Number One & Growing Fast
By Bill Sendelback
Decades ago an electric fire in the U.S. was an inexpensive wood log set with a 40-watt light bulb illuminating rotating red cellophane “flames.” They were ugggly! Many were sold over the years, but few customers truly thought they simulated a real flame. In the early ’90s things changed. There was a revolutionary British invasion of electric fire technology; in the UK, that technology had increased annual sales of electric fires from 400,000 to 600,000 units.
Initially, acceptance of this new technology in the U.S. was slow coming, but gradually the old red cellophane and light bulb models went away. Sales of the new electric fires slowly increased every year, and with more manufacturers entering the market and improvements in flame technology and features, electric fireplaces grew to be by far the largest and fastest growing hearth products category.
Industry shipment numbers for electric fireplaces are basically meaningless; they indicate only a miniscule percentage of actual sales since the largest electric fire manufacturers don’t report their sales numbers. However, the consensus among electric fire manufacturers is that annual North American sales now top two million units and are steadily growing. Industry sales figures do verify a growth trend, showing a 32 percent unit sales increase in 2013 but down eleven percent through the third quarter of 2014.
Assuming two million electric units were sold in 2013, and assuming a very conservative average retail sales price of $500 each, the retail value of electric fires sold in the U.S. in 2013 was $1 billion. Assuming an average 50 percent discount, manufacturers’ total gross sales for electric fires totaled $500 million.
Manufacturers Expand Electric Lines
|Napoleon Ascent 40.|
Napoleon Fireplaces also has expanded its line, adding a 38-in. vertical Azure model featuring a backlit surround and 33- and 40-in. mantels. Other new Azure wall-mount, linear models are the 42- and 50-in. sizes. Napoleon's new Ascent Electric is available in 33- and 40-in. models, offering the look of a traditional masonry fireplace.
|WM-SLIM-54 electric fireplace.|
Amantii just added eight more models to its line, expanding its Deep series to now include 40-, 60- and 88-in. models along with the original 50- and 72-in. models. These 12-in. deep, built-in models have no glass front and allow drywall up to the opening. Amantii also has added five new 6-in. deep built-in models to its original 4-in. deep Slim clean-faced line.
The Sierra Flame line, a new company owned by the owners of Amantii, sold through two-step distributors, is similar to the Amantii line, featuring no glass front for the look of a gas fireplace insert, and offering different fronts and flame colors from that offered in the Amantii line. Included in the Sierra Flame Slim series are three new 4-in. deep wall mount models.
Classic Flame by Twin Star International
|SpectraFire Plus with Simmons Media Mantel.|
Classic Flame by Twin Star International has added Bluetooth technology to its extensive line, and personalized flame effects to its SpectraFire Plus models, allowing five different flame patterns, five degrees of flame brightness and five different flame colors, offering 125 different flame effect combinations.
Dimplex North America
|BLF-50 electric fireplace.|
Dimplex North America has enhanced its Opti-myst product with its Pro series, a “zero clearance” appearing built-in model in either vertical or horizontal formats. Dimplex's Opti-myst can also be “direct plumbed” to eliminate the need for periodic refills of its water container used to produce the simulated smoke.
Of special interest for 2015 will be Dimplex's BLF-50 built-in linear model and its “Comfort Safe Heating” ceramic heater, allowing steady heat at 11 percent less cost. Other new models are its Jett Media Center, Mimico Fireplace Package and Willowridge Wall Mount.
Hearth & Home Technologies
Hearth & Home Technologies has broadened its SimpliFire electric line, adding new linear and media cabinet options. Its new linears have viewing areas of from 38- to 94-in. and its media cabinets can hold up to a 65-in. television.
Innovative Hearth Products
Innovative Hearth Products has added 54- and 60-in. linear models to its Astria line for either wall-hung or built-in installations. These models feature remote adjustable modulation between multiple flame colors and touch screen operation.
Outdoor GreatRoom Company
|Gallery electric fireplace insert.|
New from Outdoor GreatRoom Company are 36- and 42-in. electric fireplace inserts designed to retrofit into zero-clearance fireplaces. These models are in response to hotels, restaurants and resorts wanting cooler glass fronts on its decorative fireplaces.
