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Home Technology Can Add Value, Boost Appeal
With the pace and availability of home technologies advancing and their costs decreasing, builders who sell to tech-savvy buyers should incorporate home technologies during the selection and construction phases of home purchases to boost buyer appeal and realize even more savings, according to panelists at a recent webinar on home technologies and business success.
“Fundamentally, technology keeps advancing and its costs decline,” said webinar panelist David Rodarte, president of NuVo Technologies, which creates innovative solutions for the consumer music industry. “There is a strong movement with manufacturers to provide added value to bring these technologies into the common home.”
Participants in the July 22 webinar — sponsored by NAHB, the Consumer Electronics and Installation Association (CEDIA) and the Consumer Electronics Association (CEA) — discussed the state of the housing industry and home technology, the types of technology available, the viability of home technology integration and the benefits, and the need to incorporate home technologies into a builder’s business model as tech-savvy home buyers emerge in the new market.
The discussion was based on the finding of the CEA’s “Annual State of the Builder Technology Market Study,” which analyzes the marketing and installation of home technology among home builders.
The panel focused on five key findings from the study:
- Despite the Economy, Builders Remain Committed to Home Technology
“Innovative marketers are embracing home technologies as a tool to differentiate themselves in the marketplace,” said Stephen Hann, president of Hann Builders in Houston.
Hann said that in his business model, electronic systems contractors (ESCs) work directly with his buyers to determine what home technologies to include with their home purchases.
“It’s a good fit because we can ask customers what they look for in a home and then bring in experts to fit their needs. A lot of these offerings have to be captured during the course of construction rather than added on later,” Hann said.
“ESCs can provide a considerable amount of value to the builder. They can bring in many technologies and codify them for the builder. They also can discuss the purpose of these technologies with the builder and consumer in order to provide the best fit for the consumer.”
- Home Technologies Beginning to Appeal to Broader Market
Smaller volume builders and custom builders are beginning to offer more technology options to consumers as the costs of technology upgrades continue to decline while their value to consumers increases, according to the CEA study.
“We are seeing trends from a much broader spectrum of builders and buyers in the residential space requesting more of these technologies,” said panelist Matt Carter of Encore Systems. “For example, in markets of energy management and life safety, there are firms that solely offer these technologies in new homes under $250,000."
“This is radical shift from what we’ve seen in the past decade. You can do so much more today between cost and value than we used to,” he added.
While many builders believe that the echo boomers are the primary consumers who will want these technologies in their homes, the study also found that older generations are interested in them as well.
Hann said that his buyers — typically 40-plus and 50-plus consumers — don’t just buy technology to buy it; the home technologies they add have to fit their needs and have a perceived value.
“You may think that someone who retired may just want an on/off light switch, but it’s not always the case. Lighting systems, intercoms, security systems and systems that integrate all of them are what I discuss with my consumers throughout the design/build process,” Hann said. “People want to control their environment and their cocoon.”
- Home Technology Can Appeal to Every Market Segment
The panelists all agreed that home technologies appeal to and can fit into every market segment.
“Most homes today have security systems, lighting controls and a need at some point for wiring,” said Hann. “My experience is that there are pieces and parts of home technology that fit into every market.”
“I believe the greatest onus is on the builder, manufacturer and ESC to educate the consumer,” said Rodarte. “They all need to be very aware of what consumer trends are.”
“There are so many things happening so fast that people have the option to bring these technologies into their lives. Computer, database, photos, music, phone — the consumer expects the same technologies in their home as they do on their cell phone,” he said.
- Home Builders Have Increased Their Proactive Marketing of Technologies
Hann said builders should proactively market their home technologies options and offerings to help differentiate themselves from their competition.
“We certainly market our capabilities. As technology in general has gotten more effective, less expensive and easier to use, consumers expect the same from home technology. I don’t think a consumer today would buy a house that wasn’t prewired for telephone, so why not other technologies?” he said, while noting that 99% of his home buyers purchased structured wiring for their homes.
In the CEA study, builders reported that 41% of their home buyers purchased structured wiring.
Two typical objections to adding home technologies have been an ability to assess the value of technology and its perceived lack of durability and available service, according to the panelists. As the home technology industry continues to grow, these objections are being addressed.
Reliability and credibility are the major concerns of tech-savvy consumers, said Rodarte. The consumer will not forgive failure, so builders must deliver a quality product and have the support mechanisms in place or they won’t stay in business, he said.
The value of a particular technology is subjective, said Encore’s Carter, but confidence in the home technology industry is on the rise because consumers no longer fear the technology. They understand how convenient technology can be, and how reliable it is.
Consumers also understand that the home technology industry has the support and service mechanisms in place that foster confidence in the technology.
- ESCs Remain a Major Partner for Home Builders
Hann said one of the best ways to maintain consumer confidence and provide the service consumers demand is to develop a relationship with an ESC.
“If I’m comfortable with an ESC, I will be comfortable putting him in front of my client,” Hann said. “Our business has gotten to the point where I am generally no longer part of the meeting between the ESC and the client.”
But Hann says he still remains a vital part of the overall selection process.
“I put the home owner in touch with the ESC, but I set the expectations and budget before they meet.”
To listen to the free webinar, which originally was held on July 22, click here.
 Information About Home Technology Available From HTA
The Home Technology Alliance (HTA) is a partnership between NAHB and the Custom Electronic Design Installation Association (CEDIA) that was formed to position the housing industry to effectively meet the growing home buyer demand for home technology and provide maximum return on investment in the new home building and remodeling process.
For more information, visit www.nahb.org/HTA.
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