It's been a rollercoaster year for everyone. No matter if you own your own business or are working for someone else, the down economy has affected everyone in every market segment. Chances are that you've taken a good look at your finances to see where you can cut back. The good news is that the personal savings rate is going up; the bad news is that perceived luxury items like custom AV integration have taken a hit.

As we move from a tumultuous 2009 into hopefully a more stable 2010, here are some trends we see that are happening in the custom integration market today:

(1) Customers are fearful - hanging onto their cash and staying home

"The business has changed. Custom installers are moving away from brick and mortar storefronts. Instead, more and more are making visits to the clients' homes," says Trent Davis, product manager for Audio Authority Corporation in Lexington, KY. "The way they sell has changed too, with a focus selling systems rather than a focus on moving boxes."

Michael Austin, sales manager at Marketing Concepts in San Antonio, TX, says, "There is a fear factor with lot of customers. Fear of job loss and a tanking economy are keeping people away. The constant drum beat of economic doom from TV news isn't helping."

Pam Garritt, president and CEO of TechRowe Solutions in Accokeek, MD, feels that the recessionary pressure "is getting better, but homeowners are staying in their homes longer."

(2) Technology use and preference is changing

Austin notes that technology found in home AV systems is changing. "Old head-end systems are giving way to network-based AV systems," he says. "Manufacturers who do something unique and different will still get people's attention. They will find the money to buy it."

Davis says that there is a bigger emphasis on whole house AV and whole house content consumption these days. "The great thing about digital products is that people view them as the sum of their specs. A new feature or new technology may be enough to make the customer loosen their grip on money," he explains. "You have to answer the question: Is it enough of a value proposition? On larger installed systems, finding the value proposition may mean using more middle market products than high-end esoteric products. Show the client that you are spending their money wisely."

(3) Conspicuous consumption is over

"Customers are moving to more automated systems that makes home life more convenient. Customers want systems that are more affordable without losing the convenience," says Garritt. "Components need to be hidden. Installs need to have a clean look."

A clean install also means that friends and neighbors can't "Ooohhh" and "Ahhhh" at how much a client spent on all the components in his or her new AV system. 

(4) A shake-out has occurred

The pain of this year has meant that many custom installers have gone out of business, a sight that no one wants to see. But, Davis says, "There was an oversaturation of home AV installers that was only sustained by the overgrowth of housing. Plus, distributors were selling to anyone."

Austin adds, "As network connectivity increases, the installers with no tech savvy have gone away. In a good economy, anyone can be a home AV installer. The survivors are the smart business people who have good relationships with the bank and with their customers."

(5) There is hope for recovery in 2010

From a manufacturer's perspective, Davis says that his company is still selling products and there are people out there who have money. "Those who spend on custom integration are typically higher on the economic ladder. People who've been holding off on AV may start spending once things like bonuses come back and home equity loans are easier to get," he says. "I feel as if the worst is over. 2010 will be a strong recovery year but we will not see 2007 numbers for a while."

Linda Seid Frembes is a rAVe columnist who covers AV technology, installs, market trends and industry news. Linda has worked with high profile AV manufacturers, trade organization, systems integrators, rep firms and dealer/distributors in the industry including John Lyons Systems, Eastern Acoustic Works (EAW), Northern Sound & Light (NSL), and InfoComm International, among others.