As industry stakeholders continue to wrap their minds around the effects of the global COVID-19 pandemic, CEDIA is providing another tool to help fill in the blanks. In an effort to help industry manufacturers and suppliers better understand key challenges and opportunities facing integrators and industry tradespeople, CEDIA has announced results of a study examining overall sentiment and project behaviors of CEDIA professionals. The online survey, a collaboration with The Farnsworth Group, was conducted between April 13-28, 2020. The results include data from nearly 350 professionals in the United States, Canada, and United Kingdom who do at least half of their work in the residential space.
The Farnsworth Group Partner and Director of Business Development Grant Farnsworth joined CEDIA EMEA Brand and Communications Manager James Bliss for a webinar exploring the findings and offering analysis and practical points about the findings.
"I think there's a lot of expectations or assumptions out there about what this means -- particularly for the contractor or pro side of our business," Farnsworth said. "When we look at the overall impact and ask that question, it's not a big shock that there is a large negative sentiment out there in regard to how COVID is impacting their business." He added that smaller firms, or those with annual revenue of less than $500,000, are feeling squeezed more than firms with revenue of more than $2 million. Smaller firms bearing a larger impact, Farnsworth says, is a trend seen throughout the global economy at large.
A look at the overall results shows 64% of U.K. respondents and 54% of U.S. and Canada respondents say COVID-19 had a big negative impact on business. While 33% in the U.S. and Canada and 29% in the U.K. characterized COVID as a small negative impact. Only 5% in the U.S. and Canada and 4% in the U.K. registered no impact. And even smaller number — 6% of U.S. and Canada respondents and 1% of U.K. respondents noted a small positive impact.
Farnsworth discussed other construction professionals and contractors in related fields "to shed a little more light on maybe what is happening more dynamically" in the economy. He said that numbers tracking the home improvement industry as a whole are showing that the severity of the negative sentiments are actually starting to lessen. Suggesting, he says, that the week-to-week assessments of other contractor segments within the residential space show the worst of economic sentiments may have bottomed out at the end of April and he currently sees "slight signs of reduced negativity."
Productivity Impact
Both segments (U.K. and U.S./Canada) are experiencing a major negative impact with regard to the amount of work being done — a collective dip of 80-90% less work — and the professionals surveyed in the U.K. are expressing the productivity lag to a higher degree.
"I think something that's worth noting right off the bat is (the U.K.) is under one set of legislation here," Bliss notes. "The governmental/national/federal legislation equivalent here is covering everybody, so there's no local legislation as to who can or can't be on site." Early on in the U.K., there was a national break for on-site construction projects, while in the U.S. especially, the open or closed nature of projects varied municipality-to-municipality.
Additional Productivity Findings
- More than 90% of all respondents have experienced COVID-19-related delays or stoppages in the 2-3 weeks leading up to their survey participation
- Respondents believe the most common causes of delays or stoppages include: Homeowners not wanting contractors in their home (79% in U.S. and Canada, 71% in the U.K.); Government mandate/policy (61% in the U.K., 50% in the U.S. and Canada); Homeowner became concerned about finances (48% in the U.S. and Canada, 36% in the U.K.); Don’t feel comfortable being in close contact with others (56% in the U.K. and 37 percent in the U.S. and Canada)
- Most respondents (66% in the U.K. and 64% in the U.S. and Canada) think delays or stoppages will last 1-3 months
Overall, Farnsworth says mindfulness is the key in relationships among integrators, manufacturers, dealers, suppliers, and all other stakeholders as we navigate the future. He says key considerations include how and where interactions and deliveries will take place and which parties will be the conduits of commerce.
"Do some research on your own," he urges, "to understand what your customer behaviors are and how they have changed over the last month or two. Because, what you might have relied on, you know, six months ago or 12 months ago 'they all come in-store, they all pick it up, we have great conversations' — that may not be happening now and we may see some of these behaviors remain for years to come." Channels could be shifting, opening up potential opportunities if businesses are able to position themselves effectively.
Additional Results:
Workforce Findings
- 71% of respondents in the U.K. and 46% of respondents in the U.S. and Canada say they have proceeded with layoffs or furloughs
- The majority of companies (75% in the U.S. and Canada and 69% in the U.K.) are applying for government assistance
- The top ways respondents say they plan to shift business during the crisis include: spending more time on technical training; developing new services and researching new products to sell; retooling their marketing presence and website
Expectations Going Forward
- 56% of respondents in the U.S. and Canada and 47% of U.K. respondents said they were extremely concerned about future business impacts due to COVID-19
- The top concerns for the future among all respondents include: finances — paying bills (64% in U.K., 61% in U.S. and Canada); personal or staff health and safety (58% for each group); ability to get leads/project requests (61% in U.K.; 50% in U.S. and Canada)
- 55% of respondents in the U.K. and 48% of respondents in the U.S. and Canada expect to take in much less revenue during the coming months
- With regard to the length of time respondents expect to operate at lower revenue before they have difficulty: 39% in the U.K. and 28% in the U.S. and Canada say 1-3 months; 31% in the U.K. and 27% in the U.S. and Canada say 3-6 months; 21% in the U.S. and Canada and 15% in the U.K. say 6-12 months
Bliss says the massive lockdowns have opened the door potentially for integrators since consumers have been forced to be more hands on for more time with their technology at home — be it from a home office or while experiencing digitally-delivered entertainment.
"How frustrated will some of those people have been with their connection while they've been stuck at home? The opportunity is going to lie immediately after this when people realize their network is not what it should be and they've had to experience that in a really tough way" if, for example, important video conferences are dropped with the increased strain on bandwidth. He continued "I think the shift toward broadband as the real fourth utility will start to move in the consumer's mind even further, having been forced to experience it at its worst almost certainly at some point over the last month."
Farnsworth closed by providing some examples of how manufacturers and suppliers may be able to capitalize going forward. A main heading involves support and how integrators will need to understand how to generate more business, be it through education and training offerings; products or services; sales materials; or even lead generation. Farnsworth says research shows integrators and contractors will see a shift toward something they have necessarily had to do in recent years — actively seek to gain business. "Dig, dig, dig into your category, into your customer to really understand where you can be effective in those support areas," he said. With a return to work beginning to come more into focus, Farnsworth says customers' need for better connectivity at home and enhanced home entertainment options could be on the rise.
Deeper details on the study results, including demographic figures of respondents, are available to CEDIA members by clicking here.