Research Frontiers Incorporated, Woodbury, NY
Key Words: Switchable glazings Marketing research
| ABSTRACT The twenty-first century has ushered in an era marked by the growing integration of technology and other scientific advances into commercial buildings and residential homes. Of particular interest to many architects, developers and builders are "switchable" glazings, a new category of technologically advanced glass and plastic building materials that can be used to control light, glare and heat entering an office or a home. Interest in switchable glazing technology is influenced by a variety of factors, including a growing movement to offer sustainable, energy-efficient building solutions, and the emerging desire by users to maintain greater control over their working and living environments. This paper examines the movement toward sustainable development and the end-user needs that are driving it. Further, it presents the results of a proprietary survey research study of United States architects on the subject of switchable glazings. This study includes an examination of the attributes most desired by architects regarding smart window technology, and provides additional insight into the potential application of this smart material to the building community. INTRODUCTION Switchable glazings, more commonly referred to as "smart" glass or plastic depending on the substrate with which they are integrated, are an emerging category of products that use electrical voltage or current to manage light passing through glass or plastic. Switchable glazings have applicability for a growing number of product applications including windows, interior partitions, skylights, automotive mirrors and sunvisors, eyewear, appliances, instruments, flat panel displays, advertising signage and more. Various types of switchable glazings exist, including electrochromic (EC), liquid crystal (LC), and suspended particle device (SPD). Each type has its own distinctive physical properties and performance characteristics, and these differentiating features, coupled with the timing of their respective introductions, influences the current landscape of product diffusion in the marketplace. | The business literature readily acknowledges that product categories move through a series of major stages known as the product life cycle (PLC). These stages begin with the introduction stage, advance to the growth and maturity stages, and conclude with a period of decline [1]. A variety of data signal that switchable glazings are in the introductory stage of their PLC, a stage characterized by low levels of product knowledge and sales volumes that are growing but below longer-term expectations [2]. Recent evidence indicates that although market awareness of switchables is moderately strong, knowledge of the product category is limited. For example, a 2000 study of United States window manufacturers reported that 71.7% of executives and managers involved in new product development or product planning were aware of switchable glass. However, knowledge of specific characteristics of switchable glass was limited, with only a portion of all respondents able to able to cite even the most basic properties of products in the category. [3]. Further, industry sales for switchable glazings are modest relative to their promising medium-term forecast. A 2002 study by the Freedonia Group (Cleveland, OH) reports that demand for smart glass in the United States is projected to grow at a compound annual rate of approximately 20.0% through 2006 to $445 million [4]. This rate of industry growth is nearly five times the 4.3% compound annual growth rate of total flat glass sales by U.S. producers from 1997 through 2002 [5]. Advanced flat glass, of which smart glass is a segment that also includes reflective glass, security glass and other niche glass products, is expected to account for 22% of the total amount of fabricated glass in the United States by 2006 [6]. To the extent that these rates of growth are duplicated in other regions of the world, a high probability exists that switchable glazings will be among the leading new classes of technology products in coming years. DRIVING FORCES Robust forecasted growth rates in the switchable glazings market are influenced by a set of factors that are expected to propel demand in the near-term. These factors, known |
| as driving forces, are "the major underlying causes of changing industry and competitive conditions" [7]. Several driving forces are influencing the rising levels of demand for switchables in the architectural market. These forces are consistent with the heightened level of attention devoted to sustainable building designs that attempt to minimize environmental impact, manage costs, and maximize user well-being and productivity. These driving forces are briefly outlined below. Large-Scale Introduction of Smart Glass The Freedonia Group (2002) claims that demand for switchable glazings is driven by the large-scale introduction of these products for residential homes and commercial buildings, further noting that windows using smart glass "offer unprecedented control, aesthetics, and energy efficiency" [6]. Market demand of a product category can fall short of its maximum potential when several conditions exist, including end-users' lack of product awareness and producer-imposed limits on product availability and service. Large-scale introduction of switchable glazings likely will be associated with increased aggregate marketing and promotional investments that should raise both awareness and interest at the end-user and business levels. Likewise, accelerating sales volumes should support incremental investments in the distribution infrastructure, further expanding the availability of switchables. Steadily Rising Demand for Windows and Doors Worldwide demand for windows and doors is expected to climb by 5.7% annually to $147 billion by 2007 [8]. Increased income levels and growth in average home size will support consumer demand for these products that are ideally suited for switchable glazings. These forecasts are consistent with the expected growth rates in U.S. home improvement spending over the next several years. The Home Improvement Research Institute forecasts U.S. home improvement spending in 2007 of $254 billion. This amount is based on a 4.6% annualized growth rate in spending from 2003 through 2007 [9]. Interest in Quality-of-life Enabling Technologies Recent global trends in technology demand highlight consumer interest in products that improve productivity or offer greater flexibility and control [10]. For many people, such technologies are central to supporting one's quality of life. An example of this driving force is the rapid diffusion of personal computers in the U.S. By 2001, personal computers were in 56 million households, equivalent to a 52.3% penetration rate of all households in the country, and more than three times the 1990 incidence rate [11]. Another example is the high level of consumer interest in personal digital assistants (PDAs). Worldwide sales of | PDAs totaled nearly 15 million units in 2003, and are forecast to grow at an annual rate of 18.3% through 2007 [12]. A trend toward technologically advanced smart homes also is observed in residential housing. ABI Research reports that the home automation controls market, estimated to be $1.5 billion in 2003, will grow at an annual rate of 20.4% through 2008 to $3.8 billion [13]. In addition, smart homes of the new millennium will have independent