Articles and whitepapers

Business Issues: A Structured Approach to Pre-Wiring for Property Developers (1/9/2007)

By Adrian Ickeringill, Armour Home Electronics

For a number of years, integrators and installers have been marketing multiroom entertainment to the developer as a pre-wire solution for homebuyers. Going back as far as the early 90's, Systemline has been marketing to the developer channel as an option for the homebuyer on mid- and high-end developments. However, due to the complex nature of running combinations of cables, the need to site equipment at a central point and the requirement for specialist programming, the inclusion of multiroom systems as an option has often proved a costly headache for the developer. Not surprisingly, this has left them very wary of including a multiroom option in their current builds.

Simply rebuilding on a piece of land throws up enough issues without having to worry about home entertainment systems. Developers are being pressurised to build on brown-field sites that often prove costly due to clearing polluted land, increased land and building costs during construction, and an ever-increasing number of stringent building regulations. The only reason why they would embrace home entertainment is if they can make faster, more profitable sales.

A structured approach

In contrast to the sales pitch in the custom install market which refers to zones, inputs and the like, sales in the new-build sector have to be structured, easy to follow and create a 'wow' effect for the customer. Remember, the customer is choosing this multiroom option versus the alternatives of carpets, curtains, outdoor sheds etc.

Extract from St James Homes brochure that explains the home entertainment system in simple terms.

On large developments of 50+ homes, the structured approach that involves set numbers of rooms and specific cabling for interfaces is the only way to properly manage upgrades from both the installer and developer's point of view. It is essential that the addition of multiroom entertainment compliments the development, and at no point interrupts its build schedule.

Extract from St James Homes brochure showing an example apartment with single-source audio in three rooms. Examples for up to six audio sources in four rooms are also included in the brochure.

Partnering with integrators and developers

From our point of view, it took the 2004 launch of Systemline Modular, the Cat5-based multiroom system from Armour Home Electronics, to change developers' perceptions. Systemline Modular offers a flexible home entertainment solution on a simple wiring platform.

We looked at how multiroom products were sold into the developer channel, and we made three key decisions. Firstly, to develop a network of qualified, site-savvy integrators. Secondly, to sell only through the installer, and lastly, to support the developer's showhomes, in order to maximise sell-through.

The partnership we have created with our 80 pre-wire integrators and their developers has helped to create confidence in multiroom systems. Systemline integrators typically offer a 'one stop shop' in terms of access control, home networking, electrical and aerial installation, as well as the multiroom entertainment wiring. In addition, we also have more conventional installers who project manage the cabling via CAD plans, ensuring the on-site electrician installs the correct cables to the right locations.

Once cabling is in place and the showhome system is up and running, the focus switches to support for the showhome staff. Along with our integrator partners, Armour personnel, which include dedicated Showhome Merchandisers, assist with the launch weekend and maintain regular visits.

In the battle for sales, the showhome is the front line. Success or failure on a site depends on the showhome staff selling the development. They need to be confident of how the system works, have FAQ's for customers and support from both the integrator and manufacturer as back up. In our experience, up to 90% or more of upsales (optional extras) on pre-wire projects can be achieved when the showhome staff are confident about promoting the simple tick box options for Systemline Modular.

Bronze, Silver and Gold packages help to simplify the options, and often this is a sale closed by the showhome staff to the homebuyer as an integral part of the house sale. In these cases, it may even be included in the price and added to the mortgage.

Extract from St James Homes brochure, showing Bronze, Silver and Gold options for home entertainment, as part of the 'Apartment and House Options' section.

Current trends

After three years of experience in this sector, we are finding more and more developers embracing the concept of multiroom entertainment, even to the point of part-fitting systems as an integral part of their product. Customer expectations have also changed, with awareness of multiroom home entertainment growing constantly. In fact a growing trend for developers is to advertise the offer of multiroom audio, and even promote 'wired for sound' weekends - all of which enhances the potential homebuyer's awareness.

Extract from George Wimpey advertisement for luxury waterside apartments with multiroom audio built in.

By 2006 over 1300 complete Systemline Modular systems were fitted as standard by developers. Already for 2007, we have over 1750 standard-fit installations, before we even start to count the potential take up from all the pre-wired properties. In fact Systemline Modular is currently involved in over 240 showhomes throughout the UK, relating to nearly 20,000 new homes.

Conclusion

Developers are seeing the positive response from end-consumers when they adopt the concept of multiroom as part of their offering, and are enjoying the additional revenue from upgrades.

When you look at markets such as North America, the inclusion of multiroom entertainment and home networking has tipped the balance. Over 50% of new homes have either pre-cabled or at least some element of a part-fitted system as standard. Inducements, such as £10k cash back, fitted kitchens, conservatories etc., are among the limited options developers have for differentiating their offering from their competitors'. So the option of a built-in home entertainment system, which really does provide the 'wow' factor and attract the home buyer to a life-enhancing property, can make all the difference.

Adrian Ickeringill is the Modular Sales Manager for Armour Home Electronics - part of the Armour Group that designs, manufactures and distributes products for the home and in-car entertainment markets.

www.armourhe.co.uk