2015 Remodeling Trends for Electrical Contractors
The home improvement industry regularly tracks trends that impact the way contractors do business. Whether it's implementing mobile technology, targeting a new audience or exploring additional product offerings, as we head into the second half of 2015, we'll look at the trends impacting electrical contractors and how you can leverage them to help boost sales.
State of the Industry
According to an IBIS1 report released in March 2015, electrical contractors saw decreased demand because of the recession. The industry, however, is rebounding due to the improved economy and increased construction activity and is expected to fully recover within the next five years. While growth is driven primarily by new construction, IBIS also reports an increase in renovation and retrofitting activity, particularly energy-efficient projects.
Harvard University’s Joint Center for Housing Studies recently announced findings from its “Emerging Trends in the Remodeling Market”2 that echo the IBIS report, noting the more than $300 billion in spending in 2014.
Green is the Future
You’ve heard for years the importance of sustainable building. Industry reports, paired with GreenSky data, indicate a prosperous sustainability category. At GreenSky, we have seen a 40.8 percent year-over-year increase in average loan amount, specifically in the alternative energy category, and year-over-year solar installation loan amounts are up 10.2 percent.
The US residential solar market alone saw 76 percent year-over-year growth from the first quarter of 2014 to the first quarter of 2015, shattering previous records, according to the Solar Energy Industries Association.4 While California leads the country in residential solar installation, other states are catching up, including Arizona, North Carolina, Massachusetts, New Jersey, Hawaii, Georgia, Texas and New York.5
Smart thermostats and smart metering are also on track to replace HVAC management systems of yesterday. U.S. utilities are fast approaching the point where smart meters are the norm, not the exception, with nearly 50 million networked, two-way communicating smart meters up and running across the country as of July 2014. That accounts for 43 percent of the country, up from about 33 percent as of mid-2012.6
The changing landscape of sustainability means it’s imperative to understand how to market your services and become a green-living resource for potential clients. One simple way to become a green business is to implement, and market, a recycling program and remove the waste and old products from a renovation or construction site. You can also create a dedicated sustainability coordinator position within your company who manages the recycling program, as well as certifications and education sessions on a local, regional and national level.
Joining the U.S. Green Building Council, which manages the Leadership in Energy and Environmental Design (LEED) program, is also a smart option. Any business can join the Council, which is a great way to network, share ideas and stay updated on regulation changes. The Council also provides contractors the opportunity to become LEED Accredited Professionals, adding credibility to your company as a leading sustainable business.
Take advantage of all opportunities to learn, whether that’s tapping the knowledge of experts, such as architects and general contractors in your market, who are already working in the green building space, or signing up for newsletters and following local and state-level laws as it pertains to sustainable building.7
Baby Boomers Are A Booming Business
There are more than 76 million Baby Boomers in the US, and by the end of 2015, this generation will make up 70 percent of the country’s wealth.
According to a recent survey of more than 4,000 Baby Boomers by the Demand Institute8, 63 percent plan to “age in place,” meaning they will not move from their current home, and 39 percent are planning a major home improvement in the next three years. While Millennials are up-and-coming, they don’t spend as heavily on home improvements as the more established Baby Boomer population, which means that while it’s important to start thinking about how to market to future homeowners, it’s crucial to capture the attention of those spending money now.
Marketing to Baby Boomers means understanding how they consume information. An estimated 79 percent of Baby Boomers regularly use the Internet, but less than half use smartphones to check email or go online. A recent study by DMN39 shows the top three online activities of Baby Boomers are using a search engine (96 percent), using email (95 percent) and shopping for products or services (92 percent). However, not all Baby Boomers are alike and “old school” tactics, like direct mail or even telephone, are still relevant. This audience is savvy and they care about benefits more so than features. Presenting a product as a solution to a problem is effective, and easy communication is vital, such as visible company contact information and easily navigable websites.
As Baby Boomers look to “age in place,” you should determine what types of renovations are appropriate and age-friendly. Become the resource for general contractors in what projects this audience is looking for, whether it’s installing additional lighting or updating electrical wiring.
Mobile Technology Is Not An Option
Mobile technology has become a part of our everyday lives, but how does it fit into electrical contracting industry?
While the number of mobile users continues to grow10, mobile technology is still an untapped opportunity area for contractors who lag their counterparts in other industries. In a survey conducted by Huthwaite11, a sales performance improvement organization, the majority of respondents indicated that smartphones gave a competitive edge regarding sales. However, only 54 percent of contractors have an internet-enabled smartphone12.
There are several great tools available for electrical contractors, such as apps that deliver quick answers to questions on sizing, design, product selection, critical values and code requirements. In addition to mobile apps, you should consider updating your company’s website with a responsive web design for easy viewing and navigation across multiple platforms, like smartphones, tablets and desktops.
Consumers spend more time on mobile devices than on desktops and laptops13, which is a data point supported by Google’s new search algorithm that favors mobile-friendly websites, giving them higher search rankings than sites only optimized for desktops. Companies that leverage technology and mobile apps to meet consumers where they spend the most time are the ones streamlining their business and driving higher traffic and, ultimately, increased sales.
There are many trends affecting electrical contractors, but as you keep up with the rapidly changing industry, it’s important to focus on those that will have the most impact on your profitability. Whether you decide to tackle one area of your business every month, every six months or every year, the crucial takeaway is to continuously educate yourself to maintain relevance and become an even more valued resource for your business partners and clients.
- IBIS World
- The Joint Center for Housing Studies of Harvard University
- Cabling Install
- Solar Energy Industries Association
- Tech Republic
- Demand Institute
- The Radicati Group
- Randall Reilly Construction
- Mary Meeker’s Internet Trend Report
Del Ross is the EVP of Marketing at GreenSky Credit. GreenSky simplifies how businesses offer financing to their customers. With a fast, paperless and mobile-friendly solution, GreenSky enables point-of-sale payment and credit programs that help homeowners complete important projects.