Smart-Home Hangover May Push Builders to More Established Home-Tech Brands
IBS 2017: Smart-home technology has burned home-builders in the past. Now that they're embracing it again, will they lean on the home-technology establishment, including product providers and installers?
Here’s what I’m thinking: that home builders remember their mistakes of the preceding decade, and while they embrace the smart home today, they tread wisely.
During the housing bubble of the early 2000s, builders scrambled to install the coolest technology they could find. Facing a housing boom, they lured buyers by providing something their competitors weren’t. And since everyone was already offering the same old Corian countertops and travertine floors, they differentiated themselves with technology.
Production builders quickly signed deals with unproven technology providers – both the manufacturers and their dealers – without really thinking things through.
Mastervoice, Smart House, Home Director, Lifeware, Best Buy, CompUSA …. These were just a few of the companies that promised great things for high-volume builders without having all the right stuff in place: the underlying technologies, the products themselves, the installation channel, the inventory, technical support, sales support, logistics, financing … all of the above … some of the above.
There was also the issue of suppliers and installers giving away too many freebies to builders and buyers alike – because there would always be that upsell later on, right? – that everyone came to expect it.
Of course the upsells never came, dealers and suppliers went out of business, and builders had no one to support their installed gear, if they ever got around to installing it in the first place.
Blame it on the suppliers, including the product vendors and service providers? Nope. That mess lies with the builders who were too rushed to properly vet their technology providers and too cheap to patronize established brands and reputable installation companies.
Shame on them.
Smart Homes, Part II
For several years there – around 2008 to 2012 – production builders (those who were building) shied away from home technology. It’s no wonder. They were terrified of supporting it.
At CES last week, I was reminded by Lutron president Mike Pessina of a home-technology panel we did in 2013, sharing the stage with a product guy from Nest, and a co-founder of Revolv, the short-lived maker of a home-automation hub.
It was an annual conference put on by Harvard’s esteemed Joint Center for Housing Studies. The top execs from all the biggest home builders were there. We each did a little spiel and the builders just stared at us blankly.
Finally, a builder raises his hand and says, “We are just scared to death of the service call.” (Memorably, the Revolv guy holds up his big red hub and proclaims, “We have never had a single service call!”)
That was Smart Homes, Part II.
Smart Homes, Part Now
So here we are. Builders are building again, and they’re demanding technology for today’s tech-hungry buyers (and renters).
But they don’t seem to be afraid these days.
As Pessina noted last week, “They’re no longer saying, ‘We’re afraid of the service call.’ They’re now saying, ‘We need that.’”
Here’s what’s changed between then now, all in the course of just a few years:
- Prices for home technology have dropped considerably.
- There are now many proven technologies and established brands in the marketplace, compared to just a handful a decade ago.
- These established companies have supply chains figured out and support centers staffed up and ready.
- Systems are easier to configure, and more technicians are trained to install them.
- Builders are smarter, with home-tech fiascos behind them.
The discussion with Pessina at CES was interesting. There we were in the Lutron booth, surrounded by rock-solid, time-tested lighting products and other smart-home solutions. All around us were shiny new objects from smart-home start-ups, most of which won’t be around in the next year or two.
Pessina suggests that the mass bombardment of smart-home companies, products and messaging over the past three years have led to confusion and fear – fear of picking the wrong horse (again) – which is driving more home builders to time-tested partners.
That’s at least one reason why Lutron has built up a sizeable Customer Support center in Las Vegas, staffed by an army of specialists serving dealers, consumers, builders and other trades 24/7.
Pessina tells me one dealer just up and hugged him, thanking him for the expanded service.
He thinks today’s craziness in the smart-home category will be good for the more established companies, and I tend to agree.
That’s not to denigrate the newer companies, or doubt they can succeed. It’s just that builders (I think?) have learned to ask more questions that look beyond the technology itself.
What do you think?
Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at [email protected]
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