Industry insight


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Tackling the ‘Amazon effect’ in the HVAC market


The Covid-19 pandemic has had a profound impact on buying patterns in heating, ventilation, and air conditioning. So how should the market respond for the long-term? Digital experience specialist Optimizely’s senior solutions architect, Gavin Masters, has some insight


T


he ‘Amazon effect’, which has disrupted industries as varied as book publishing, retail, and shipping, has started to noticeably impact


heating, ventilation, and air conditioning (HVAC) wholesalers. Buyers are accustomed to the convenience of shopping online, with the benefits of same-day delivery, one-click purchases and more — and HVAC professionals and end customers alike are increasingly opting to purchase goods from online giants such as Amazon. Amazon’s ease of use, speed of delivery, and


advanced use of data and analytics poses a serious challenge to the relatively digitally immature HVAC sector. The Covid pandemic has exposed a pressing need to modernise to reclaim customer affinity and compete with digitally native market players. We see businesses who are succeeding in this new digital-first environment are exceling through key initiatives:


Create a tangible differentiation in the digital world


According to management consultancy McKinsey, “traditional distributors have the upper hand in several top-selection criteria, including product availability, customer service and technical expertise.” The traditional organisations that are successfully closing the gap between their operations and those of digital natives, adds McKinsey, are those creating tangible commercial differentiation. They’re investing in technology and investing to create omnichannel customer experiences. McKinsey’s points are important because they highlight why wholesalers should not be aiming to compete with the likes of Amazon directly, but instead focus on elevating their USPs and recreating them in the digital world.


As is the case with Behler-Young, traditional HVAC


companies can play on their strengths in offering a personal approach to customer service and years of expertise in the sector, which can never be matched by new disruptors.


Make small steps and incremental changes


To most HVAC organisations, the prospect of a fully blown digital transformation is daunting. It is perfectly fine to start small and introduce incremental changes. What is most important is to start the digital journey and begin building omnichannel customer experiences that integrate across digital and physical channels. I mentioned customer service as a potentially


strong differentiator for HVAC organisations. Offering features that complement the in-person experience to extend this online is a good starting point for further digital transformation. For example, allow customers to use online forms


to request quotes for services, or offer an online portal for settling invoices. These features will provide flexibility for the customer and bring the convenience they are looking for. Optimizely research has shown that 39 per cent of B2B buyers want to self-serve and access pricing without speaking to anyone. Investing in self-serve capability and offering other digital touchpoints for


12 July 2022


customer service does not only help meet customer expectations but also saves money, streamlines the business and makes it more efficient.


Build a digital platform for the future


Every HVAC organisation is facing disruption as digital natives build on successes in B2C and move into the relatively traditional bricks-and-mortar HVAC sector. As noted by McKinsey, digital transformation is not easy but the alternative is clear – declining market shares, revenues, and profits. Change should not be just about responding to an


external threat though. Having a strong digital offering will set your business up for long-term success and allow it to become more customer centric. Complex, multi-brand businesses such as MORSCO (a US HVAC distributor) have seen huge growth opportunities and efficiency savings through implementing a consistent strategy for digital across a traditionally fragmented internal technology and commercial landscape. Structure brings more flexibility, the ability to


respond to further unexpected changes, and adapt to shifting customer expectations in an agile way. Few could have predicted the pandemic, and nobody


knows what the future may hold but by taking your first digital steps today, you will be set up to better serve your customers tomorrow.


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