THE STATE OF RESIDENTIAL STRUCTURED WIRING

To many home builders and electrical contractors, installing home technologies is still a new concept. Be ready with answers to questions and installation training, and your distributorship could land some big sales.

The structured wiring market could top $1.4 billion by 2004, according to Cahners In-Stat Group, a Scottsdale, Ariz.-based high-tech market research firm. More home owners are “future proofing” their homes with structured wiring products, which integrate voice, data, and video services into a central distribution center or hub. Contributing factors include the increased penetration of broadband Internet access, expansion of PCs into the home, and the growing need for entertainment and residential wiring.

“Consumers have a love affair with technology,” said Gary Shapiro, president and CEO of the Consumer Electronic Association (CEA), Arlington, Va. “They want the latest products and demand homes that can accommodate them.”

Shapiro's sentiment is reflected in the findings of a joint survey conducted by the CEA and the National Association of Home Builders Research Center (NAHBRC) titled the “State of the Builder Technology Market.” Seventy-one percent of the builders surveyed responded that home technologies were more important now than they were just two years ago.

Structured wiring is the most widely incorporated technology in new homes. In 2002, 42 percent of new homes were built with structured wiring, and 78 percent of builders offer it as either a standard or optional feature. Three-fourths of builders offer the technology just to compete in the marketplace.

Other home technologies such as home theater, multi-room audio and video and monitored security represented potential cash cows for builders. More than half of the builders surveyed indicated that home theater increases their profit potential, while another 47 percent said the same about multi-room audio. Builders also realized that buyers' concerns over home safety could be translated into dollars. More than 30 percent saw the profit possibilities of monitored home security systems, and 62 percent already offer it in their new homes.

Through their research, the CEA and NAHBRC also discovered that luxury homes are often equipped with more home technologies than starter homes. The gap narrows in the structured wiring category, however, where seven of 10 starter homes and nine of 10 luxury homes are equipped with structured wiring. New homes are also more likely than existing homes to offer structured wiring and broadband.

The survey also revealed that builders understand the types of buyers most interested in home technologies. Builders echoed the sentiment from previous CEA research that younger consumers with children and a comfortable income were those most interested in technology for the home. Specifically, three-fourths of builders cited a perceived interest among buyers ages 35-44, compared to the one-tenth that felt the same for those over the age of 65. Another 89 percent perceived that buyers making more than $200,000 were interested, while 32 percent felt that homes with children have a greater interest than those without.

To remain competitive in the building market, more builders are installing higher-grade cabling like Cat 5 and RG-6 in new homes. About 75 percent of builders use electrical contractors or security installers to install structured wiring. Builders' level of satisfaction with system integrators and custom installers is about the same as with electrical contractors and security installers.

If contractors want to differentiate themselves from the competition, they need to offer a low price and gain a solid reputation in the industry, according to the survey. Distributors can help them do just that.