Despite challenges, the retractable shading industry remains optimistic about the steady growth in consumer awareness and sales.
By Holly O’Dell
The retractable awnings and shades/screens industry comprises many layers that make it an attractive market, with natural appeal to consumers, yet it’s not without its intricacies. Buyer awareness has steadily progressed in the last decade, but manufacturers and dealers know they have to find ways to further penetrate a market that remains sometimes problematic. Like other industries that target consumers’ discretionary dollars, retractable awnings, shades and screens have encountered obstacles in the midst of economic uncertainty. What’s more, while retractable shade products have proven their role in energy savings, they don’t yet have a “green” rating system (for example, ENERGY STAR® for windows) or qualify for tax credits.
Still, industry insiders remain optimistic about the ongoing growth of retractable shading solutions. We asked our sources to share their insights into how the market operates, unique challenges, opportunities for fabricators and what it takes to generate more consumer interest in retractable shading solutions.
Understanding the market
In its most basic form, the supply chain for retractable awnings and exterior rolling shades and screens involves a company that manufacturers the products, then distributes them through a dealer network. But the continuum has many nuances. For example, some manufacturers produce an inventory of off-the-shelf products, while others customize awnings and screens based on dealer requests. For its part, Durasol Awnings Inc., Middletown, N.Y., is vertically integrated, engaging in different parts of production, and manufactures both finished awnings and awning components.
Sunair® Awnings and Solar Screens in Jessup, Md., is a manufacturer that has several roles in the supply chain. The company, which operates plants on both the East and West coasts, offers three distribution channels: a direct retail sales force in the Maryland to northern Virginia corridor; a nationwide dealer network that sells to the retail customer; and wholesale distribution of components and subassemblies to independent, localized manufacturers in the U.S., Mexico and the Caribbean.
Some dealers choose to carry several types of brands. “We have three or four different suppliers we work with all the time, and that allows us to pick whatever product we think is right for that particular situation,” says Ben Skoldeberg, president of Texas Sun & Shade Inc. in Austin, Texas. “We are strictly retail, and work with a lot of end users, as well as designers, architects and builders.”
Most often, manufacturers send their distributors retractable products that are ready to install, but in some instances, dealers—especially those who make stationary awnings—may want to try their hand at the product. “Some of our dealers prefer to assemble the product themselves, so they buy all the components from us and make their own awnings,” says Alberto Tanzi, president of Corradi USA Inc. in Carrollton, Texas. “Those who deal in high volume, as well as those who want to control the lead times to their customers, especially during the peak summer months, find it more convenient to invest in components, whereas the smaller dealers, or those that prefer to concentrate more on the sales and marketing aspects of their company, find it easier to buy a complete product so they do not have to stock anything.”
Whether or not they choose to assemble retractable awnings, fabricators of traditional awnings are at an advantage when serving as a dealer. “Everybody should be out there looking to diversify,” says Wayne Davidson, vice president, new business development for Rainier Industries Ltd., Tukwila, Wash. “We can manufacture them, and they make a profit. They don’t have to make the awnings, and they can use their staff to do other projects on the manufacturing side.”
It didn’t take long for Glawe Awning & Tents of Fairborn, Ohio, to see that in their operations, purchasing ready-to-install awnings made better business sense than fabricating them. The company, which has been a retractable awning dealer for 30 years, initially purchased the frames without covers, thinking it would be more cost effective to fabricate the awning covers within its own facility. “Once the covers were made, they still needed to be installed on the retractable frame and then delivered to the customer’s house for installation,” says Bill Hughes, sales representative for Glawe. “We soon determined that the additional labor to install the covers on the frames offset the costs of fabricating the covers in-house.” After a few seasons, Glawe switched to buying the retractable awning as a ready-to-install package.
Most industry professionals say that retractable awning fabric lasts anywhere from eight to 15 years, but when the time comes, fabricators can create revenue through fabric re-covering. “It’s easier to re-cover a retractable than it is a fixed one because it’s only attached at two points,” Davidson notes. “You remove the cover and put the new one back on. It is a pretty quick process.”
“When the application initially calls for stationary awnings exclusively, fabricators would be well-advised to offer solar screens and shades to attach to their stationary awning,” says Jim Wills, director of sales at Sunair. “Clients love the combination.”
Retractable awning dealers promote a host of benefits to their customers: comfort; glare reduction; blocking harmful UV rays; and fade protection for window treatments, furniture and carpets. For homeowners investing in outdoor living spaces, retractable shading solutions are the right fit. “The market has matured a bit, and the growth that we have seen is likely related to the growth in purchases of high-end barbecue grills, exterior-rated televisions and a finer level of patio furniture,” says Earl Cornelius, national sales manager of Insolroll® Window Shading Systems in Louisville, Colo., which manufacturers retractable exterior shades and screens. Screens, of course, take the outdoor living advantages a step further, by keeping away annoying insects.
Energy savings is another important advantage promoted by manufacturers and dealers. “The general public does not seem to know that if you stop the sun from hitting the glass of the house, that’s when you achieve the most efficiency,” Tanzi states. Interior shades and blinds can provide shade and UV protection (in addition to aesthetic appeal), but for preventing heat gain inside the house an exterior product is more effective.
