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Industry Embracing Commercial, Retrofit Markets
Once "fat and happy" on the new-construction gravy train, CE pros are now feeding off the commercial and retrofit markets.
For me, as a reporter covering the custom electronics installation industry, 2009 was about two things: retrofit and commercial projects. It's my job to ask CE pros what they're doing. Almost to a man, they told me they are trying to ramp up their existing home and B2B clients.
You don't need an economic guru (or even a reporter) to explain this shift. We all know the new-construction market tanked and nobody credible is saying it's going to get back to normal in 2010.
That means I'll likely spend 2010 talking to more CE pros about how they are attacking the retrofit and commercial markets. I welcome that.
We can, as an industry, learn from a valuable adage. If something in business seems too good to be true, it usually is. The new-construction gravy train many CE pros rode through much of the last decade shouldn't have been incorporated into a longterm business model.
Dennis Sage, a Phoenix-based high-volume integrator, said it best: "We all knew in the back of our heads that the pace that homes were being built just could not go on. But we were too fat and happy to accept the reality of market shifts that have been going on for what, maybe 1,000 years?"
I'm not faulting Sage. We can all relate.
Greg Simmons, co-owner of Las Vegas-based Eagle Sentry, articulates why smart business people like himself and Sage had tunnel vision. "There was a time when I was just looking at, How I am going to finish these houses? That's how it was."
Many CE pros — like Simmons and Sage — were too consumed with cashing clients' checks and paying their employees to focus on what would happen when the construction bubble burst. Both of those guys talked candidly to me for a March 2009 article on how they were diversifying their companies to insulate themselves against market shifts.
Both acknowledged the value of doing a portion of their business in the commercial market, and both cited an advantage high-volume dealers have in pursuing the retrofit market: a high-volume of existing clients.
It was satisfying that toward the end of 2009 dealers were talking about results, not just plans to attack other markets.
For the December 2009 CE Pro cover story, Jacksonville, Fla.-based Fultech Solutions told me about how it opened a commercial-dedicated showroom at the beginning of 2009. It then went from 15 percent of its business being commercial to over 50 percent.
Stillwater, Okla.-based Aspen Custom Electronics, a two-year-old company that launched after witnessing the industry's mistakes, told me that about 40 percent of its business is commercial.
You don't need an economic guru (or even a reporter) to explain this shift. We all know the new-construction market tanked and nobody credible is saying it's going to get back to normal in 2010.
That means I'll likely spend 2010 talking to more CE pros about how they are attacking the retrofit and commercial markets. I welcome that.
We can, as an industry, learn from a valuable adage. If something in business seems too good to be true, it usually is. The new-construction gravy train many CE pros rode through much of the last decade shouldn't have been incorporated into a longterm business model.
Dennis Sage, a Phoenix-based high-volume integrator, said it best: "We all knew in the back of our heads that the pace that homes were being built just could not go on. But we were too fat and happy to accept the reality of market shifts that have been going on for what, maybe 1,000 years?"
I'm not faulting Sage. We can all relate.
Greg Simmons, co-owner of Las Vegas-based Eagle Sentry, articulates why smart business people like himself and Sage had tunnel vision. "There was a time when I was just looking at, How I am going to finish these houses? That's how it was."
Many CE pros — like Simmons and Sage — were too consumed with cashing clients' checks and paying their employees to focus on what would happen when the construction bubble burst. Both of those guys talked candidly to me for a March 2009 article on how they were diversifying their companies to insulate themselves against market shifts.
Both acknowledged the value of doing a portion of their business in the commercial market, and both cited an advantage high-volume dealers have in pursuing the retrofit market: a high-volume of existing clients.
Shift is On
It was satisfying that toward the end of 2009 dealers were talking about results, not just plans to attack other markets.
For the December 2009 CE Pro cover story, Jacksonville, Fla.-based Fultech Solutions told me about how it opened a commercial-dedicated showroom at the beginning of 2009. It then went from 15 percent of its business being commercial to over 50 percent.
Stillwater, Okla.-based Aspen Custom Electronics, a two-year-old company that launched after witnessing the industry's mistakes, told me that about 40 percent of its business is commercial.
2010 State of the Industry
 | 2010 State of the Industry Report The industry is still ticking after taking a licking. Revenues fell 51 percent in 2009, according to the CE Pro Readership Survey. Webinar: 2010 State of the Industry Join CE Pro editor Jason Knott and his special guests as they explain how the CE industry fared in 2009 and what the outlook is for 2010. 3D TV 101 3D is heading for the home, finally ready to crash into your clients' living rooms. Here's a primer on 3D TV. Digital Media: Being a Content Provider Black boxes and TVs are spinning the Web, so you better get connected. Smart Grid Opportunities for 2010 The market for electronics pros is still developing - but you better prepare. How to Attack the Middle Market CE pros are adjusting to a new market paradigm that emphasizes product demonstrations and affordable solutions. Industry Embracing Commercial, Retrofit Markets Once "fat and happy" on the new-construction gravy train, CE pros are now feeding off the commercial and retrofit markets. | |
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About the Author
Tom LeBlanc, Senior Writer/Technology Editor, CE Pro
Tom has been covering consumer electronics for six years. Before that, he wrote for the sports department of the Boston Herald. Migrating to magazines, he was a staff editor for a golf publication and an outdoor sports publication. Now, as senior writer/technology editor of CE Pro magazine since 2003, he dabbles in all departments and offers expertise in marketing. Follow him on Twitter @leblanctom.
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