HVAC contractors: It is time to get involved in the smart home market. If you don’t, I fear you will be looking back in three to five years, kicking yourself for passing on a golden opportunity.
Why? First, let’s look at the numbers, because they certainly tell a story. The number of smartphone users in the U.S. is estimated at 257.3 million. A total of 24 percent of American households have a smart speaker. Analysts estimate that 477 million smart home devices will be shipped globally in 2020. Also by 2020, experts are expecting 5.5 smart devices per home.
Just think about your homes. I have two kids, so when we add together the family’s smartphones, tablets, speakers, video game systems, etc., I conservatively hit 15 smart devices in the Gargaro house.
This market is a tidal wave, and HVAC contractors would be wise to figure out how to ride that wave. It seems that everything electrical will soon become connected — if it hasn’t already.
The smart home consumer electronics market is growing out of its infancy. The early adopters are locked in, and now it has hit the general public. What does that mean? It means the Do It Yourself’ers (DIY’ers) already have their smart products, and those buying them now would prefer a professional to get everything up and running.
Before, everyone was buying a single product from a retailer. Now, they are starting to look for an ecosystem where all the products can work together. This is where HVAC contractors come in to the equation.
Now I have sat through enough smart home seminars with contractors to realize what the push back will be … the margins are too small. Homeowners are buying their own smart thermostat. Consumers know exactly how much the product should cost.
Gene LaNois, head of pro channel at Nest, has an answer for all these concern: You’re right.
“If you are expecting the consumer electronics smart home business to give you the same margins as the HVAC business, you are wrong,” LaNois said. “It is a different business. But you can use this to supplement your business. If you focus on one product and the price, you are going to miss the message. Stop expecting consumer electronics to conform to the business you are in and figure out how you can use this industry to help the business you are in.”
The message is fairly simple. Entering the smart home/device market does not take away anything from what you already do in your business. Everything an HVAC contractor is doing today, they can certainly continue to do tomorrow.
But the smart home market is a way for contractors to build incremental business that might be lower in margins but will still raise revenue. There are many other benefits of jumping into this market. This includes getting new customers, keeping techs busy, getting in more homes, and helping ride out shoulder seasons.
Homeowners want smart thermostats, security systems, garage doors, lighting, etc., but nobody know where to buy it. Who do they call? A security company, an electrician, The Home Depot? There is still time to establish that. In your market, make sure the answer is your company.
LaNois has another tip for HVAC contractors looking to increase their bottom lines — doorbells.
“It is the hottest space, and there is no go-to place for installation,” he said. “I don’t know anyone who does not want a video door bell. With the amount of package deliveries that people get, this is a very popular product. It is just 24 V and two wires. Easy to mark up. Get your techs doing this.”
The time is right for HVAC contractors to enter the smart home electronics market — all that it entails.
Publication date: 4/29/2019