Fortunately, the industry has the numbers to back up its energy-efficiency claims. A 2007 report commissioned by the Professional Awning Manufacturers Association (PAMA) quantifies the energy savings possible through reduced direct solar gain through windows. In fact, consumers in some climates can save between 20 and 25 percent in cooling costs by having an awning. Furthermore, window awnings can reduce solar heat gain in the summer by up to 65 percent on south-facing windows and 77 percent on west-facing windows, according to the U.S. Department of Energy.
PAMA also is working with the National Fenestration Rating Council (NRFC) to create a process for rating awnings for energy savings, but there have been a few challenges. The NRFC “is a joint industry/government consortium dominated by the window companies, and they are opposed to any rating system that would allow a consumer to evaluate how to best spend their money if there is an alternative to window replacement,” says Don Smallwood, president of abc Sun Control LLC in North Hollywood, Calif. “We have made progress but we are not there yet. It takes a lot of money, patience and persistence.”
In addition, motorization plays a big role in the retractable awnings and exterior shades market. With the touch of a button, homeowners can extend and retract the awning. Motion control can be integrated into home automation systems; units can be equipped with automatic sensors that retract or extend the awning based on wind speeds or the amount of sunshine.
Most buyers opt for some sort of motorization. “While there is some limited demand for manual retractable awnings, over 90 percent of all our awnings are sold as motorized units,” says Alan Pedersen, director of sales for Durasol Awnings. “Our research indicates that motorized awnings tend to be utilized by consumers over five times as frequently as manual awnings, simply because of how easily they operate.”
Although IFAI market research estimates that the annual growth rate for retractable awnings is 15 to 20 percent, manufacturers and dealers still face challenges in the marketplace. Perhaps the biggest roadblock today is the economy. Foreclosure affects one out of every 200 homes, and new construction continues to lag. In July, the National Association of Home Builders reported a slowdown of remodeling due to economic uncertainty, although activity is still higher than it has been since 2007.
Despite the statistics, opportunities do exist for growth. The 2011 American Society of Landscape Architects (ASLA) Residential Trends Survey asked residential landscape architecture professionals about the estimated popularity of various design elements for the year. Nearly half (49.6 percent) noted awnings (including retractable) in the survey, up nearly 7 percent from 2010.
The subject of price weighs on the minds of many consumers. “One of the biggest misconceptions is that people will see a boxed awning at Costco, and then when they call the dealer, they can’t believe it costs more than $99,” Davidson says. “That’s like saying that all cars should be priced the same as a Kia. They don’t realize that when you step up in quality and benefits, the price will also go up.”
“Price point will always be a concern,” Cornelius adds. To that end, Insolroll offers a range of solutions, from entry level to high end. “When it comes down to it, regardless of your income level, you want to be able to sit comfortably on your patio.”
To overcome buyers’ pricing hang-ups, Tanzi suggests selling retractable shading as an investment. “The retractable awning can be expensive up front, but when you look at the amount of years it will be in service, it’s affordable in the long run,” he says, adding that awnings pay for themselves in a short period of time thanks to the energy savings they create. “This is particularly important for dealers who choose to sell high-end, high-quality products, which for lack of education and knowledge by the general public are unfortunately often compared to mass-produced cheaper and much less reliable alternatives.”
In terms of making a sale, Smallwood cautions dealers to do what’s best for their customers. “In these hard economic times, dealers are focused on making a sale, and sometimes they will sell something that is not an appropriate application.”
To increase market share going forward, retractable shading manufacturers and dealers are focusing on key initiatives. Consumer education remains a top priority. “Educating the general public on how shades and awnings work with the environment, not conflict with it, will go a long way,” Wills says. “As we enter a more energy cost-conscious era, and where one-time purchases need to last a long time, good quality sun-control products can greatly reduce cooling costs while providing more comfort and a better quality of life.”
As such, it’s important to get the word out. Industry insiders believe that can be accomplished through tactics such as national advertising campaigns in magazines or appearances in home improvement programs on television.
Diversification is another critical factor for success. For example, manufacturers and dealers have expanded their businesses to include retractable screen products—whether they serve as an auxiliary exterior shading source or feed into a track system to double as insect protection. Especially when combined with retractable awnings, these screens can extend the outdoor season and expand outdoor living spaces. This combination, says Pedersen, “represents a less expensive alternative to costly sunrooms.”
Skoldeberg, for one, has seen a shift in his business in central Texas, where rollup screens are becoming more popular than retractable awnings. And he expects the trend to continue, at least in his part of the country. “A lot of the customers we deal with build porches or elaborate outdoor living areas that are already covered,” he says. “That’s great, but come four o’clock, the sun is coming in underneath the cover, and you still cannot use that area because it’s 110 degrees there. A lot of people will opt for a screen that goes up and down.”
Adds Davidson, “Anytime you have an awning you have a potential screen sale, and anytime you have a screen sale, you have the potential of an awning sale. They really complement each other. As products develop and manufacturing costs come down, the market will continue to grow.”