The 2020 Mid-Year Economic Update_long

A Last Major Frontier for E-Commerce

Scott Pierson of Bluon outlines the challenges of identifying a true e-commerce solution in the HVAC industry and shows a path for any distributor in need of removing the hurdles.
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Imagine the next time you walk into Costco — all the products, on all the shelves, have been placed in simple grey boxes. Without assistance you can’t tell a toilet plunger from a tomato. So you stand in line and wait for someone to help you. After 15 mins of waiting, you get the “new guy” and realize this is going to take longer than you planned. Disappointed, you cringe through it, because you are at the mercy of someone else having the information you need to determine what product you ultimately buy.

That is the current daily reality for technicians in the heating, ventilation and air conditioning (HVAC) industry. Why? Even though technicians are the experts diagnosing which part(s) failed in a machine, they don’t have access to the information necessary to identify and purchase the relevant part without the help of a local distributor. Today, due to the fragmented nature and sheer number of potential replacement parts in HVAC, the technician is forced to rely on the local distributor or original equipment manufacturer (OEM) to identify the specific part they need to fix the system they are working on.

Growing Global Market

The HVAC market is expected to reach more than $286 billion by 2026. That growth is likely to be propelled by increased demand for energy efficiency with both new and existing systems. However, despite being such a massive and essential industry, a true e-commerce solution has yet to emerge and garner widespread adoption.

Let’s break it down. The industry has long had a digital distribution component with online ordering. But this is not true e-commerce — it is digital order entry. It lacks one major requirement of e-commerce — enabling the customer to self-select the item needed for the job without assistance.

In the current market, technicians must visit or reach out to their local supply store (or distributor) to elicit help in selecting the correct part. The majority of parts purchased are initially identified through this inefficient and cumbersome process. The scenario of using a local distributor to inform buying is not only overwhelmingly common, but evidence of the primary hurdle for the HVAC industry’s transition to e-commerce.

Massive Hurdles

That’s not the only challenge — the HVAC industry is incredibly fragmented by nature and that translates to incomplete attempts to solve for true e-commerce. Large national distributors and OEMs are investing millions each year on online ordering solutions — resulting in separate portals for specific distributors and specific brands (OEMs) that severely limit the technician’s workflow. Heading further down this path of “partial” e-commerce would only result in technicians jumping between sites and apps to complete a day’s work with no added value.  And it shouldn’t be lost that most HVAC technicians are not fans of digital platforms, so asking them to use multiple platforms every day is a fool’s errand.

The OEM and distributor’s attention toward these online order entry portals is a symptom of a larger problem. Attention has shifted away from the technician in the field and toward the contractor they work for. It’s assumed that the contractor, who foots the bill for the parts, is the ultimate customer. The contractor may have the purchasing power, but if the techs in the field do not use the various ordering systems, it is all pointless. Ultimately, if these platforms do NOT enable or encourage the technician to use them, e-commerce will struggle to gain adoption.

Removing Hurdles

Bringing true e-commerce to the HVAC industry will be a challenge without innovation. A successful solution needs to:

  • Empower HVAC technicians to quickly identify parts
  • Bring together all brands into a single platform
  • Be readily self-adopted by the distributor’s true customer — the technician

HVAC is the last major frontier for true e-commerce to take hold. And with these concepts in mind, coupled with a nuanced understanding of the industry, a successful shift is inevitable.

Scott Pierson is an executive vice president for Bluon, a fast-growing company with a mission to bring unparalleled innovation to the HVAC industry by empowering technicians. Pierson has more than 15 years of senior management experience, including over a decade of leading strategic development and plan execution at national HVAC wholesalers and original equipment manufacturers.

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