What are you doing about DIY/online HVAC equipment sales issues?

Michael Albertson: We require each dealership to have someone complete training on our variable capacity 7 Series equipment before they’re even allowed to purchase it. This helps ensure our customers are fully equipped to exceed consumer expectations and think it reflects the dedication levels of a WaterFurnace dealer. It also helps eliminates the market for DIY installations and online purchases of new WaterFurnace equipment.

Gary Bedard: Technology brings both new opportunities and presents new challenges. Online commerce is important, and we recognize that many companies will find innovative ways to grow their business using the Internet. We manufacture an applied product. As good as Lennox products are, proper installation and service is vital for a product that can last 15-20 years or longer. Some of the online business models we’ve seen do not include installation, which could create an issue.  The homeowner, the brand, and the industry in general are better served when a product that requires professional installation is in fact installed by a qualified HVAC technician, not essentially drop-shipped to a homeowner. Our terms and conditions of sale require that those who purchase our products resell them with professional installation included. The sold price must include installation. When sales, including Internet sales, do not include professional installation, this in violation of the terms and things like warranty coverage are void. We try to keep abreast of what we see out in the market and handle violations directly as they come up.

Gary Clark: We do not support DIY online purchases of HVAC equipment.  We clearly state that the warranty on any equipment purchased on the Internet, from someone other than the installing dealer, is not valid. HVAC equipment must be installed by qualified personnel.  That’s why many states license HVAC contractors.

John Galyen: We continue to support traditional distribution channels instead of DIY or online sales channels because we recognize the role trained reps and wholesalers play in delivering value to the contractors, but we work with our channel partners to develop the tools and systems to needed to support their customers.

David Kesterton: Online HVAC purchases/sales have many issues. There are safety, installation, and operation issues, among many others. This is not a simple business and we believe to ensure a consumer receives the best installation they should buy from a local dealer who will stand behind their work.

Mark Kuntz: It’s a serious problem for us. In many parts of the world it’s the norm for a consumer to go to a retail store, pick a ductless system up, put it in their shopping cart, and walk out the door with it. And who knows what they do to get it installed. There are any number of retailers who would like to do that with us here to whom we say no. We turn down those kind of opportunities all the time. That’s not our model, that’s not the way we believe the consumer is best served. We believe they’re best served by a professional installation by a licensed and certified contractor.

We have a great program going on with Home Depot, where a consumer can see a system or a demo or model of the system in person, but the next step is to get a certified professional out to size it, price it, and ultimately install it. That’s the model we are going forward with. Online sales or DIY sales directly to the consumer are not part of our program.

David Meyers: Carrier does not endorse the sale of our products online, direct to consumers. We sell our products through a trained dealer network supported by an experienced distribution organization.

In addition to regular HVAC training, Carrier takes our commitment to supporting contractors even further with our Carrier Energy Experts program. Unlike other energy auditing companies, these experts’ knowledge goes far deeper than insulation and windows. The Energy Experts know the ins and outs of the entire HVAC system — including the air conditioner, furnace and ductwork. They know about whole-home performance from the floorboards to the roof shingles, and every inch in between. The extensive high-level training that Carrier Energy Experts receive enables them to provide Carrier 360° home evaluations using state-of-the-art home performance technology, which can ultimately help homeowners feel more comfortable in their home, while lowering energy bills and even improving air quality.

Chris Peel: Rheem supports the “traditional” business model for the sale of Rheem HVAC products to consumers, in which a trained and licensed HVAC contractor makes sales directly through a personal home inspection and onsite evaluation of the HVAC application. We have a section on our website for consumers that explains why HVAC products are unlike most other consumer goods available for sale on the Internet; this section notes the significance of a site visit by a trained contractor. We emphasize that an in-person home visit by a professional contractor is the only way consumers can ensure they purchase safe and efficient equipment that will last for a long time. We also let consumers know that Rheem published warranties are not applicable for any HVAC equipment manufactured by Rheem that has been sold direct to the consumer via the Internet or auction websites.

Ed Purvis: The industry has been trying to deal with a very challenging set of competitive channel dynamics for a number of years. For a while it had more to do with professional channels vs. retail channels. When you look over the last five or 10 years and try to see what happened there, I think the conclusion has been that the retail channel has played a role, but I bet if you asked some of the OEMs, it has not gone as fast as they would have thought, and the professional channel has managed to continue to remain strong.

In my opinion, it’s because the professional channels — HVAC distributors and strong contractors — continue to offer a value that the retail channel has not been able to duplicate. What about do-it-yourself, or online? I think the same set of parameters will play out. There will be a competition between the professional channel and the value it can deliver, versus the do-it-yourself and online channel and the value it delivers.

For certain products, certain components, we’ll likely see some robust growth in online and do-it-yourself, driven primarily by using electronics to make it easy for homeowners to do some of this work on their own. The best example I can think of is thermostats. In five or 10 years you’ll see easier-to-install thermostats with built-in “app” ability to make it easier for homeowners to install. But I would not forecast that you’re going to see the demise of the professional channel. This industry is and will remain an “applied” industry model. These products must be properly installed and properly maintained in order for them to work that way they should. As long as that’s the model, the professional channel is going to play a key role. Although the do-it-yourself/online channel will grow in selected instances, you’re not going to see a massive switch.

I think the answer is, “Game on.” Distributors and contractors both add value to the professional channel, and contractors who use that value to optimize the homeowner’s experience will have enriched relationships with customers that allow them to grow.

Mark Wagner: Trane dealers have the exclusive rights to provide and install Trane HVAC equipment to homeowners and we do not offer these products through other channels. Some of our connected home products are much better suited for the computer savvy and DIY consumer groups and we offer these products through dealers and on the internet.

Scott Weaver: It’s certainly a new channel for potential competition. We’re encouraging manufacturers to come up with an Internet policy, and adhering to those policies. Right now the policy says if you buy the product online, the manufacturers warranty is void. Policies like that are helping to drive the business through the channel that also includes the services of a professional contractor.