CEA Survey: Room For Further Growth Among Builders Who Market Technology
By Joseph Palenchar -- TWICE, 5/5/2008
ARLINGTON, VA. — Home builders are getting more proactive in marketing home technologies, but they have a long way to go, the Consumer Electronics Association's (CEA) sixth annual builder survey found.
In the late-2007 survey, only a small minority of builders offering home technologies said they were proactively marketing technology (see table 1), but that's up from 2006, when none of the surveyed builders admitted to being proactive. In the latest survey, most technology-installing builders said they still offer multiroom audio, home theater and other technologies only when asked by a buyer or architect.
The latest survey also found that a majority of builders continued to offer home technology in 2007, with the percentage offering home theater remaining at its highest level since the first survey in 2002. The percentage of builders offering multiroom audio, however, slipped in 2007 to a four-year low. (See table 2 on p. 27.)
Although builders who offer home technologies have modestly stepped up their marketing, these builders were less likely in the latest survey to say the proportion of their revenues attributable to home technology grew over the past two years. And they were less likely to say home technology marketing is more important that it was two years ago. CEA contends that both findings likely reflect previous years' gains in importance and revenues to builders. (See table 3.)
The survey of 307 home builders, conducted by the National Association of Home Builders and analyzed by CEA, also found that:
Home builders that offer multiroom audio and home theater are motivated more by the profit potential of the systems than by a need to match the competition or because a buyer or architect specified the systems. (See table 4.)
The percentage of technology-installing builders who use electrical contractors to install technology rose in 2007 to 72 percent from 63 percent, but that number was still below the 76 percent peak posted in 2003 and 2002, the survey found.
The percentage of builders using major retailers dropped substantially to 7 percent from the 2006 survey's 17 percent, but the 2007 percentage was more in line with previous years' experience.
Whomever they use for installation, builders are getting more aggressive in marketing technology.
In the 2006 survey, the vast majority of technology-offering builders said they did no marketing whatsoever. Ninety-five percent of the builders didn't market home theater, for example, and 96 percent didn't market multiroom audio. And none of the builders said they proactively marketed any technology.
In the 2007 survey, however, 18 percent said they proactively market multiroom audio, 12 percent proactively market home theater and 15 percent market home automation. Nonetheless, substantial minorities do no marketing at all.
"The fact that builders are doing more proactive marketing of home technologies than in the past suggests builders are finally beginning to recognize the value proposition that home technologies can mean for their bottom line and ultimately for buyer satisfaction," CEA economist Shawn DuBravac told TWICE.
"Builders are finding any way to win in a tough environment," he continued. "That they are being more proactive in marketing home technologies also suggests to me that they are finding buyers receptive."
Home Technologies Offered By Builders| 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |
| Structured Wiring | 82% | 87% | 82% | 88% | 76% | 78% |
| Monitored Security | 83% | 81% | 80% | 78% | 75% | 62% |
| Multiroom Audio | 67% | 74% | 74% | 68% | 65% | 57% |
| Home Theater | 73% | 73% | 69% | 59% | 52% | 55% |
| Automated Lighting Controls | 58% | 57% | 45% | 41% | 48% | 31% |
| Home Automation | 50% | 51% | 42% | 39% | 45% | 27% |
| Energy Management | 53% | 52% | 46% | 41% | 44% | 31% |
| Central Vacuum | 76% | NA | NA | NA | NA | NA |
| Intercom Systems | 68% | NA | NA | NA | NA | NA |
| Source: CEA/NAHB 6th Annual State of the Builder Technology Market © TWICE 2008 | ||||||
Why Install Home Technologies?
| Competition is Offering | Buyer/Architect Specified | Boosts Profit Potential | Sets Apart Technology Type From Rivals | |
| Structured Wiring | 63% | 21% | 28% | 17% |
| Monitored Security | 50% | 28% | 33% | 17% |
| Intercom Systems | 38% | 35% | 36% | 18% |
| Multi-Room Audio | 35% | 33% | 57% | 17% |
| Home Theater | 35% | 38% | 42% | 26% |
| Energy Management | 31% | 33% | 32% | 33% |
| Automated Lighting Controls | 29% | 35% | 32% | 28% |
| Home Automation | 28% | 35% | 33% | 26% |
| Central Vacuum | 26% | 32% | 43% | 23% |
| Source: CEA 6th Annual State of the Builder Technology Market Study © TWICE 2008 | ||||
Technology's Impact On Builder Revenue
Home Technology Impact On Builder Revenue*
| 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |
| Increased Revenue | 31% | 42% | 33% | 24% | 19% | 49% |
| Stayed About Same | 61% | 52% | 61% | 76% | 79% | 49% |
| Decreased Revenue | 8% | 7% | 5% | 0% | 2% | 1% |
| Importance Of Using Home Technology To Market New Homes | ||||||
| Very Important | 28% | 29% | 27% | 10% | 19% | 17% |
| Somewhat Important | 64% | 55% | 59% | 69% | 52% | 49% |
| Not Important | 11% | 16% | 14% | 21% | 29% | 34% |
| Importance Of Marketing Technologies* | ||||||
| Much More Important | 18% | 13% | 16% | 15% | 22% | 31% |
| Somewhat More Important | 35% | 52% | 42% | 32% | 40% | 40% |
| Same | 36% | 28% | 35% | 51% | 34% | 28% |
| Somewhat Less Important | 7% | 4% | 6% | 1% | 3% | 1% |
| Much Less Important | 3% | 3% | 1% | 1% | 2% | 0% |
| *Compared to the previous two years. Base: Builders that offer home technologies. Source: CEA/NAHB 6th Annual State of the Builder Technology Market© TWICE 2008 | ||||||
