Analysis: UK installed AV market survey13 May 2016
Our latest survey takes the temperature of the UK installation market – on the eve of a historic EU membership referendum.
These are turbulent times in the intersection of UK politics and business: negotiations are still under way to formulate a management buyout of the troubled Tata steelworks in Port Talbot, south Wales, with the government committing to a 25% stake – following criticism from some quarters that it responded much more quickly and effectively to prop up the banks during the financial crisis. And next month, the country will go to the polls for a referendum on its continued membership of the EU.
However, when we look at the results of our latest survey into the installed AV market in the UK, the findings are pretty positive. Only a tiny minority of respondents felt that confidence levels in the UK installation sector were falling; the remainder were almost equally split between those who felt it was rising and those who felt it was the same, compared with six months ago.
Similarly, when it came to projections for respondents’ own company revenues, the mood was upbeat on average: there was a roughly equal three-way split between growing by more than 5%, growing by up to 5%, and no change.
When it came to issues causing concerns to the business, the overwhelming leader was ‘Clients going for lowest price rather than best value’. One respondent commented: “In many cases procurement have too much power in the decision making process, resulting in a focus on short term cost reduction rather than quality and long term return on investment.”
The managing director of a major corporate integrator had a worrying comment on the ramifications of AV-IT integration: “With the convergence of IT and AV now fully established on many large projects, the procurement strategy adopts the ‘tin’ approach. However, the AV industry has never managed to achieve services costs to match that of IT, therefore, the industry gets degraded.”
We also asked our respondents for the advice they would give new entrants to the market. One distributor had this advice for manufacturers: “Choose a single distributor. Give them exclusivity and help build the market slowly rather than flood it with product.”
Another distributor had this advice for new UK integrators: “Work with a distribution partner who can support you with pre-sales qualification and post sales support.” Not all of the advice given was about distribution, though; another respondent had this suggestion: “Specialise in a market or product set as offering everything to everyone is non-scalable and expensive.”
The final word goes to the integrator MD quoted earlier. In response to the question ‘If you could change how the installation market works in the UK, what would it be?’, he said simply: “Regulate standards of delivery.” We suspect a lot of our other respondents would agree with that.