networks controlling various systems including communications, entertainment, lighting, heating, and security [14]. A recent study found consumers highly attracted to the convenience that smart homes offer, with the greatest level of consumer appeal in the area of climate and lighting monitoring and control [15]. This trend toward home automation is especially supportive of the growth of switchable glazings, which easily can be integrated into these systems to support the energy savings, security, and aesthetic objectives of homeowners and commercial developers. Positive Impact of Daylighting In addition to reduced energy costs associated with the introduction of effective daylighting into building environments, a growing body of evidence indicates the use of daylighting provides significant benefits in terms of added productivity and comfort for a building's occupants. According to the Green Mountain Institute, the leading factors that improve worker productivity are (most important listed first): 1.) the quality of lighting, 2,) high levels of daylighting, 3.) increased individual control over the workplace environment, 4.) improved acoustics, and 5.) improved indoor air quality [16]. Several studies indicate that occupant productivity can be increased 15- 20% with proper daylighting [17]. Such gains in productivity can increase an organization's profit. A comparative study of the impact of daylighting on sales at a large retail store chain found that the use of skylights to introduce daylighting increased sales by 40% [18]. Movement Toward Increased Energy Efficiency Consumers and businesses alike are under growing pressure to stabilize or reduce costs associated with energy consumption. Recent trends in US energy consumption indicate the nation's energy use is growing at a modest but somewhat unabated pace. From 1990 through 2002, residential energy consumption grew at an annual rate of 1.8%, while consumption in the commercial sector grew at an annualized rate of 2.3% [19]. Worldwide energy consumption is expected to grow at much faster rates than that which has been observed recently in the U.S. The United States Energy Information Administration forecasts worldwide consumption of commercial energy will increase 58% by 2028 [20]. |
| Despite the steady growth in aggregate energy consumption, evidence suggests efforts toward improved energy efficiency are gaining ground. The International Energy Agency (IEA) reports that the economies of its member countries have reduced their energy consumption per unit of gross domestic product by 45% since 1973 [21]. Other data correlate with this trend. U.S. shipments of photovoltaic cells and modules have increased at an annual rate of 124.9% from 1993 through 2002 [22]. Similar trends are beginning to emerge in the automotive market as well. For example, the number of alternative-fueled vehicles in use in the U.S. has doubled between 1992 and 2002 to 518,919 [23]. Likewise, hybrid vehicle sales in the U.S. are forecasted to reach 350,000 units in 2008, more than an eight-fold increase over the estimated 2003 sales level of 40,000 units [24]. The preceding summary highlights driving forces shaping demand for switchable glazings. The next section of the paper presents the findings of an exploratory study of United States architects on the subject of switchable glazings. EXPLORATORY SURVEY OF US ARCHITECTS Introduction and Methodology The range of applications for switchable glazings is extensive. However, it is likely the greatest levels of demand will be in two areas: 1.) switchable architectural products like windows, doors, skylights and interior partitions, and 2.) switchable automotive products like sunroofs, sunvisors, mirrors and side- and rear-view windows. In the architectural market, professional architects play a central role in the design of a substantial portion of residential and commercial projects. Aggregate revenues of U.S. architectural firms are estimated to have exceeded $19.9 billion in 2001, an all-time high [25]. Despite architects' extensive scope of involvement and the positive expectations of switchable glazings for architectural applications, no market research studies have been published to date about the attitudes of architects regarding switchable glazings. Such a condition provides an opportunity for a first-of-itskind exploratory research study of US architects on the subject of switchable glazings. Exploratory research is especially useful when little or no data regarding the attitudes and behaviors of the study population exist. Practically, the flexible nature of exploratory research helps the researcher avoid preconceptions and allows for the capturing of unexpected but valuable insights that typically yield a depth of understanding not achievable through a traditional quantitative study [26, 27]. This particular study provides the foundation for more extensive | quantitative research of architects on the topic of switchable glazings in the future. The exploratory research methodology used in this marketing research study involved in-depth telephone interviewing of randomly chosen US architects drawn from a master contact list of architectural firms. The indepth interviewing approach is used because it can accommodate the wide range of geographic locations of those interviewed and also offers some degree of interviewer control [28]. Discussions with 16 architects included closed-ended and open-ended questions, with the former providing directional insights into attitudes and behavior and the latter offering exploration into areas deemed important by the architect or the researcher. Interviews lasted up to 15 minutes or more in length, and all data collection was conducted during January and early February 2004. Study participants are represented from all regions of the country. Median firm size is 16.5 employees, with a range within the sample of 3 to 350 employees. Median annual revenue for these firms is $1.9 million, with ranges from $1.0 million to $46.2 million. The strong majority of firms in the sample serve only U.S. clients, while a limited number have both a domestic and international client base. The majority of architects provide services for both residential and commercial projects. Usage of Glass in General In general, the U.S. architects interviewed currently are using the same or more glass in their projects when compared to five years ago. However, architects whose primary business focus is residential projects are more likely to be using more glass in their projects now than those whose primary focus is commercial projects. According to those interviewed, growing demand for glass in residential projects is influenced by several factors, including: 1.) consumer desire for larger volumes of glass in homes, and 2.) improvements in glazing materials that are allowing for the introduction of more glass into projects. Several residential architects noted the growing influence of building code requirements mandating impact-resistant glazings. These codes are described as especially prominent in areas along the eastern coast of the U.S. Architects whose projects are influenced by such codes express an interest in glazing products that dually address code mandates while also meeting consumer preferences for daylighting. One-third of architects whose focus is commercial projects claim they are using mo re glass now than five years ago. Many within this group cite heat gain concerns, material costs, load-bearing considerations, and the growing |