Promising quick installations and easy profits, the central vacuum industry looks to custom dealers to get its systems into American homes
By Joe Paone
Central vacuum, as a product category, has a big consumer awareness problem in this country.
Ask the average man or woman on the street about vacuuming, and they'll likely talk about the vacuum cleaners with which we all grew up—bulky machines that you plug into an outlet and walk around a room, machines to which the central vacuum industry refers as "portables." These consumers will ooh and ahh over the latest nationally advertised high-tech products from Oreck and Dyson, or they'll instinctively think of the hand-me-down Hoover they might use on a regular basis.
Mention central vacuum systems, however, and you're as likely as not to get a confused, blank stare, or in some cases, a statement on how prohibitively expensive such systems must be.
Give the central vacuum industry this: it's upfront about its awareness problem. But it's not about to give up the fight, either. It maintains that its products, which essentially suck dirt into conveniently placed inlets around the house and route it through pipes in the walls to safely ensconced repositories in the basement or the garage, provide a superior cleaning solution to portables, and are much easier to use.
"The benefits are definitely there," says Randy Collis, sales and marketing manager for central vacuum manufacturer Hayden. "It's just a matter of education."
"It's been 40 years, waiting for this market to happen," says Grant Olewiler, general manager at M.D. Manufacturing. "In the U.S., it hasn't happened yet. But we're poised for marketing to the high end. This is truly a sleeping giant awaiting a major growth explosion."
"We have an awareness problem," says Paul Runyan, Beam Industries' national sales manager. "Not enough people know about central vacuum. We as an industry need to improve promoting central vacuum systems and the fact that we help solve indoor air quality issues."
A PURE INSTALL PLAY
Even though central vacuum is not on the minds of most Americans, it's not really a retail product anyway. Requiring pre-installation into a new home, or tearing into walls in a retrofit situation, it's a pure install play. Traditionally, the industry has sold its systems through distributors, wholesalers, appliance dealers, and installers of security systems. In America, at least, it's done all of this to marginal effect for decades.
Now, the industry recognizes a new opportunity to get its systems into American homes—namely, it wants to work with builders, custom home theater/home automation installers and C-tailers (mostly through distributors) to make central vacuum systems as common in new homes as pre-wiring. With consumers more aware and eager to enjoy the benefits of pre-wired entertainment and communications infrastructure, central vacuum manufacturers feel their products can be part of an already attractive turnkey mix, as well as intriguing add-on to the roster in a retrofit installation.
The message to dealers, installers and builders is simple: Install a central vacuum system at the same time you install everything else. Manufacturers promise that such installations are quick (usually much less than a day's labor), relatively simple and, most importantly, highly profitable. Central vacuum manufacturers also are trying to make consumers aware that a typical system can be installed for as little as $1,000 to $1,500, which picks up right above where many of the high-end portables leave off.
"Next to audio/video, we're the second-highest gross profit product among products that low-voltage dealers sell," says Runyan. "Our dealers make around 50 percent profit. It's a great business for the dealers. As the low-volt industry is growing, there is a need for the dealers to sell more high profit items, and that's why a lot of dealers are taking a stronger look at central vacuum systems."
Runyan adds that C-tailers who add central vacuum to their product portfolio increase their attractiveness to builders. "It's a fit because the builder wants you to bump him a lot more products," he says. "The builder wants to bundle more products in there." In addition, Runyan says builders are looking for air quality solutions, and central vacuum is a great fit in that regard.
Says Collis, "Consider this: you're already at the house." Why not take advantage of that, he says, and easily install a high-margin product?
While most central vacuum business is likely to gravitate towards new construction, manufacturers stress that retrofit is also a market waiting to be tapped, and not much more taxing on the installer. In fact, there are advantages, says Runyan.
"The benefit of retrofit is that you get paid that day," he explains. "You make full margin [in retrofit], because the builder [in a new construction situation] is always going to ask you for a discount." About 95 percent of existing American homes can be retrofitted for central vacuum, he adds.
Most manufacturers say their systems generally require one inlet for every 700 to 900 square feet in a house.
BIG BUSINESS IN CANADA, SCANDINAVIA
Interestingly, central vacuum is a popular product in Canada. According to Collis, about 20 percent of Canadian homes have central vacuums; in the province of Ontario, the figure is a stunning 90 percent. Often, the piping and inlets for the systems, sans the core power unit, is roughed in to the house as a matter of course before the homeowner moves in; afterwards, the homeowner can choose to complete the installation.
Conversely, Collis says central vacuum systems reside in only four percent of American homes, with most of those installations in the northern states that border Canada. "Unlike the southern United States, every house up here in Canada has carpet," explains Collis.
However, central vacuum is also quite popular in Scandinavia, where carpet is highly uncommon. Many manufacturers offer attachments and kits that allow their systems to work on tile, hardwood floors and other surfaces. Armed with this technology, these companies hope to drum up business in new construction, much of it carpetless, in the Sun Belt.
Central vacuum manufacturers aren't only seeking to educate American consumers. They're also seeking to educate custom retailers and installers. The methods they use vary—online courses, seminars at distributors' facilities, evangelizing sales reps. Some manufacturers also offer other programs, such as co-ops.
LESS DIRT, CLEANER AIR
Central vacuum vendors invariably play up two benefits of their systems. One, obviously, is their vacuuming power compared to portable vacuum cleaners. The other, however, is the removal of allergens and dust that can cause asthma attacks, which pits the category as much against air purification systems as competing portable vacuums. Central vacuum systems, they add, don't re-circulate dirt in the house like many portables may. In essence, the message these vendors send about their products is "less dirt, cleaner air."
"Your portable vacuum cleaner just does not seal," maintains Runyan. "You're still dumping X amount of allergens back into the living spaces. You buy a $59 vacuum cleaner, and you're going to spew a lot of dirt in the house. If you buy a $699, high-end portable vacuum cleaner, you're still going to spew some stuff into the house. We don't have that problem with central vacuum. We're taking all that stuff out of the living area."
Other advantages frequently discussed include the fact that the systems are less noisy than portables, that having one installed enhances the resale value of a house, and that using a central vacuum as opposed to a portable extends the life of carpet.
Some manufacturers are even looking to tie their products into home automation systems or applications. Among them, M.D. Manufacturing may be the most detailed about its plans. Its MD AirForce product uses the Universal Powerline Bus, which circumvents the need for low-voltage wiring. Olewiler says the installer can use the powerline technology to turn the central vacuum system off if the phone or doorbell rings, or if a fire or burglar alarm goes off in the house. Down the road, he envisions a system sending an e-mail to its owner to advise of routine maintenance issues, or to a caregiver that the elderly person who owns the system hasn't used it in some time.
Companies in the central vacuum industry, predictably, like to compare their products' strengths to their competitors' relative weaknesses, and position their systems as the best available. Some say their products run more quietly than others, have more suction, recirculate less dust. Some perform better on certain surfaces than others. There's no dominant presence in the market, and we've yet to see any national TV ads for the category.
Still, the industry shares a common goal: to create awareness, and to get their products into as many American homes as possible. C-tailers might do well to leverage their roles as potential agents of this process.