The Price Is Right
By Bill Sendelback
The market for electric fireplaces is absolutely huge. Unit sales through hearth dealers are increasing nicely, while dollar sales are increasing even more as consumers look to hearth specialists for high-quality, full-featured models. The Hearth, Patio & Barbecue Association (HPBA) may no longer publish relevant manufacturer shipment numbers (and has always ignored electric models), but the consensus of electric fireplace manufacturers is that sales of electric fires top 2 million units a year, easily exceeding the total annual sales of all wood, gas, and pellet appliances.
Unfortunately, most of those 2 million units are cheaper models sold by mass merchants. But the good news is that more hearth dealers are now carrying electric fires and selling more expensive models.
Tom Krebs, executive vice president of Sales and Marketing for Innovative Hearth Products (IHP), doesn’t quite see the total electric fireplace market hitting 2 million units. He believes it is closer to 1.8 million units, still a number that overwhelms all other hearth appliance categories.
“But,” says Krebs, “the average dollars spent are up as the customer wants more features and has the money to spend on the better quality, full-featured models offered by hearth specialty dealers.” Brian Richards, president of Amantii, agrees with Krebs. “Two million units annually in North America seems like too big a number,” he says.
“That 2 million unit number is as good as any,” says Gary Kraemer, Marketing Communications manager for Dimplex North America, “but we think that figure may be even greater. However, the more important point is that the average sales price of an electric fire is going up.”
The growth of electric fireplace sales through specialty hearth dealers is evident in Hearth & Home magazine’s recent Buyer’s Guide research. Electric fires represented 2% of the 2016 sales of the average hearth dealer, but doubled to 4% in 2017.
But Joe Kuefler, Vermont Castings Marketing director for Hearth & Home Technologies (HHT), points out the continued strength of mass merchant sales of electric fires. “We estimate that only 10% of the electric fires market is going through hearth dealers and new home construction,” he says.
|48-inch SimpliFire Allusion by Hearth & Home Technologies, with multi-color flame, white ember bed lighting, and clear crystal media.|
On a more optimistic note, John Czerwonka, vice president of Hearth Sales for Napoleon Fireplaces, estimates the total North American annual dollar sales of electric fires at between $850 million and $1 billion dollars, “bigger than the sales of all wood and gas models, but with strong growth opportunities in multi-family housing starts, high-rises, and commercial installations.”
Sales of electric fireplaces in 2018 were “really strong” at Modern Flames with “about the same sales growth as 2017,” according to Kris Richardson, president. “Sales through all of our marketing channels were up, but particularly to homebuilders and through hearth-specific, online retailers. Sales to larger homebuilding projects have really boomed.”
While Richardson admits that electric fireplace sales through hearth dealers are still a small percentage of total industry electric fire sales, he sees sales growing through hearth dealers. “Hearth dealers don’t have the same consumer as do mass merchants that offer cheaper, fewer-featured models,” he says. “Customers are coming into hearth dealers asking for electric fireplaces with more features, and price is less of a concern. We’re seeing more hearth dealers getting into electric fireplaces.”
In addition to the customer demand for more features, linear models are still the big trend, says Richardson. “And larger sizes now are more popular. Our big hitters used to be from 50- to 60 inches wide. Now our top sellers are from 60- to 80 inches wide.” While Richardson sees the electric fireplace category continuing to grow, he says the market is moving from inexpensive imports to higher-end, full-featured models.
|Sunset Charred Oak electric log set from Modern Flames.|
Recent U.S. tariffs on Chinese-made models concern Richardson. “Tariffs may rise from 10% to 25%, raising prices throughout our industry,” he says.
Along with Modern Flames’ unique and patented Fusion Fire electric steam fireplace, the company is moving forward with other new technologies and new designs to be introduced at the March HPBExpo. Modern Flames recently introduced its Sunset Charred Oak battery-operated electric log set. “Using the same batteries as those used in electric cars, this is perfect for fireplaces where an electric outlet is not convenient. We are expanding this offering,” says Richardson.
While previously offering a token number of electric fireplaces, IHP now has “renewed interest in this growing category,” says Krebs. “We’re getting back in the game.”
Krebs sees the mass merchants continuing to dominate the cheaper “plug and play” segment. “But we see a growing market for more full-featured, built-in models, particularly for multi-family installations. As we revise and update our line, we will be emphasizing built-in linear models.” As regions and municipalities in North America push more “zero energy” restrictions affecting both gas- and wood-burners, Krebs sees growth opportunities for electric models. “And they are much easier for homebuilders to install since they require no venting.”
For 2019, IHP will be offering 18 traditional and contemporary electric fireplace models, with linear models from 36- to 72 inches and builder models in 27-, 33- and 36-inch sizes.
It was a “dynamite” sales year for electric fires at Dimplex North America, according to Gary Kraemer. “With double-digit sales growth, this was our biggest growth year ever. Our sales grew across all our marketing channels, but especially with specialty hearth dealers and in new-home construction. We see continued growth in high-end premium and custom products.”
Kraemer says there has been “broad acceptance” of electric fires in high-end commercial applications, and designers are leading the way. “Sales of linear models continue to be great, and our Opti-myst and Opti-V models are doing very well, but have not yet hit their stride.” The West Coast has seen “huge sales growth” for Dimplex, which Kraemer suggests is because of the growing regulatory pressures on wood and gas models in that region.
|Opti-myst Pro 1000 built-in electric cassette (CDFI1000-PRO) from Dimplex.|
Coming soon for Dimplex are custom and semi-custom electric fireplaces where one platform can be customized with a wide range of flame patterns, ember beds, lighting, and surrounds. These units will be available in linear, two- and three-sided models, and corner models.