Portland Willamette offers custom-made electric fireplace inserts in 24-, 26- and 30-in. sizes. With custom surrounds, the Cascade model features doors and a top filigree; the Paulina has doors with a built-in filigree, and the Coberg features filigree with no doors. Designed as inserts, these models can be used as wall mounts or as stand-alone models.
Vermont Castings Group
|LG Linear electric fireplace.|
New from Vermont Castings Group are its 50- and 70-in. linear Aspect models in both its Majestic and Monessen brands, and its 33- and 36-in., built-in Allure-Fire models, also available in both brands. The Allure-Fire units also are available as cabinet models.
To put that in perspective, total wood appliances, including fireplaces, stoves and inserts, sold in 2013 were 206,409 units totaling $151 million in manufacturers’ gross sales, with a unit sales increase in 2013 of 15 percent. Total gas appliances sold in 2013, again including fireplaces, stoves and inserts, were 462,042, totaling $339 million in manufacturers’ sales with a unit sales increase of 31 percent.
The bottom line is that electric fire units sold in 2013 totaled more than three times the combined total units of both wood and gas appliances, and saw a greater Y-T-D percentage sales increase. No wonder manufacturers are optimistic about this category.
“Our sales are very strong this year,” says Brian Richards, president of Amantii. “Sales in the U.S. are up tremendously, and Canada is also doing well. We’re seeing growth in the East and in the Midwest.”
“Our sales have been growing year after year,” according to Brian Brigham, director of Marketing and Public Relations for Classic Flame by Twin Star International. “It may not be a gangbuster year, but we’re expecting record breaking sales this year – 2014.”
“We’re doing very well,” says David Lacky, vice president of Marketing and Market Development for Dimplex North America. “Our U.S. market is very strong, and we like where the consumer is going with their interest in electric models.”
“Electric fireplaces is a growing product category for hearth dealers and for us,” says Jess Baldwin, senior vice president of Sales and Customer Service for the Vermont Castings Group. “Our opinion is that electric is going to experience significant sales growth.”
Unfortunately for hearth retailers, the vast majority of the estimated two million electric units sold annually in North America are not sold through the specialty channel. An estimated 1.25 million units are reportedly sold consumer-direct by Heat Surge through its “Amish made” newspaper ad claims.
Much of the remainder of electric fire sales are the less-expensive units sold through mass merchants and their websites. The “cash and carry” and “plug and play” features of electric fires certainly fit into the sales model of mass merchants. But as specialty retailers have long found with gas logs and grills, also sold for many years through mass merchants, more and more specialty dealers are finding sales success with electric fires by selecting the high-end, full-featured models from dealer-oriented manufacturers.
“Specialty retailers are a tough crowd,” says Kim Hammill, director of Electric Fireplaces for Napoleon Fireplaces. “They are used to selling real fires, but they can sell both, and they’re starting to see that. Hearth retailers can display electric fires turned on and running; mass merchants usually do not. Plus consumers are looking for more features and want a trusted brand that they can only get from hearth dealers.”
“Hearth dealers are more accepting of electric models as they learn to offer stuff the mass merchant won’t get into,” says Amantii’s Brian Richards.
“Hearth dealers don’t realize the same dollar volume with an electric sale, so they have incentives to sell a gas model instead,” according to Outdoor GreatRoom’s Ross Johnson, “but they are now seeing a positive change in the mindset of consumers toward electric fireplaces.”
“Hearth dealers are not as accepting of electric as we would like,” says Vermont Casting Group’s Jess Baldwin. “For most dealers, installations are a profit center, and electric models offer little opportunity for installation.”
In an effort to increase its penetration into the network of hearth dealers, Dimplex North America has formed a dealer council of 12 of its dealers from across North America to learn what it must do to gain more specialty retail business.
As more hearth dealers have added electric fireplaces to their offerings, homebuilders also have become more serious about these products. An increasing number of builders has found the lower cost and ease of installation of electric
fireplaces very attractive; additionally, the aesthetics of a fireplace without the heat is especially well-received in the Sunbelt.
“We’re seeing more homebuilders specking electric models,” says Napoleon’s Kim Hammill. “These models are cheaper to install, but builders are looking at mid-range product, not the low- or the high-end.”
