Merchants' role in the Green Deal

on 18 February, 2011

Guest blogger Allan Durning, executive chairman of the National Buying Group says: As the green mist starts to lift and the merchant industry realises it has a number of new competitive entrants in our sector who ambitiously believe they can add value to this emerging new building products opportunity for all things sustainable and renewal, we have a clear challenge on our hands.

I know who my money is going on.

In my view, and that of many others, what our merchant industry has and the independent sector in particular offers, is professionalism and an unparalleled level of product and application knowledge. This is something the sheds and the various other direct selling organisations will find hard to mimic.

What we are not good at generally speaking is marketing communications to Joe Public, the end-user. The evidence emerging from the Builders’ Merchants Awards for Excellence, as an example, shows the emergence of a more sophisticated approach to marketing and marketing communications strategies across the merchant sector in general. It is well advanced in a number of specific independents and this, in my view, is a positive and long overdue evolution.

In short, we need to up our game and fast.

The sheds and direct sellers problem

The sheds and the direct sellers will try to corner the market and they are good at getting their message across. I recently noticed a direct selling organisation in a local shopping mall stuffing Green Energy leaflets into people’s hands. They were wasting no time to build up their target databases.

We are starting to see green strategies emerging from various quarters of the industry. Some are sponsored by trusted longstanding institutions. Independent merchants need to quickly grasp the green agenda and decide what part they will play in this much hyped opportunity.

Remember, this initiative is not entirely new. Various greening and energy-efficiency strategies have been around for a number of years, with materials like building insulation products being a key driver in the past continuing into the future.

The difference going forward is that we will have a strongly marketed government policy to consumers that is being launched in mid-2012. It will have a number of measures, perhaps as many as six or even eight in the scheme, all competing for part of that £6K subsidy – if that is what the final figure will be.

When you do the numbers, a very interesting market proposition starts to emerge.

The merchant opportunity

The switched on independents in our industry need to ensure that they are correctly positioned to take advantage of these opportunities. It’s what the nationals are doing right now.

This mixture of measures will require a different and balanced approach from merchants if the homeowner is to gain value and satisfaction from their chosen measures for their properties.

Given that direct selling organisations and others will be predating on unsuspecting consumers, who may have little or no real understanding of what would be best for their property, I believe our industry can perform a valuable service to the Green Deal by adopting the position of ‘trusted intermediary’, offering impartial product and application advice. I suspect commission-based direct salesmen will not be quite so helpful.

We can all recall mis-selling horror stories perpetrated on the general public and the Green Deal could have some issues going forward.

The supplier consideration

We also need to consider our key suppliers, who are committing resources to new product developments to meet the Green Deal challenge. We need to understand and offer our commitment and support to their existing channels to market to ensure they are not forced to contemplate extending those channels to others because we don’t get it.

In reality, the independent builders’ merchants have been dealing with the public throughout the UK performing vital activities such as brick matching and other key technical support to existing dwellings and commercial buildings. It’s just a step change to gain the knowledge and experience to evaluate measures and provide certification which will be required to access the Green Deal subsidy.

I am sure that our suppliers would rather be supporting us – their known and longstanding customers – and together maximising the opportunity that the Green Deal will offer, rather than striking up new relationships and channels to market.

We are entering into a new world where acronyms will be ever-present. Feed-in Tariffs (Fits) and the Renewable Heat Incentive (RHI) are already up and running we need to build up our knowledge and skills. Our industry institutions offer various training programmes to assist our sector move forward, let’s grasp them.

We should see the Green Deal as an opportunity to invest in and not a burden of cost to avoid.

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