1. Interest rates stifle some demand

Here’s the short of this, interest rates are up, thereby increasing borrowing costs and thus suppressing some types of demand. This is likely to impact pro AV as we go into 2024 as companies hedge a bit, shifting expenses around and perhaps delaying capital improvements.

Sure, pro AV still has a role to play, but it’s a headwind to larger growth, the type of which we’ve seen a lot of during the last two years of recovery.

Fortunately, AV has a lot of use cases and interest rates may begin to come down in 2024, but we have to call this out as a challenge for the year.

2. Distributors are challenged to keep what they won

AVIXA’s 2023 Industry Outlook and Trends Analysis (IOTA) report had a major headline within it – distributors have gained a share within the overall supply chain of pro AV.

So, on net, distributors won customers thanks to their ability to help companies navigate supply shortages, benefitting integrator responsiveness, revenues and margins. These shortages are slowly abating, removing some of this benefit and creating a possible reversion back to a more direct model, all other things being equal. That’s the point – there are plenty of other benefits to working through distribution.

Support for launching managed services, guidance on product and solution portfolio expansion, financing assistance and terms for AV as a service, along with straight-up inventory management. Distributors who demonstrate this best will keep their customers.

3. Hybrid work creates normalisation

Data on office usage is showing some consistent patterns now. On average companies are settling on a three-day in-office work week, leading to occupancy rates being about half of the pre-pandemic norms. At the same time, office leasing is actually growing, according to government data sources. Some of this is inflation in rents and some of it is a shift to higher class spaces.

AV-related spending has emphasised scalable, easy-to-use, plug-and-play options at lower cost, even as some more custom alternatives are deployed. As a result, growth rates on conferencing and collaboration are slowing into 2024 as companies settle into a normalised approach with longer replacement cycles.

Spending is still high, however, and within it, there are some underlying shifts in platforms, with associated winners and losers. Opportunities still abound.

4. Shift to the experience economy

While office space chugs along, a ground swell is occurring in all things experiences or any facility focused on entertaining and engaging audiences, guests, shoppers, and fans. Stadiums, museums, retail locations, theme parks, concert halls, resorts, casinos and even houses of worship are all a part of it. For the pinnacle of example look at the newly opened Sphere in Vegas.

It is AV at its utter finest.

These concepts represent the largest growth opportunity for pro AV in 2024 and beyond given the customised nature of the work. The increasing need for on and off-premise content distribution is an expanding part as well now that video is the new preferred medium for engagement. Wherever and however, these are the places to make sure your integration business is poised to serve.

 

This Tech Predictor is written by AVIXA vice president of market intelligence Sean Wargo. To find the rest of the Connected Tech Predictors for 2024, click on this link.