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Home Theaters Can Help Builders Maximize Profits
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Photo courtesy of the Custom Electonic Design Installation Association. |
Home theaters, media centers and other higher-end home technologies can help builders maximize their profits, even during the current housing downturn, according to studies by consumer electronics organizations.
Overall, consumer electronics are projected to generate $155 billion in factory sales to dealers in 2007, a recent survey by Consumer Electronics Association (CEA), according to a nationwide organization of consumer technology companies. Within the home building industry, home technology installations were expected to increase 7% this year to $9.6 billion.
While more than 46% of the builders surveyed by CEA recently said home theater offerings boosted their profit potential last year, other industry surveys have found that many new-home builders may not be fully tapping into the profit potential of offering home theater to their customers.
Regarding demand for home theaters and sophisticated home electronics, a CEA survey last year found that 23% of home buyers who did not purchase a home theater system at the time of home purchase and construction regretted that decision. The survey also found that only 60% of home automation systems and 43% of home theater systems were installed during new home construction.
A similar study by Parks Associates, a Dallas-based market research firm that focuses on home and digital technologies, found that more than half the builders surveyed in 2006 offered electronics for home theaters and that 45% of the builders installed home theaters in the homes they sold.
A home theater is among the top “must-have” technologies that builders should include in their home packages, said Utz Baldwin, president of the Custom Electronic Design Installation Association (CEDIA), an international trade association of companies that specialize in designing and installing electronic systems for the home.
Baldwin will participate in a panel discussing home technology trends at the 2008 International Builders’ Show in Orlando in February.
Alliance: A Source for Technology Information
So that builders could take advantage of the growing demand for technology, NAHB partnered with CEDIA to create the Home Technology Alliance (HTA) to raise industry knowledge about technology trends and opportunities and to provide builders with the information they need to take a lead role in marketing home technology to their consumers.
What Builder Can Do to Maximize Profits
CEDIA suggests several steps that builders can take to ramp up their technology offerings and maximize profits. They include:
- Use Technology to Stand Apart From the Competition — Tech-savvy home buyers will likely buy from builders who offer new and exciting tech toys and an automated, connected and convenient home lifestyle.
- Future-Proof Homes — Offer and install structured wiring in every room before drywall goes up. Structured wiring will provide for future capabilities and expansion.
- Work With Architects, Designers and Electronic Systems Contractors (ESCs) During the Design Process — Home technologies come with attendant space and location issues that ideally can be solved and planned for before construction begins. This also reduces potential additional costs and delays.
- Update Home Packages — Home technology packages can be tailored as standard new home offerings or upgrades. Incorporate home technologies and structured wiring services in sales packages.
- Directly Market Home Technologies to Home Buyers ― Work with an ESC to market and sell technologies in the home buying process. Provide demonstrations and include technologies in model homes.
- Provide Home Buyer Technology Product Training ― Not all home buyers are tech savvy, even though they may want the latest technology in their home. Partner with ESCs to have them provide home buyer technology training. ESCs can provide the expertise, and home buyers can schedule with them directly.
- Create ESC and Home Buyer Agreements to Decrease Technology Service Worries — Work with the ESC to create agreements between an ESC and the home buyer that includes product and customer service warranties.
For more information, contact Germaine Palangdao at NAHB, or call her at 800-368-5242 x8498.
 CEDIA: A Source for Experienced ESCs
The Home Technology Alliance (HTA), a partnership between NAHB and the Custom Electronic Design Installation Association (CEDIA), was created to meet the growing consumer demand for home technology.
CEDIA, a founding sponsor, is an international trade association of companies that specialize in designing and installing electronic systems for the home. CEDIA members are established and insured businesses with bona fide qualifications and experience in this field.
For more information on CEDIA, visit the association’s Web site at www.cedia.org. To find an ESC, click here.
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