Renovations drive timber in COVID climate
Although the timber market did slow down when COVID-19 initially took hold at the beginning of the year, areas of the building market, as well as the DIY market, have since begun to pick up again despite the pandemic.
Simmonds Lumber State Manager of New South Wales, Glen Quince said he believes the timber market was initially quiet because merchants were concerned they may need to shut down every time the Federal Government made an announcement. This was when a lot of merchants stopped ordering stock and began living hand to mouth, he said.
“Our merchant customers soon realised that it is going to be business as usual and went back to reordering stock and carrying things as normal. Our customers, who deal a lot within retail, found they were very busy with retail sales, particularly with products such as decking, oils, paints and little odds and ends that people can do around the house. DIY jobs, such as building small decks around the house or a cubby house that the home handyman can complete became popular during this time,” Mr Quince said.
“Sales continued to pick up. In May they improved again and we found June was good as well, which is amazing because June is usually a little slower than normal. In saying this, our business is now more focused on the renovator’s market. The product mix we sell is skewed more towards renovators and commercial architectural sort of stuff.”
It seems that builders that deal with the architectural designed homes are travelling a lot better than the project home builders in the current climate, according to Mr Quince.
“Usually we see a trend where consumers who might be looking for a new home will then decide to renovate. This often takes around 12 months for potential new home buyers to swap to renovating their current home. However, this 12-month period soon became a two-month period with COVID-19 speeding up the situation really quickly. When we look at the jobs now coming up it seems to have remained this way as well,” he said.
During this unprecedented time, it seems that Simmonds Lumber’s point of difference is its service levels, according to Mr Quince who said the company’s market niche is to specialise in Australian hardwoods.
“We carry a very good range on the ground so we can easily service customers quickly and do job orders which are required in a few day’s turn around. The team’s extensive product knowledge also helps to build our business. A lot of customers ring us to find out where they can source a product and what we suggest for a certain project,” he said.
“We try and assist where we can even if it does not lead to a sale for us. We always try and give our customer’s options so we can answer a problem. Even though we may not get a sale straight away, we often do get a follow up phone call on something we might sell. It is more about having good staff who have good product knowledge – knowing what is going on and knowing the products they can sell and the capabilities of these products. It goes a long way.”
“We would rather say no to a sale if it is not the right product for the right application, instead of selling a product and knowing it is going to go wrong. We would try to find out what the customer is going to use the product for and then make sure it is the right product for that application,” Mr Quince said.
Competition in the market is also changing, according to Mr Quince, who said it seems competitors in the project home market are now attempting to encroach on the DIY market after the project home market began to slow.
“These competitors are trying to find new avenues to get into that are close to our business, which is making things a little bit frustrating for us. COVID has sped this competitive process up a bit. The project home or new home market home market has slowed so quickly that they have now had to diversify. Now those guys are coming into our market which we have always had a good share of. It is a challenge and something you need to be on top of,” Mr Quince said.
“Competition is all a part of business. You are always going to have opposition look at your business and ask themselves how they can make money on similar products that are a success for us,” he said.
When looking at the spectrum of product standards throughout the industry, Mr Quince said the standard of products are pretty good these days.
“Often if you have a product that is not up to scratch, you will find it will not sell for long. Customers figure it is of poor quality pretty quickly and will not buy it anyway.”
“A lot of the builders will rarely change the products they use because they are very set in their ways and they will make an issue of it if it is not up to scratch. It is very rare you find people can bring a product into the market that is five to 10 per cent below everyone else in the market. If you do get something like that it is very rare and does not take long before everyone else catches up very quickly,” he said.