Consumer attitudes, increase in competition to mark big changes in residential market

For years, the custom electronics and residential security market for was a boon for independent contractors. But after the housing collapse several years ago and subsequent spiraling of the economy downwards, the industry, like most others in the country, fell on lean times.

Remodeling your business to keep pace with the times was the subject of a workshop held this week at the CEDIA Expo in Atlanta. The workshop was sponsored by lighting solutions provider Lutron Electronics and was conducted by Group Gerhardt, a sales training and support company for the residential systems integration industry.

"Before, we were in a luxury market where people wanted buy things to show off their status," said Robert Marcoccia, head of dealer relations and business development for Group Gerhardt. "Consumer attitudes are changing. Conspicuous consumption is no longer cool."

Instead, Marcoccia said that consumers want products and services that enhance the lives of their family, such as home automation and energy management.

Independent installers are also facing increased competition in the form of big cable, telecommunications and security companies, many of whom have developed their own home automation systems as way to offset customer attrition and grow their business.

Marcoccia also said that security dealers will have to be able to offer their customers more in the future than just a standard alarm system installation and monitoring package, pointing out the eventual demise of POTS lines and increased national competition from companies who will be offering more of these automation services that appeal to those customers that want the "connected lifestyle."

"Security companies tend to be conservative by nature," he said. "If they don't see this change coming, they're going to get eaten up."

Another thing that will impact installers in the future is a diminished need for the skill set they possess. With so many electronic devices having wireless connectivity capabilities, Marcoccia explained that the skill sets many dealers and their employees have acquired over the years when it comes to wiring systems will be moot.

Despite all of the aforementioned factors that stand to affect the viability of business for independent contractors, there are several things that will allow them to differentiate themselves from the competition.

As in the past, Marcoccia said that it will be alright for big companies to establish the market for home automation and other systems, at which point smaller firms can pick up the slack, offering more comprehensive packages.

The pitch that these independent companies will have going for them, according to Marcoccia, will be the personalized service and installation that they will be able to provide the consumer.

"Let (the larger companies) establish the market and then we can come in and say, 'you want (the big company) in your home?'" he said.