6 Pop Songs Great for Audio Demos
Worst DIY Installs Ever Part 7
10 Must-Have Products for Your Next Install
6 Amazing High-End Home Theaters
Print
Email
Share
What to Expect at CEDIA Expo 2009
CEO Utz Baldwin outlines how CEDIA is helping vendors and dealers weather the economy at CEDIA Expo 2009 in Atlanta.
The past year has been difficult for the entire custom installation industry. That's why the Custom Electronic Design and Installation Association (CEDIA) has revved up its efforts to help.
CEDIA is working with vendors to make sure they maintain a presence at CEDIA Expo 2009 in Atlanta from Sept. 9-13 and is exploring new markets, like commercial, for its members.
CEDIA CEO Utz Baldwin briefly outlined some initiatives the association has in place and gave a glimpse into the upcoming Expo.
How would you characterize the state of the custom industry?
Many business owners have told me revenues are down as much as 40 percent. I believe that those Electronic Systems Contractors (ESCs) [who] had solid processes in place and tracked their pipeline will weather the storm and many will capitalize on the situation.
Unfortunately, those who were solely dependent on new construction or who did not have strong business acumen or solid pipelines were the victims in this recession. The large majority of our members seemed to have adjusted to remain profitable by reducing fixed costs and diversifying.
Looking ahead, housing numbers are trending up, and despite a small drop in June, the consumer confidence index has been trending up since March. Feedback from our members seems to indicate things are moving in the right direction, so I am bullish on 2010!
The current economic climate adds a level of complexity to the answer, but we have to look at the big picture and not simply the past 24 months.
Our industry is clearly changing. Consumer adoption of technology is becoming frenzied and will only continue to increase in our space, and that's great news. But as our industry grows, we will see big changes.
"Custom" used to refer to the channel, or a product category, whereas today it is becoming a "level of service." This leads to segmentation of our industry, so we now find business models that cater to levels of service … from high-end systems contractors focusing heavily on engineering and project management serving the early adopters, to mass merchants offering a la cart installation of flat panels and in-wall speakers.
Many business owners I have spoken with are focusing on new areas of specialization such as the retrofit market or energy management. Others are shifting models to offer design-only or becoming install-only companies serving other ESCs as a subcontractor.
The current economy is simply accelerating the inevitable, which is an industry that is made up of products and solutions that serve all market segments regardless of complexity or price tag, and the ESCs that deliver the Electronic Lifestyle.
What is the biggest challenge dealers are facing right now?
Competing in a contracting market. Most dealers are seeing fewer customers and they have a tight grasp of their wallets. I keep hearing the same thing: "We are working just as hard, for less money." I think that is due to clients still wanting systems, just not AL the features or amenities they offer, leaving some of the most profitable items on the table.
Many dealers are forced to take on smaller projects to increase volume, which clearly affects their labor burden. Smaller jobs don't yield the higher-margin labor like design, project management, or programming. I think the key to success is to look for ways to capture as many dollars at each address as you can. Look into new products or services that will increase the ticket price and profitability of each project, i.e., central vacuum, security, service plans.
What are some new opportunities for integrators? How is CEDIA helping them get into those markets?
Diversification is the strategy du jour. So much of our industry is dependent on new construction that businesses are forced to find new market segments. The retrofit market is an obvious choice. With home inventories at an all-time high (about a 10-month average as of June), consumers will buy up existing inventories before new construction picks up.
CEDIA is working with the NAHB (National Association of Home Builders) and NARI (National Association of the Remodeling Industry) to increase awareness of retrofitable home technologies and the importance of working with an ESC.
CEDIA is working with vendors to make sure they maintain a presence at CEDIA Expo 2009 in Atlanta from Sept. 9-13 and is exploring new markets, like commercial, for its members.
CEDIA CEO Utz Baldwin briefly outlined some initiatives the association has in place and gave a glimpse into the upcoming Expo.
How would you characterize the state of the custom industry?
Many business owners have told me revenues are down as much as 40 percent. I believe that those Electronic Systems Contractors (ESCs) [who] had solid processes in place and tracked their pipeline will weather the storm and many will capitalize on the situation.
Unfortunately, those who were solely dependent on new construction or who did not have strong business acumen or solid pipelines were the victims in this recession. The large majority of our members seemed to have adjusted to remain profitable by reducing fixed costs and diversifying.
Looking ahead, housing numbers are trending up, and despite a small drop in June, the consumer confidence index has been trending up since March. Feedback from our members seems to indicate things are moving in the right direction, so I am bullish on 2010!
The current economic climate adds a level of complexity to the answer, but we have to look at the big picture and not simply the past 24 months.
Our industry is clearly changing. Consumer adoption of technology is becoming frenzied and will only continue to increase in our space, and that's great news. But as our industry grows, we will see big changes.
"Custom" used to refer to the channel, or a product category, whereas today it is becoming a "level of service." This leads to segmentation of our industry, so we now find business models that cater to levels of service … from high-end systems contractors focusing heavily on engineering and project management serving the early adopters, to mass merchants offering a la cart installation of flat panels and in-wall speakers.
Many business owners I have spoken with are focusing on new areas of specialization such as the retrofit market or energy management. Others are shifting models to offer design-only or becoming install-only companies serving other ESCs as a subcontractor.
The current economy is simply accelerating the inevitable, which is an industry that is made up of products and solutions that serve all market segments regardless of complexity or price tag, and the ESCs that deliver the Electronic Lifestyle.
What is the biggest challenge dealers are facing right now?
Competing in a contracting market. Most dealers are seeing fewer customers and they have a tight grasp of their wallets. I keep hearing the same thing: "We are working just as hard, for less money." I think that is due to clients still wanting systems, just not AL the features or amenities they offer, leaving some of the most profitable items on the table.
Many dealers are forced to take on smaller projects to increase volume, which clearly affects their labor burden. Smaller jobs don't yield the higher-margin labor like design, project management, or programming. I think the key to success is to look for ways to capture as many dollars at each address as you can. Look into new products or services that will increase the ticket price and profitability of each project, i.e., central vacuum, security, service plans.
What are some new opportunities for integrators? How is CEDIA helping them get into those markets?
Diversification is the strategy du jour. So much of our industry is dependent on new construction that businesses are forced to find new market segments. The retrofit market is an obvious choice. With home inventories at an all-time high (about a 10-month average as of June), consumers will buy up existing inventories before new construction picks up.
CEDIA is working with the NAHB (National Association of Home Builders) and NARI (National Association of the Remodeling Industry) to increase awareness of retrofitable home technologies and the importance of working with an ESC.
Subscribe to the CE Pro Newsletter
Read more Business Resources stories
People On the Move: Milestone AV, Definitive Technology, JL Audio, NACECEDIA White Paper Examines How to Build Mobile Device Wireless Networks
Why Key Suppliers Are Skipping Trade Shows
Lack of Women Hurting IT Industry
10 Reasons Coax, Not Wireless, Is Future of Video Distribution
More in Business Resources
About the Author
Jason Knott, Editor, CE Pro
Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California.
Post a comment
Commenting is not available in this weblog entry.