A few years ago, when I was chairman of the Home Automation and Networking Association — now part of the Consumer Electronics Association (CEA) — the talk was about the coming boom in home systems.

The home systems market has grown for sure, but there are differing opinions in both the industry and Wall Street on what shape future growth will take. How much will come from existing home systems integrators? How much from do-it-yourself home centers and from audio/video and big electronics retailers?

When one takes a glance at the home systems that homebuilders are offering and which systems homebuyers actually install, a picture emerges of a “batting average.”

In baseball, every batter gets at least one pitch, but not every batter can make contact. In the same way, homebuilders may make a pitch for a home system like security, structured wiring or distributed audio, but they don’t always hit a home run with their customers.

The market is still in the throes of shaking itself out and it may stay that way for some time. As attractive as the home system business is in growth potential and profitability, sales and installation are not for the ill-trained or faint of heart.

Batting Above Average for Installs
Homebuilders’ success with offering home systems provides a glimpse into what a security dealer can expect when it makes a similar offer in the retrofit and new construction markets. This can be turned into a batting average based on the number of systems installed vs. the number of offers made for such systems.

As seen in research conducted by CEA on the types of electronic systems offered in new homes (see diagram on page 16 of July issue), 88 percent of builders now offer structured wiring to “future-proof” a home, while 61 percent actually install such wiring. The “batting average” here is .693, which would more than shatter any number Ted Williams or Joe DiMaggio put up.

Compared to structured wiring, the batting average of monitored security is .354. The hit parade goes down from there, with multiroom audio at .176, home theater at .134 and energy management batting .113. Also way below baseball’s “Mendoza Line” is automated lighting controls’ .058 average and other types of home automation at .039.

Monitored security compares favorably with the lifetime batting average of Babe Ruth. It’s second only to structured wiring, which is the easiest item to sell. Structured wiring holds the appealing promise of a fully networked home with the wiring investment buried in the 30-year mortgage.

Builders Provide Path Toward Sales
There are differences, of course, between a builder’s offer to a potential homebuyer and the efforts of a security dealer to sell to an existing homeowner.

Builders don’t “sell” as much as they offer menus of equipment to equip a home. The main attraction is the lovely new residence, and the home system is an enhancement to that lifestyle.

Nevertheless, three out of four builders now say that home technologies are important to their marketing of new homes. It separates them from other builders. Stepping up to both the new construction and aftermarket plates with a Hall of Fame batting average may present interesting business expansion opportunities.

 

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