With 2023 drawing to a close, we can say that for many this past year has been successful for many integrators, manufacturers, distributors, and reps associated with the custom electronics industry.

Thankfully things are settling down and returning to some level of normalcy. Despite high levels of inflation and other uncertainties heading into 2024, there are many reasons to feel good about the upcoming year.

With an eye on 2024, CE Pro asked industry professionals from across the market to peer into their crystal balls and share their thoughts on the outlook for this year. Here is a sampling of the market’s cross-section of pros had to say about the custom integration channel category.

James Krakowski, VP of Sales for Home Entertainment, Samsung America

“Despite headwinds for the overall CI [custom installation] market this year, we’re seeing a stronger second half. I see the channel positioning itself for a resurgence back to growth in 2024, led by high-net-worth individuals and their desire for new technologies, experiences, and higher ticket items.

“High-net-worth individuals still have a strong desire for new technologies and this channel knows how to deliver better than anyone. I also see growth supported by homeowners who locked into low fixed interest rates and now using that as an asset to invest in their homes.

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“Homeowners will continue to gravitate towards larger, fixed panel screens — and they’ll have even more XXL screen choices in 2024. Products like the 98-inch Samsung Neo QLED 8K TV and our 85-inch Neo QLED 4K Terrace TV for outdoors are getting them excited. Plus, they deliver high revenue for the installer.

“My advice for the CI community is to not get distracted by the noise of retail selling prices around them. The CI integrator is a ‘concierge of technology’ to high-net-worth individuals who are seeking turnkey solutions. This is a true differentiator, and the CI industry should lean into this path to purchase for their customers to fuel the growth I’m projecting in their space next year.”

Joaquin Rivera, Co-founder, ByDesign Vision & Sound Marketing

“It’s important for dealers to understand how much more valuable they can be to their client if they can also present power, wellness, and lighting fixtures indoor and landscape. Not only will these get our dealers in the jobs much earlier, but they seem to carry more importance to the end user and are very profitable as they are much lower touch products.

“We purchased a building to build a ByDesign Experience Center because, unfortunately, in Southern California, there are very, very few dealer demo spaces. We wanted to provide a tool to our dealers to bring their clients and show them a 16-foot-wide Barco LED Videowall, [along with] $225,000 and $105,000 DCI projectors; $110,000, $70,000, and $34,000 Barco projectors, and a 15-foot-wide Director’s Choice Stewart Filmscreen.

“We also have a 1G and 10G video-over-IP solutions from AVPro Edge; plus DMF Lighting, Colorbeam Lighting, Josh.ai, J Geiger Shades, SurgeX, as well as our other brands. All of this is not only to show dealers, but to educate our industry, architects, designers, and builders. If it’s possible for our peers to do that, it is worth the investment.”

Matt Herbster, Co-owner, Audio Innovations

“In 2024, we should see manufacturers’ hardware constraints become a thing of the past, so integrators can get back to business as usual. Throughout COVID we found ourselves bouncing between brands to complete projects. On the upside, we’ve made some great new partners and expanded our product offerings.

“On the downside, we’ve seen system troubleshooting become more complex by jumping back-and-forth between different programming languages which require different skillsets. Hopefully, 2024 brings us back to a place where we can offer solutions for products we have tested and know inside and out.

“The way customers integrate with their systems has changed. It’s nice to assure your customers that they can upgrade easily and keep up with the changes. When you get hired to perform an integration project, try to create a feature that creates value for the customer. Listen to their requests, ask them questions to understand why they are spending the money on the system. At the end of the project, deliver an Easter egg that validates the money they spent on the project.”

Jon Herbster, Co-owner, Audio Innovations

“I’m excited for 2024. There are still a lot of opportunities available. As suppliers slowly climb out of the nightmare of back-ordered products, I feel like I can get back to running my company again. The last few years have felt like I have spent all my time triaging jobs with whatever products I can get. 

“I also see clients wanting quality and reliability again. They don’t want the cheapest plastic box. There feels like a movement to get the quality up and if you can demonstrate high-end products against the plastic box, then there are some real opportunities on the horizon. We have a travel case that we can bring to a client’s home to show the quality of Kaleidescape against Apple TV.

“I hope this is the year that we can really start to integrate and make homes truly ‘smart.’ For the past probably 35 years, most people in this industry have been selling distributed music, the ability to control thermostats from a phone, the ability to turn on your theater with a smart remote as a ‘smart home.’ That is certainly an integrated home, but is it really a smart one? I can see some companies starting to look at AI as well as making programming easier. Having shades move by time of day, comparing temperatures outside and inside to see if moving that shade would help heat or cool the house. Knowing who is in the room and how they like it set up. Everyone can do integrated homes now — take jobs to the next step and truly integrate them.

“Test what you sell at your own facilities/homes. Stay up to date with the products and create really good relationships with sales reps.”

Jon Herbster, Audio Innovations

“Many companies have had to quickly source different parts and do different designs so that they can ship products again. We’ve seen an increase in failures of products that used to never go bad. We’re going through new rounds of testing to make sure we can feel good about the systems we sell and that they will give the clients many years of trouble-free service.

