CEDIA Survey: Custom Gaining Status Among Retailers
By Joseph Palenchar, TWICE The percentage of CEDIA members who do retail has inched up in recent years, reflecting retailers' growing involvement in the custom segment, said CEDIA executive director Billilynne Keller in analyzing the results of the association's annual membership survey. The survey found that 49 percent of members are retailers who do custom installation, while the rest do nothing but custom install. In comparison, the percentage of retail members was 48 percent in the 1998 survey, 45 percent in 1997, and 46 percent in 1996. In 1995, however, the percentage of retailer/installers was 48%, almost matching the current 49 percent. The survey also found that retail sales account for a growing share of revenues among CEDIA members who operate retail stores. That finding, too, reflects the growing influx of retailers entering the custom market, Keller claimed. ""Eventually, their custom divisions will grow"" to account for a growing proportion of their revenues, she said. Among the installer/retailers polled this year, retail accounted for 55 percent of revenues, up from 45 percent in 1998, 39 percent in 1997, 42 percent in 1996, and 35 percent in 1995. The 1999 survey also found that members' average annual custom-install revenues rose to $941,000 and total sales, including retail, rose to an average $1.63 million. Though up from 1998, those numbers are below their 1997 peaks - a change CEDIA attributes to a growing membership base that now includes a greater number of smaller businesses. That observation is borne out by the growing percentage of members working out of homes or commercial facilities, where rents are cheaper than in retail locations. In the 1999 survey, 33 percent of members operated their business in a retail location, down from the previous year's 42 percent. Nineteen percent operated their business out of a house, up from 15 percent in 1998. And 19 percent operated out of commercial facilities, such as industrial parks, up from 15 percent. The percentage operating out of showrooms, which could be in retail areas, but that don't cater to walk-in traffic, fell to 31 percent in 1999, from 1995's 35 percent. Wherever they locate their business, CEDIA members are an optimistic bunch. The survey found that 91 percent of polled CEDIA installers expect their revenues to grow by an average of 30 percent during the next year, almost matching the results of the previous years' surveys. Other survey results have remained relatively constant over the years. They include average number of employees, the average mix of equipment and labor dollars per job, the average length of a job, and installation venues (new construction, remodels and retrofits). On the other hand, sources of new business have changed more noticeably. Referrals from builders, for example, have grown as a new-business source, while referrals from architects and interior designers have declined. The percentage of members getting referrals from builders rose to 54 percent in the 1999 survey, from 33 percent in the 1995 survey. For those years, the number of members getting referrals from architects fell to 18 percent from 26 percent, and from interior designers to 1 percent from 19 percent. This year's survey was answered by 178 of the association's 810 members. Source: TWICE.com