Automating The Home Market

Recently I’ve spoken with a number of distributors who have shared that business is up and in some areas it is being driven by residential growth in their market. Frequently this growth is new home construction, however, sales performance at Home Depot and Lowes infers that the DIY / home renovation market is also growing.

While the residential market is historically only 8-10% of the electrical industry (in the heyday it got to 12%), it is frequently a precursor to commercial growth in a market. And the term “residential” can differ among industry participants. Some include only single family homes, others include multi-family (and maybe some light mixed-use).

Up-Selling

Additionally many of these homes are not starter homes, hence higher selling prices infer nicer amenities. And some of these amenities can be profitable for electrical distributors who serve this market including:

• Lighting / Smart Lighting (under-cabinet, landscape, pool, architectural, LED cans, track , etc)
  • And if you need to learn more about this segment consider Enlightenmag.com
  • And consider a virtual showroom by subscribing to lighting showroom content from XOLogic
• Shades
• Smart Thermostats
• Smart Carbon Monoxide Detectors, Smart Smoke Detectors
• Datacom
• Heated floors
• Ceiling fans
• Upgraded devices and various sensors (occ and motion), Smart Plugs
• Security (Smart Indoor & Outdoor Cameras, Image Motion Sensors)
• Wiring for wireless, Smart Hubs
• Sound and monitoring, Smart Speakers
• Central vac
• and more

And during a recent distributor visit the distributor raved about Lutron’s Caseta and commented that once they got it into the hands of a contractor, the contractor loved it.  Their challenge was teaching the contractor how to market and sell it … essentially, how to create demand (which begs a question of “should a distributor focused on the resi market offer services, a la plumbing and HVAC distributors, to help contractors create demand?“)

Home Automation

Residential is also benefiting from Amazon’s Echo, Google’s at Home, Nest and more as these consumer endeavors are driving home automation awareness. The question becomes “how do you partake in this ecosystem or do you abandon the market to Best Buy, Apple, Amazon, Belkin and others?” Have you looked to see how many products that interact with Amazon’s Echo? And this includes wiring devices, lighting controls and more!

Consider … a recent home automation survey conducted by Changewave listed these companies:

Aeon Labs / Aeotec, Amazon (Echo), Apple, Belkin, D-Link, GE, Google (Nest, DropCam), Honeywell, Huawei, Insteon, Intel, Leviton, LG, Lutron, Microsoft, Panasonic, Phillips, Qualcomm, Samsung (including SmartThings), Sonos, Venstar, Wink

Which do you recognize? Sell? Promote? (and do you really promote them to contractors? And, if you are really in the resi space, to home owners, builders, architects?

Demand Generation

Additionally, consider reviewing your mail at home.  Notice the marketing of HVAC, plumbing, landscape lighting, pool and window contractors? Now recall an electrical contractor mailer, website or ad on Home Advisor, Thumb Tack or another site? Could you help “committed” electrical contractors grow their business? (This is a question for manufacturers and distributors.)

The resi market can be profitable if you are in it.  If you dabble you’ll always consider it a price-oriented small contractor segment (unless you sell to tract builders.)

The alternative is that this market will go retail (including online) or to the a/v / custom electronics / home integrator market.

Looking to grow your resi market? Give us a call for resi growth ideas.