Appliance Showroom Creates New Customers, New Off-Season Revenue Stream

“The fireplace? The heart of the home itself.” — Frank Lloyd Wright

As home improvements continue to outpace new home construction, home remodeling and addition projects were up nearly 10% in 2017, according to the American Institute of Architects (AIA). AIA’s annual Home Design Trends Survey found that in 2017 the outdoor living room topped the list of most popular special-function rooms as reported by nearly 40% of respondents, outranking mud room (23%), home office (16%), in-law (7%), sun room/3-season porch (5%), roof deck (3%), and other (9%). The survey also reveals there is more interest in home energy efficiency, up to 52% in 2017 vs. 47% in 2016, with tankless water heating gaining support pulling a 49% favorability rating in 2017 vs. only 35% in 2016.

This rising popularity among homeowners to undertake a remodel or outdoor living project, plus the growing demand for energy-efficient appliances, not only expands opportunities for propane retailers to increase revenue from the sale of gas fireplaces, hearths, outdoor living, and residential propane appliances, it also creates a revenue stream in the off-season, and increases propane gallons delivered.

In September, Hearth & Home magazine surveyed 2500 specialty retailers of hearth, patio, and barbecue products asking them to compare August 2018 sales to August 2017. Among these industry sectors, 83% of hearth retailers, 86% of outdoor/patio retailers, and 87% of barbecue retailers reported sales had increased or remained the same.

This is good news considering many propane dealers sell gas hearth products ranging from $500 to $10,000 installed, and depending on the region, some custom fireplace units sell in the $30,000 to $90,000 range. Some, such as a high-end custom four-sided gas unit, come with a hefty price tag of easily $80,000 to $90,000.

Manufacturers of hearth, fireplace, and outdoor living products continually introduce new products to stay competitive. The design trends for 2019 are moving toward more contemporary styles than traditional, in the ever-evolving home decor market. Today, even a small propane retailer can provide customers a virtual showroom through impressive online catalog galleries that prospective buyers can peruse.

Appliance manufacturers and trade groups offer helpful assistance to propane dealers in a variety of ways: co-op dollars, rebate percentage of cost for displayed units, consumer rebates and incentives, service and technical training, national and regional ad campaigns, showroom promotional materials for display, and more.

For instance, for

, the Hearth, Patio & Barbecue Association (HPBA) launched an annual campaign to focus on persuading consumers of all types that hearth products are a necessity and not an option. The Essential Element Campaign, ongoing through the end of February, celebrates how integral fire has been as an element of life — and to selling hearth, fireplace, and home comfort products. Aside from distributing important safety messages, the campaign strikes an emotional chord with how fireplaces, stoves, and heaters are at the heart of every home’s decor and ambiance. It offers HPBA members the opportunity to participate both directly and indirectly in a variety of ways that increase brand exposure, customer sales, and collective industry growth.

, national energy program manager for

, a leading manufacturer of propane tankless water heaters, remarked during the NPGA Southeastern Convention, “Rinnai is committed to supporting this industry. With 30% of global sales coming from North America, we intend to help the industry grow and will continue to partner in product innovation.” Last spring, Rinnai celebrated the assembly of its first American-made propane tankless water heater at its new manufacturing facility in Peachtree City, Ga. Peacock emphasized that the states reporting the highest appliance sales are states that offer rebates. “Rebates really do make an impact,” he explained. He also said Rinnai had extended its rebate program through Dec. 31, 2018. In some states, rebates as high as $500 are available from state propane gas associations.

. “In 2015, we decided to open a separate showroom because the demand from customers for more hearth, barbecue, and energy-efficient propane appliances was outgrowing the showroom space we had available at Brooks Gas. We wanted to be responsive to customers’ demand and to make sure they weren’t taking this business elsewhere. Top of the Ozarks has become its own successful, stand-alone business with sales steadily increasing year after year. We’ve also increased our Brooks Gas customer base from people who’ve visited the showroom.”

