HVAC MARKET OPTIMISM AMIDST COVID-19 OUTBREAK

Dear HVAC community,

As COVID-19 continues its impact, it’s understandable to shift through various emotional states. But, by understanding our consumer landscape, we are managing to remain optimistic about the future of the mini split market.

Communities, industries, and businesses are certainly feeling the weight of the coronavirus’ economic effects. Here in Florida, we’ve been hunkered down for a while already with schools and colleges closed, mandated work-from-home arrangements, and everything from sports and entertainment events to planned trips and church services canceled.

When the news is all doom and gloom—as it has been since the beginning of the outbreak— it can be hard to stay positive and feel in control when the future seems so uncertain. Staying informed at this time is crucial.

So, we would like to help keep you clued into what’s happening across the consumer landscape: which factors are influencing, how people are reacting, how consumers’ behaviors are shifting, where they are turning, and what this all means for our business.

Reasons for Confidence in the Mini-Split Market

1. Increased amount of time spent at home

Based on recent research, 95% of consumers say they’re spending more time at home**. As people become used to the routine of staying indoors, there is likely to be a greater need for certain items, improving their home comfort. Air Conditioning is becoming more essential, especially during the upcoming summer season. Due to economic uncertainty, homeowners are looking for energy-efficient options that won’t break the bank.

2. Home additions are becoming a new trend

The coronavirus outbreak has forced sports and entertainment facilities to temporarily close their doors. People are quickly tiring of limited in-home activities. For example, some are converting their garages or planning home additions to be used as fitness and gym areas, or adopting habits like creating soundproof home theater rooms. All these newly created living spaces require air conditioning. Mini splits can be a perfect solution: energy saving, economical and easy to install. Portable AC units can also be an option as a temporary add-on to the existing HVAC system.

3. It’s a perfect time for renovating business premises

Many restaurants, cafes, and small businesses were previously unable to find an opportunity to renovate their premises, fearing loss of business income. During this forced break period, the opportunity to upgrade presents itself, and this includes air conditioning systems. While the reopen time is uncertain, the moderate investment in a mini split system could be a wise decision.

4. Family budget non-essential expenses shift

Due to shelter-in-place orders, some non-essential family expenses were immediately cut, including eating out, entertainment, non-essential shopping, travel, and gym memberships. Those families who were dedicating a big chunk of their budget to out-of-home activities might now consider prioritizing home improvement investments instead.

5. Unexpected financial aid

The US government announced radical packages, including unemployment benefits and stimulus checks. The direct stimulus checks are expected to be deposited before summer hits the US. While big purchases are postponed, home improvement can make headway. This aid will either help alleviate essential financial pressures or serve as extra, unexpected income, increasing the likelihood of home improvement spend.

6. Late tax refund & consumers’ plans to spend it

The tax filing deadline extension from April 15 to July 15, 2020, will shift tax refunds into the summer period. While consumers historically planned to spend refunds on debt or savings, the current circumstances—forcing people to spend more time at home—suggest an increased percentage of people will decide on home improvement. The timing of the refunds will increase the chance that the funds will be spent on air conditioning as a part of home improvement.

Taking Action for the Upcoming Season

Taking all of these factors into consideration, we are optimistic and well-prepared for the upcoming season at Comfortside West LLC - Cooper&Hunter:

• We strongly believe that consumers' behavior change due to the COVID-19 outbreak will result in mini splits category growth vs. central air conditioning systems.
• Cooper&Hunter products' positioning and price niche between “big names” and “no names” brands is a golden spot during these times. We are sure that many distributors will be looking for more economic product lines to satisfy changed demand, without compromising product quality & service.
• With a current full stock of products and parts, our production orders have not decreased but, on the contrary, have increased by 20% due to the expectancy of market shortage during high season.
• We haven’t stopped working. We’re keeping our office & warehouse fully operational and ready to support new orders and service existing installations.
• Not a single person was laid off at this uncertain time. On the contrary, we hired an additional technical support staff member to ensure multi-lingual customer support (English, Spanish, Mandarin, Russian, and Ukrainian).
• Minding social distancing and canceling pre-planned on-site trainings, we’ve invested in additional technical equipment to provide online trainings, including video broadcasting of the tear-down practice & troubleshooting of our mini split systems.

All the best,

The Cooper&Hunter Team