“Test what you sell at your own facilities/homes. Stay up to date with the products and create really good relationships with sales reps. It seems like some manufacturers have moved away from reps, but in my opinion, they are more valuable now than ever before. As a small business, I lean on my reps to take the time to deal with some of the issues that arise over the year. They can save me a lot of time.” 

Michael Short, Senior Director of Residential & Hospitality Marketing, Crestron

“I think 2024 is going to be really positive and potentially transformative. There are a pair of converging forces: One, there’s a broad consumer knowledge of what the ‘smart home’ really is, and two, there’s a growing understanding that there is a big difference between professional and DIY solutions. We’re going to see a lot of people realize that to have a standardized platform or smart home solution, it requires professional installation, support, and product specification if you’re going to be really building a true, working infrastructure in the home.

“On another subject, if interest rates remain high, we’ll see people who’ve decided to stay in their current homes invest in that property — and that certainly includes technology. If rates begin to retreat, we’ll see buyers who come to the table with a greater expectation of technology solutions for new builds. It’s a win-win for the industry.

“There’s a new consumer focus on quality. We’ve seen poorly made solutions come and go, especially in the DIY space. Quality must now be the essence of everything that we produce. If a client is paying us to install and configure a system in their home, there’s an expectation that the solution will last — and remain reliable. We’ve heard this time and time again from our dealer network: ‘Don’t rush things out, don’t create things that aren’t fully tested.’

“We should be focused on creating platforms that create seamless experiences for our clients, no matter what solutions are part of that particular system. To put it another way, our industry motto should be ‘expanded interoperability and compatibility.’ The DIY segment is certainly thinking about that potential. We should, too.”

Dennis Holzer, Executive Director, PowerHouse Alliance

“We anticipate there to be a bit more ebb and flow between residential and light commercial projects. It’s one we’ve noticed across all our member locations over the last several months, the light commercial projects are picking up and the strictly residential projects are slowing. This shift is particularly visible in sectors like hybrid work solutions, restaurants and bars, and multidwelling unit (MDU) installations.

“For the last several years, both networking and outdoor audio have reigned supreme as top categories for PowerHouse members. While those categories are still immensely popular, we are seeing huge gains in the lighting and shading market. The integration of automated shading with lighting, HVAC systems, and security solutions presents a comprehensive package for both energy efficiency and comfort which are exactly what homeowners are looking for. Not to mention the fact that they can contribute significantly to any given project’s revenue.

“PowerHouse Alliance members see themselves as an extension of the dealer’s team. With this partnership mindset, we’ve been able to stay agile to the needs of the market and responsive to the shifts and changes of our customers. We’ve learned the value of continuously expanding product lines and training programs, ensuring that dealers are well-equipped to meet diverse customer needs. Maintaining strong partnerships with vendors and investing in regular training and skill development are practices we plan to intensify in 2024.

“Your projects should not be one and done. Focus on developing deep, consultative relationships with clients. Understanding their evolving needs and offering tailored solutions will set dealers in our channel apart from other big-box technology providers. A big part of adopting this consultative mindset with your clients is considering the long-term value of customer relationships over immediate gains. Investing in an ongoing relationship can pay big dividends not only for support and service but for those periods when your clients are ready to upgrade their technology. Continue to check back with your customers you previously did work for!”

Jake Vitrofsky, Chief Operating Officer, HEDsouth

“In the realm of product trends, manufacturers are shifting their focus from a race for the highest specifications, such as megapixels in cameras, to an emphasis on features enhanced by AI. This change is indicative of a broader industry trend where the value proposition is no longer solely about hardware capabilities but about the smart, user-centric functionalities that these devices offer. AI is playing a pivotal role in this shift, enabling features like advanced scene recognition, predictive maintenance, and personalized user experiences in various smart devices.

“In the southern states, there’s an explosion in condo living. This calls for integrators to tailor their services to meet the needs of condo living, which often includes space-efficient solutions, multifunctional smart devices, and condo-specific security and entertainment systems.”

Jake Vitrofsky, HEDsouth

“Regarding project trends, there is a noticeable divergence in market demands between northern states and southern states, including popular tax havens like Florida. In the northern states, the trend is towards whole-home solutions, driven by the movement from cities to suburbs. This shift necessitates integrators to offer comprehensive services that encompass wide-ranging aspects of a smart home, from energy management to entertainment and security. Conversely, in the southern states, there’s an explosion in condo living due to the influx of residents in the aftermath of the pandemic. This trend calls for integrators to tailor their services to meet the needs of condo living, which often includes space-efficient solutions, multifunctional smart devices, and condo-specific security and entertainment systems.

“In business operations, there’s a significant trend towards investing in workforce development. The integration industry is increasingly recognizing the value of younger, tech-savvy employees who are inherently familiar with connected technology. This generation, having grown up in a digital age, brings an intuitive understanding of smart technologies and can often grasp new concepts in this space more quickly.

“Investing in such talent is not only beneficial for handling the current technology but is also critical for staying ahead in an industry that is rapidly evolving with advancements like AI and IoT. By fostering a workforce that is agile, technologically adept, and forward-thinking, businesses in the custom integration industry can ensure they remain at the forefront of innovation and service excellence. This investment in human capital is pivotal for the sustained growth and adaptability of businesses in this sector.”

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