Next, a major inhibitor to the diffusion of security has been the perception by many householders of inadequate value for the price. Thus the joke, “We’re just putting up the sign.” Daily benefits from checking into the home with video, receiving alerts about the coming and going of family members and visitors, achieving cost savings with smart-energy usage, and other convenience and cool factors add to the value perception and may turn around the price/value equation.
With that in mind, most of the new and existing players believe that adding smarthome features can cause the market to grow by approximately 50%, or from 16%-18% monitored to 24%-27% professionally monitored. And then there will be a good set that forego professional monitoring, but want self-monitoring and remote control.
In a more long-term view, IP is the way of the world. Given today’s consumer comfort with smartphones and tablets, expanding into home management functions is simply logical. Add to that the necessary coming advances in remote health monitoring due to an aging population and the need for cost savings, and the market value doubles … or triples or explodes. Simply put, every device or system that has some benefit from connection will be connected.
Additionally, the trend for leveraging Big Data is developing in commercial and government markets; it’s imminent in consumer markets as well. Manufacturers are eager to understand their consumers more completely than they do now. With better knowledge of usage patterns and problems, manufacturers can build better products and increase their brand’s loyalty.
When these factors are considered as a whole, this evolution for the security provider marketplace is nothing less than the beginning of a revolution in the performance and features of products as diverse as lights and washing machines. Providers of all types perceive this — and want to be competitive within all the market transformation.
Improved Revenues on Tap in 2013 for Many Dealers
As of midyear, security dealers report a better business environment and improved revenues than compared to 2012 survey results. The bar graph on page 68 provides overall expectations for revenues in 2013 and a look back at 2012. An encouraging 66% of surveyed security dealers report higher revenues achieved in 2012 than in 2011, the beginning of some recovery from the devastating Great Recession of 2008-2011. Even better news is the optimism reflected in expectations for 2013: 77% expect their company’s annual revenues to be higher again than in 2012.
Revenue expectations are not the only signs of a recovery for security. In SSI’s and Parks Associates’ 2012 dealer survey, 70% of respondents selected “Consumer hesitancy to spend money” as the chief inhibitor to sales, with the inability to find qualified personnel and the weak housing market also being selected by about 30% of dealers.
This year, only 40% reported consumer hesitancy to spend money as a core inhibitor (see bar graph top of page 69). While still the big issue, it has lessened as a perceived inhibitor for many dealers during the past year. Inability to find qualified personnel and the weak housing market remain the same when factoring margin of error.
Increasing Sales for Remote Control, Device Monitoring
Not only are dealers more positive about the mood of consumers, they are also more often selling remote control and monitoring adjacencies to accompany their traditional security systems. All told, 86% of surveyed dealers report offering some remote monitoring and control equipment. Among this 86%, more are offering remote control and monitoring this year compared to 2012; in addition, many more report actually selling the services than in 2012.
In 2012, 60% of dealers reported that they sold this type of service and equipment in less than 10% of their sales; one year later, only 15% report selling remote control equipment and service in less than 10% of their sales. From another perspective, the percentage that report selling these extras in more than 70% of their sales doubled in one year from 5% to 10%.
The reasons for offering these services have also changed slightly. In 2012, 82% of dealers selected “My customers are requesting this type of equipment” as the top choice while “Making more money” came in second. In 2013, the top reason for offering these adjacencies is added monthly revenue. While the marketplace remains in an early stage, remote monitoring equipment and services are proving to be key factors, and more revenue and satisfied customers are the measures.
Unsurprisingly, given the offerings available today and the history of the security industry, top smarthome devices desired by dealers from an interactive service provider are cameras, door locks and home safety devices. What is notable is that all of these features fall in the security bucket rather than, for example, money savings or even convenience.
Parks Associates believes this will change, to a significant degree, over time as other benefits and features become more familiar to consumers. Not only will the desire for energy savings realized through good management increase, the offerings for this benefit will become increasingly capable and useful. These are early days.
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Research - Security STATS