“We’re seeing more design outlets featuring electric models,” Kraemer says. “The products are well displayed, and there is a huge growth opportunity through these outlets.” Specialty hearth dealers know the technology of premium electric fires and how to sell step-up models, Kraemer adds. “We’ve spent the last few years getting our products right for specialty hearth dealers.”
ClassicFlame by Twin-Star International emphasizes its market research to learn what consumers really want in electric models, according to Lisa Cody, vice president of Marketing. “Customers may want warmth from a room heater, but ambiance and the realism of the fire are more important,” she says. Specializing in a wide variety of furniture cabinetry housing its electric models, ClassicFlame offers customers the flexibility of being able to move its cabinet models to redecorate a room.
“Sales have been really good,” says Cody. “We absolutely will see sales growth in 2019.” Cody also acknowledges that the entire North American electric fireplace market tops 2 million units. While ClassicFlame sells through multiple channels, it sees the hearth specialty dealer as “very important” to its future.
New from ClassicFlame is its Panorama line featuring several three-sided models, a line the company will be expanding in 2019. Included will be the company’s Spectrafire technology, allowing the customer to customize the flame color, flame height, and flame pattern speed along with its 3D Flame feature to vary the flicker effect on the logs.
|ClassicFlame DuoGlow see-through electric fireplace from Twin-Star.|
Sales of its electric fires were up in 2018, especially in the U.S. says Richards. “Sales in the U.S. for us have really caught on, we’re up 30%,” he says. “Our Canadian sales were a little flat with that economy being down a bit. But our efforts in Europe have finally borne fruit.”
Amantii now has exclusive distribution in seven European countries. “When we entered this market a few years ago, we were ahead of the market. Back then that market was smaller, with more square styling, but now it has shifted to the bigger, more linear style and sizes like what we sell in North America.”
Richards says Amantii has “found a really nice, growing market” in homebuilders, and the company is promoting that with a much larger display at the upcoming National Association of Home Builders (NAHB) trade show.
The electric fires market is moving away from wall-mounted models toward built-in models, Richards says. At the request of designers, Amantii has introduced new, taller styling. “To answer this trend, we now offer our True View and outdoor Panorama XT, for ‘extra tall,’ models with 18-inch tall glass and larger log sets.” On the way from Amantii are 20 styles of a new, clean-faced Symmetry series electric fires aimed at new-home construction and the upper-end specialty hearth market. “We listened to our dealers and their customers to develop coming new technology to include new audio visual features,” he says.
|True View XL unit with Rustic log set from Amantii.|
HHT has had a “rather skinny line” of electric fireplaces, according to Joe Kuefler. “Even so, sales have gone really well,” he says. “Electric fireplaces are now one of our strongest growth categories, and more and more hearth dealers are taking on electrics. We’re now concentrating on filling out our line.”
Linear styling is “definitely growing with us and for the entire industry,” Kuefler says. “And we’re seeing more interest from homebuilders since electric fireplaces are easy to install and solve problems in some home designs where the layout makes it difficult to vent gas- or wood-burners.” Wall mounted models are big in the retail market because they can be cash-and-carry, “but homebuilders prefer recessed or built-in models,” says Kuefler.
HHT recently introduced its Allusion series of linear units in two models and 48- and 60-inch sizes that can either be recessed or wall-mounted. “These models have really taken off,” says Kuefler, “but we have more on the way.” HHT is in the process of adding 40- and 84-inch sizes to its new Allusion line. The company also is adding Scion-branded, clean-faced, linear models in three sizes than can be built into the wall. “This clean-faced feature, where you can finish the wall right up to the fireplace, is becoming more of a trend,” he says, and HHT is introducing an electric fireplace insert.
Electric fireplaces are the fastest growing product category for Napoleon Fireplaces, with sales growth in the mid-double-digits for the last three years, according to Czerwonka. “And we’re seeing more dealers embracing electric models and enjoying sales success.”
Although Napoleon offers a full range of furniture-mounted electric models, including mantel pieces, cabinets, and entertainment centers, wall mounted units are the “shining stars” in Napoleon’s electric line-up, Czerwonka says. Wider versions of these wall-mounted models are becoming more popular, with better-selling sizes of these linear models now ranging from 48- to 100 inches.
A new trend in electric models is vertical styling, says Czerwonka. “In the past, electric flames were kind of squatty, not very tall. But now with taller, better flames, these new vertical models, like our Allure Vertical series, are becoming more popular, particularly for narrower walls.”
|Allure Vertical Series NEFVC38H from Napoleon Fireplaces.|
New from Napoleon is its Alluravision series, four sizes of linear, wall-mounted models that can be plugged in or hard-wired for greater heat output. A strong seller for Napoleon has been its Clearion series of see-through electric models, the runner-up in the 2017 Vesta Awards electric category.
“Hearth dealers have been concerned about competition from mass merchants offering so many electric fireplaces,” Czerwonka says, “but models sold by the mass merchants are cheaper models topping out at $399. Today’s consumer wants more quality and features than available in mass-merchant models, like higher intensity LED lighting, better flames, full remote control functions, bluetooth, and control with smart phones.
“Consumers now are willing to put out $2,500 to $3,000 for higher-quality, full-featured electric models. Hearth dealers should take advantage of this growing trend by offering electrics starting at $299 on up to the much better selling $2,000 to $3,000 models.”
Research in Hearth & Home magazine’s latest Buyer’s Guide points out that, in 2017, the average price-point of an electric fireplace sold by specialty hearth dealers was $1,108.
Electric fires have long been shunned by many hearth product dealers because the market then was dominated by mass merchants with cheap imports. But today the growth in electric fires is in more expensive, full-featured models selling better and better through specialty hearth dealers.
If you’re not selling electric fires today, check out the specialty hearth shop a few miles away. He or she is probably selling them, and doing quite well.