The Annual 2023 AHR Expo was held this week in Atlanta Feb. 6-8th. As the largest HVACR show in the world, it was packed with hundreds of manufacturers representing over 300 HVACR product categories from Actuators to Zone Controls.
The AHR Expo is the premier show where Contractors, Manufacturers, OEM’s and Distributors in the HVACR Channel go to conduct business. The tens of thousands of attendees made it impossible to navigate all the booths in just three days (the exact attendance has not officially been released at publish time, but I am guessing there were over 40,000 attendees). If anyone attending the show got to more than 20% of the booths please send me an email, as you are superhuman.
It’s a unique event for the industry, and some consistent trends kept coming up in the conversations I had at the show with participants to consider as channel leaders-
HVACR Contractors continue to move toward digital solutions and look for ways to take cost out of their businesses
The software and service providers at the show are providing contractors automated back end services (invoicing, payments, customer financing, etc) and digital field technician support that help take costs out of the HVACR Contractor business.
HVACR Contractors continue to look for ways to find self-service digital solutions for service calls and large projects that speed up the installation time on each project.
I did not talk to a single contractor at the event who was not either short of installing technicians or was worried what would happen if they lost a technician. Contractors understand that running back to their distributor to pick up product, or having to wait to get cross reference help is taking time away from actually installing and repairing HVACR systems.
The tight labor market also means the channel in total has fewer experienced manufacturer and distributor personnel to assist contractors. Distributors and Manufacturers are also flocking to digital solutions to reduce their manual processes.
On site real time product information solutions are growing in acceptance and usage
The ability for a technician to research a part number (and cross reference that part) on their phone has been amazing to see. This change has happened so fast, that it’s hard to even realize the extent of change over the last ten years.
I had a chance to visit a number of booths with strong real time applications for the channel. I found the BluOn offering one of many digital solutions that stood out. BluOn states that they now have over 150,000+ contractor users and their app solution allows technicians to find manuals, tech specs, standard and optional controls and discuss specific equipment via chat with experienced HVACR technicians for over 45,000 HVAC models. BluOn’s approach is to provide a field technician with the tools to find what part numbers they need to replace on a unit, the appropriate cross reference part numbers, and to create an immediate order on their phone for the part they need with delivery from a distributor.
I’m not going to predict the outcome of success for companies like BluOn, but I do believe that a Field Technician having tools that speed up the ability to find the right part number, order it quickly, and have it delivered on site versus driving to your counter is the future. It is simply reducing the time needed to get product and creating more time to install products.
If you own a HVACR Contracting business if can move an hour of your repair technicians day from procuring product to installing it that is a roughly 12% productivity increase for your business. It’s a common misconception that contractors are tech adverse, but the truth is almost everyone in our industry is tech enabled today.
In looking at my iPhone as I write this article, I have three pages of apps with 24 apps on each page. I’m not sure how I feel about having over 70 apps on my phone or how exactly I got there, but I did. I am sure if you look at your phone, you might find similar results. The majority of the industry no matter what age or demographic is tech enabled, and like it or not every day the entire channel is becoming more tech savvy.
The AHR Expo confirmed that times are changing for the channel and fast. The booths might have still looked the same, and there was still a lot of handshaking and meetings going on like it was 2013, but if you look deeper it is different.
I asked a distributor friend and former coworker of mine at the show about how the distribution business is changing. We talked about how customers used to value the relationship more, they needed you for more technical support, and how when the counter door opened that customers would rush in and have to wait in line to be served. It was great to talk nostalgia and the good ole days, but that ship has sailed.
As a distributor you can still survive with a just a full service model, but the channel partners that are going to grow above market now realize that the future is a mix of customer self-service digital tools backed by appropriate full service support.
I would like to close with a story, this is one I was saving for the grandchildren. I imagine it will go something like this “When I started in distribution in 1999 our Contractor customers would flock to areas of our branch called counters. They would get their popcorn and coffee, and patiently wait to be served in line by a person….” I doubt they will stay awake until I finish the tale.
If you are a distributor and you don’t think things have changed, I would advise you to take a look at your popcorn purchases for the counter year-over-year. The amount of free popcorn you give away should be in decline – if not now, it will be in the future.
The AHR expo was a great reminder that change is happening and fast. It is time to not just consider, but adjust your B2B distribution business to meet the current and future needs of your end customers.
As always, we would love to get your feedback, so please feel free to comment below or reach out to me directly at john.gunderson@dorngroup.com
