Market Disruption a Boon for the Agile, Potential Demise for Dawdlers

Panelists at the 2016 CAA Executive Symposium stressed the importance of evolving one’s business to keep up with new technology.

SAN FRANCISCO – For the 2016 CAA Executive Symposium, long a highpoint of the California Alarm Association‘s winter conference here, moderator George De Marco led a three-member panel through a no-holds-barred discussion about trends, challenges and opportunities that are ushering in major disruption to the traditional security landscape.

The 14th annual panel session, held Dec. 9, included Michael Chiavacci, global marketing leader for UTC’s global security products division; Morgan Hertel, vice president of technology and innovation at Rapid Response Monitoring; and Rebecca Scribner, head of pro channel development at Nest. Panelists engaged in a discourse that juxtaposed the foretelling of vast opportunity brought about by technological advances and consumer demand, with bleak expectations for those organizations that elect to operate passively instead of evolving their businesses to stay sharply attune to a marketplace in flux.

SIGHTS & INSIGHTS: CAA Winter Conference Hones in on Market Disruption

Hertel invoked the widely accepted market penetration number of roughly 20% of homes with professionally installed and monitored security systems to help illustrate why the industry is on the cusp of exploding with new growth.

“As we look at the industry we have been doing a really good job of creating customers back and forth, but what we haven’t done is a very good job of creating new and innovative ways of creating new customers,” he said. 

Hertel went on to describe a conversation with an industry peer in which they discussed why “the nexus of technology and societal readiness” is upon us. Not simply fueled by gadget happy Millennials, but a vast swath of society is ready to take on a new and different kind of security platform, which will be much more part of consumers’ lifestyles than ever imagined. In three to four years the notion of a keypad will be silly, Hertel said. The idea of door and window contacts will be gone. New platforms will encompass not only physical protection of your home or business, but your credit accounts, your social networking accounts and other lifestyle facets. All of it integrated and its parts talking to one another.

“If you are not ready to jump down that road today it won’t be long before it won’t matter because that nexus is here and it is going to run right over the top of you,” he said. “That is the negative side. The good side is there is a hell of a lot of money to be earned. There are more opportunities today than we have ever seen in this industry. There are more new entrants. There is more technology. There is more innovation in this world than there has ever been before.”

“You need to be a thought leader. You need to make sure that you are communicating with that customer all of the time so that they go to you when technology changes.”George De Marco

Despite the industry’s inability to move the penetration needle much over the years, Scribner said the security space as a whole is growing significantly with connected devices and systems such as Dropcam, Canary and many others. She too is of the mind that now is the time for security dealers to position themselves to strike while the iron is hot. In fact, white hot.

“When these products started to come to market what we saw was that the early adopters tended to be very tech savvy and comfortable with installation,” Scribner said. “But as we shift from early adopters to early mass adoption, one of the critical tipping points we think is there are lots of consumers out there that consider DIY a dirty word and who need professional installation help.”

Manufacturers are increasingly gunning to become intimately familiar with consumer expectations and needs in order to understand what problems they can solve for the customer. When asked what the biggest growth prospect is his company is pursuing and in what market segments, Chiavacci pointed to Interlogix, a UTC brand, and the residential opportunity.

“We are putting together ecosystems that we try to make as broad as possible. What are we trying to do? We are trying to solve a visceral problem that the customer has. It’s finding that problem in the smart home space that the customer absolutely will part dollars for in order to satisfy a problem,” he said.

De Marco drilled home the utter necessity for dealers to also be deeply aware of their customers’ technology and lifestyle inclinations, and to be at ease with continuously informing them that you are well-suited to fulfill their security and home controls needs.

“You need to be a thought leader. You need to make sure that you are communicating with that customer all of the time so that they go to you when technology changes,” De Marco said. “Because you are ahead of it. You’ve already informed them. They are not going to go elsewhere.”

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About the Author


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 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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