there is so much data that is available and can be utilized if you look commit to being more data-driven. Other industries have found ways to utilize data in some pretty amazing ways and we plan to be a part of that in the HVACR industry. We continue to partner with our members, partners and vendors to offer tools and resources that can help you make well informed business decisions as they arise.

It is now more important than ever to consider which investments make sense for you and how the decisions being made now will impact the immediate and long-term relevance of your business. Do you have your plan in place and answers available to make sure you remain successful for years to come?


If you missed out on #HARDISummit, you can still watch all sessions, including The Voice of Suppliers and The Critical Role of Inventory. You may purchase the OnDemand sessions, or if already registered, watch the playbacks.