Brooks’ experience at Top of the Ozarks Hearth & Grill, which also sells water heaters, furnaces, and air conditioning units, reinforces the rebate success Rinnai has seen nationwide. Brooks states, “It’s no exaggeration that state and national rebate programs and other incentives have helped us immensely when it comes to selling propane appliances. Rebates and building incentives do motivate people to make a purchase. We see it nearly every day.”

With the economy doing better, he says showroom sales are up with traditional-style gas logs and fireplaces still the most popular selling products. One trend he notes is the rise of homeowners who want to purchase a gas insert to replace their wood-burning stove. “We have seen some interest in the contemporary line of linear hearth products, but the ‘log look’ is still our most popular seller. Products that can provide heat if there is a power outage are also most in demand.”

Robert Dischner, senior vice president marketing of RH Peterson Co. (City of Industry, Calif.), a manufacturer of specialty fireplace and barbecue products, sees a growing interest in fireplaces and outdoor living, too. “A decade ago, if you asked people what the top 10 things were they desired in a home, an outdoor fireplace or an outdoor kitchen weren’t on the list. Now, they’re definitely top focal points. Today, people love blending indoor and outdoor living spaces and the warmth and comfort provided by outdoor fireplaces and kitchens, patio heaters, and other ambient fire features that make it possible for a family to extend the time they can enjoy their outdoor gathering space.”

“One new trend we see gaining popularity at RH Peterson,” Dischner says, “is our Firefall feature that combines fire, trickling water, and colored lights. In 2019, we are introducing a new and improved model with additional lighting features that allows the colors behind the waterfall to be changed. These Firefall products provide a soothing sound and ambient nightlife feature. Another item RH Peterson sees gaining in popularity is our Fire Urn and Fire Bowl gas features that come in varying shapes and often are being used in multiples to create a stunning evening statement piece.” (See p. 25.)

“RH Peterson is committed to working closely with propane retailers to support them in their showroom efforts by providing generous assistance for showroom displays including live-burn appliances, point-of-purchase, and other advertising including open houses, collateral materials, and a variety of other sales and technical support.”

So what does the immediate future hold for hearths, outdoor living additions, and their propane-related products? The outdoor living market is expanding steadily, with manufacturer-level sales of patio heating products, grills, and outdoor furniture expected to grow 5% per year on average through 2021, as reported by internationally recognized research firm, Freedonia Group. This growth is due in part to the stronger economy that has seen the highest U.S. wage growth in a decade. Homeowners are making investments that not only add value to their homes, but also add to their quality of life. And, expanding indoor rooms into an outdoor gathering place opens up a smokin’ hot market for propane retailers to sell the gas-burning products that make this possible.

—Outdoor fireplaces, fire tables, and fire pits will continue to top the chart of home improvement projects in 2019. Napoleon, manufacturer of Napoleon gas grills and state-of-the-art fireplace technology, recently published its new “Hot Spots

Research Study” that reveals when homeowners are shown innovative patio and backyard living designs, their desire for an outdoor fireplace increased by 577%.

—A fireplace has become the perfect focal point for living rooms, but also bedrooms, bathrooms, kitchens, offices, lounges, bars, and entranceways. The company’s recent study also found that more than 90% of people surveyed expressed a strong desire for a fireplace in the family/living/great room.

The U.S. demand for outdoor living products (including patio heaters, fire features, outdoor cooking appliances, and accessories such as grilling utensils, umbrellas, cushions, etc.) is forecast to rise 3.7% annually to $9.1 billion in 2019. An improving economy, along with homeowners’ wanting to blend indoor and outdoor spaces to enhance personal lifestyle and boost property value, makes 2019 a lucrative time for propane retailers to capitalize on Americans’ increasing preference for hearth, barbecue, outdoor living, and more energy-efficient propane appliances.

—Andrea Young