Analysis: France installed AV market survey13 April 2016
How is the installation market faring in Europe’s second-largest economy? Our latest country survey finds out.
According to the OECD, the French economy is expected to show gradual growth this year and next, due to the combined effects of lower oil prices, reduced fiscal contraction and sustained monetary stimulus. Looking at the country’s GDP and budget deficit figures, both show a small improvement compared with our last survey of the French market (in the June 2015 issue); and – while we wouldn’t argue a definite cause and effect – our respondents seem more upbeat about the prospects for their own businesses. Around three-quarters believed that revenues would grow within the next 12 months – while around 50% held the same view last time around. However, the vast majority of respondents felt that the market itself would be flat over the same period – so most of our survey felt that their companies would be outperforming the market.
Asked to pick their most pressing business concern from a list of six, just over half the survey chose ‘clients going for lowest price rather than best value’. Regular readers of these national surveys will find this a familiar concern: our French respondents bemoaned the way that this practice inevitably damages margins, while one noted that prices tend to be pulled down by certain products. (‘Falling margins’ was separately selected by a minority of the sample as their biggest worry.) Another concern cited was ‘being undercut by competitors’ – with one respondent singling out competitors from the Benelux countries as being responsible for this.
So, not surprisingly, when we asked what our respondents would like to change about their market if they could, customer behaviour came top of the list. “[I wish] that customers would buy sustainable technical installations and therefore quality, rather than buying a price” was a typical comment here.
Our survey also asked for advice to companies entering the French market – both manufacturers and integrators. One integrator offered what must be the shortest piece of advice for a manufacturer we’ve ever received – “Novelty” – while another stressed the importance of pre-sales advice and technical support. There was possibly some reluctance on the part of our integrator respondents to offer advice that might help potential competitors – even theoretical ones – but consultants suggested that integrators joining the French market should concentrate on following up leads, providing a high-quality service and ensuring guaranteed stock levels of key components.