“We’re seeing builder interest particularly in areas where heat is not really needed,” according to Outdoor GreatRoom’s Ross Johnson. “They don’t have to worry about heat, and their only expense is a 110-volt outlet.”
“Yes, builder business is growing in electric models, but electric won’t soon replace gas and wood models with builders,” warns Vermont Casting Group’s Jess Baldwin.
There’s also another market in which electric appliances are taking sales from wood and gas fireplaces: the hospitality market – hotels, restaurants and resorts. “Our dealers are doing a lot of commercial business,” says Modern Flame’s Tom Foy. “They just want simple, good-looking models, many without the heat feature.”
“They just want the looks without the heat,” adds Ross Johnson.
Although electric flame effects have become much more realistic, electric models are moving away from simply trying to replicate a real fire. With just the push of a button or the touch of a screen, flame effects can be controlled, including color, flame brightness, pattern, speed and ember cycle pattern. At least one high-end model offers simulated smoke, sparks, crackling sound and a variable ember bed. Colored
lighting abounds, whether in the firebox or behind the surround. If it isn’t a feature now on an electric fire, it soon will be.
As with gas fireplaces, contemporary styling and linear designs continue to grow and dominate. Traditional-styled electric models “have fallen back into the mass merchant,” according to Ross Johnson. “A growing number of new aesthetics and features are appearing on electric models aimed at the specialty retailer.”
“While linear design is continuing to grow, different shapes are becoming more popular, like rectangular and square,” says Glenn Thomson, vice president of Sales and Marketing for Innovative Hearth Products. “Recessed in-the-wall models are becoming more popular, and now look more like wall art. Dealers and consumers are asking for more whistles and bells, leaving the simpler models for the mass merchants. Lighting features are getting more unique, while prices are not an issue if the customer sees what they want. It’s more about a look people are attracted to – not a fireplace per se.”
“While wall-hung models are still a growing trend, wall recessed models have been growing better,” according to Tom Foy of Modern Flames. Foy also sees outdoor models as a growth area “down the road” with the continued growth in Outdoor Rooms.
“For us, wall mount units and media cabinets are experiencing the most growth,” says Brian Johnson of Hearth & Home Technologies. “And we’re seeing a lot of interest in more contemporary styles like linear wall-mount units. At the same time, there’s still a place for traditional styling like in our cabinet models.”
“Electric fire technology is evolving quickly,” according to Amantii’s Brian Richards. “The components have been the weak link, but today’s components, like the CP control boards, in models made for the hearth dealer are more reliable. That’s not what you find in mass merchant models.”
It’s the changing demographics of today’s North American market that are calling the design shots on electric fireplaces, and most manufacturers are well aware of this.
“We’re seeing a generational change with electric models,” says Ross Johnson. “Today’s younger generations look at things differently than we do. It’s kind of like the early days of gas fireplaces when they were not thought of as ‘real’ fireplaces by earlier generations.”
“We’re living in a digital generation as evidenced by the consumer demand for more whistles and bells on electric models,” says Jess Baldwin. “Today ‘more’ is more attractive, like today’s telephones. Every generation of smart phones has more features, trying to incite that ‘Gee-whiz’ factor.”
Baldwin also points out that in the past most everyone moved to the suburbs, but many of today’s Millennials are moving back to the cities into smaller places, perhaps in high-rises. “They still want a fireplace,” he says, “but their idea of a fireplace is different than ours. And these new metro apartments and condos make venting very problematic, a perfect scenario for electric fireplaces.”
Classic Flame is taking consumer research to the next level to keep its electric models ahead of consumer demands. Included is “a lot of hardcore market research,” says Brian Brigham, such as focus groups and studies by the Kellogg School of Business. “Technology is the driver today, with smaller electronics allowing a cleaner, more contemporary look yet a lot more technology options.” Along with Classic Flame’s emphasis on its line of cabinetry and mantels, the company also does extensive consumer research on home furnishing trends.
“Electrics are not a flash in the pan,” says Ross Johnson. “Dealers need to deal with manufacturers and brands focused on hearth dealers and then select specific products that fit their market.”