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DIY Gambit: Should Pro Installers Consider a Self-Install Offering to Stave Off Competition?

A slew of DIY security and home automation competitors are flooding the marketplace, challenging traditional business models to keep pace.

To DIY or not to DIY? That is the question facing a good many installing security contractors who are rightfully assessing their current portfolios and gauging threats from an avalanche of new self-installed entrants, as well as potential opportunity.

Not yet having DIY deliberations at your organization? All indications — be they anecdotal or based on the latest market research and forecasting — suggest you most certainly should be.

Mass marketed, self-installed security systems have been around for about 15 years. LiveWatch first brought its DIY model to market in 2002. Protect America is also a pioneer in this arena, preceding others such as Frontpoint, SimpliSafe, Canary and Scout. Market penetration of these systems up to now has remained something akin to a pin prick, and the path to market littered with roadkill from would-be vendors that failed.

Today, the market-adoption needle is trending in a decidedly ascendant trajectory. Pundits and forecasters will debate to what degree, but ever-increasing ease of use and lifestyle enhancements from a bevy of interactive products and services just simply make this fact. For those who remain detached or skeptical that DIY systems are a threat to their subscriber base, just wrap your arms around this most recent influx:

That list doesn’t begin to scratch the surface. Google. Vivint. Best Buy. Lowe’s. Apple. Hello? For those in the professional channel who are unwilling to at least strategically consider adopting a self-installed offering, we may need to institute a new acronym — DIDY. Do it despite yourself. The ultimate goal would be to market a hybridized model that combines a professionally monitored DIY system with interactive services.

Market Research Illuminates Emerging DIY Trends

Listen, I understand some of the gravity involved in remaking a traditional business model that has served security dealers well for years on end, even decades. As Mark Matlock, senior vice president at United Central Control (UCC) writes in SSI’s November issue for the “Monitoring Matters” column, marketing a DIY offering the right way will entail a significant time commitment, not to mention a lot of money to truly succeed.

One chief reason for the meteoric rise in DIY competition, of course, is market penetration — read: the historical lack thereof. According to the latest Parks Associates research, 75% of U.S. households have no security alarm system. Among security system owners, 19% contract for professional monitoring.

For much more related data, don’t miss SSI’s November issue, which includes our annual Residential Market Report, penned by Tricia Parks, president and CEO of Parks Associates. The article is chockablock with current trends derived from the research firm’s most recent studies.

Tom Kerber, director of IoT strategy at Parks Associates, recently detailed some of these findings at The Monitoring Association’s annual meeting in Scottsdale, Ariz. He emphasized that most growth in the residential security market is deriving from interactive services. The traditional security package is a diminishing commodity, he explained. Thus, any base package must include interactive services.

Although security remains the leading channel for smart home product purchases, he said, DIY installation reduces customer acquisition costs. As such, the flood of DIY entrants can pass that savings along to consumers in terms of lower fees.

Here’s another thought-provoking, if not disconcerting, fact: Parks Associates queried security system owners on a series of use cases and found that only half of respondents reported their systems worked “very well” when arming/disarming the system from a keypad.

“That is pretty damning for the industry. That is really the opportunity why interactive services might be providing growth opportunity but it is also an opportunity for those who control that value chain and want to improve the user experience,” Kerber said. “They are really investigating every aspect of the user experience and because they control their own value chain they are able to address those in a very thoughtful way.”

This week we saw further indication of the rise in DIY with IHS Markit reporting the Americas is the leading market for self-installed security alarms. In 2016, the global market for DIY security equipment reached $60 million, of which 85% was sold in the Americas.

Professional monitoring contract options for DIY systems often come at a lower price than contracts for professionally installed systems, writes Anna Sliwon, an IHS Markit research analyst. To compete with the growing popularity of DIY systems, Sliwon suggests installing security contractors should look to work more closely with remote monitoring companies to provide flexible monitoring contracts and solutions to their customers.

The ultimate disruption and impact to the channel is speculative at best. Granted. But the opportunity for progressive-minded security professionals to seize a slice of the DIY pie, giving existing and prospective clients a full range of options, would appear enticing. If not prudent.

About the Author

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Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.

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One response to “DIY Gambit: Should Pro Installers Consider a Self-Install Offering to Stave Off Competition?”

  1. John says:

    It does appear increased consumer migration to DIY for alarm systems is inevitable; even though self-monitoring is certainly inferior to professional monitoring for the many reasons often discussed. My personal opinion is that the inclusion of video in the alarm system lineup of equipment changes the dynamics of, and receptiveness to, third-party monitoring– with a little talked about consumer concern regarding privacy. More should be talked about on how to reconcile alarm system video and consumer privacy concerns, particularly in the residential sector. Hardly a word is ever written about it, while it may very well be the elephant in the room insofar as it relates to future residential alarm-system sales and third-party monitoring. How many people want strangers capable of looking into their homes?

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