Security System Purchasing Trends: Examining ADT’s Recent Partnerships & the Retail Channel
ADT’s recent moves suggest a continued focus on professional installation as COVID-19 restrictions begin to lift, however, 45% of consumers report purchasing their security system through the retail channel.
Editor’s Note: SSI has partnered with Parks Associates for the creation of DIY FYI, a column designed to help dealers keep track of important smart home market developments, what the competition is and whether they want to jump into something they see as a new opportunity.
Security stalwart ADT and satellite TV service provider Dish recently announced a partnership to expand access to ADT’s smart home security products through Dish’s nationwide network of smart home professionals.
OnTech Smart Services is a subsidiary of Dish launched in 2019 as a competitor to Geek Squad that will also serve as an installation provider for ADT security products and services. The partnership will allow Dish to market, sell and install ADT smart home security products and services, expected to begin in Q2 2021.
Pricing has not been announced, but it is likely Dish customers and OnTech+ members will have access to special promotions and pricing. Currently, OnTech+ memberships include unlimited tech support and members-only pricing for smart home products.
For ADT, the partnership with Dish and OnTech will help extend its reach in rural and exurban areas, further expanding its subscriber base. COVID-19 has increased time spent at home, and Dish Network is looking to add value to its customers through ADT’s home security products.
Parks research consistently finds that peace of mind about one’s home and family ranks in the top three smart home benefits that most influence purchasing, highlighting consumer’s interest in securing and protecting their home.
Parks Associates research shows that among all security owners who acquired a system within the past six years, the trend for self-installation emerges, but it is not as startling as when viewing installation methods for recent buyers.
Given the margin of error, the ratio of self-installation versus professional installation is steady for 2019 and 2020, with 50% of security system owners professionally installing their home security systems in Q2 2020.
As households seek to avoid the risk of infection, COVID-19 has hastened the transition to self-installation with Parks Associates research in Q2 2020 finding that 30% of consumers are hesitant to have an installer in their home. At the same time, 39% of security system “intenders” report that they will choose professional installation when they do acquire a security system.
ADT’s recent partnership with Dish follows Google’s $450 million investment in ADT in August 2020. Earlier in February, Atlanta-based Ackerman Security Systems joined the ADT Authorized Dealer Program to sell and install ADT smart home security services to its customers.
These moves suggest a continued focus on professional installation for ADT as COVID-19 restrictions begin to lift and consumers become comfortable with allowing strangers into their homes again.
Home security systems acquired from the home security company via a home consultation remain the top channel, though it is down slightly from 2019. Of the 33% of home security system owners, 26% report purchasing their system from a home security company that was scheduled to come to their house, and 14% report purchasing a system from a home security company over the phone.
While traditional home security companies still hold the largest channel share, the retail channel is making gains; 45% of consumers report purchasing their security system through the retail channel. A number of recent market entrants are on paths to expand the residential security market through the retail channel.
Some notable examples include Ring Alarm and SimpliSafe, which offer popular DIY home security systems, from online retailer Amazon. Ring’s DIY smart security system Ring Alarm is one of the most affordable options in the market with a base price of $199.
SimpliSafe sells a DIY system that it claims is one of the easiest to set up and use in the market, offering versatility through a variety of package and equipment and pricing options. The experience with COVID-19 may affect methods of sales and system acquisition, paving the way for more DIY behavior.
The security industry remains one of the leading channels for smart home systems and services, putting security dealers in a unique position to benefit from the demand for connected living.
Building on the conversion from legacy to interactive services, security system providers additionally offer smart home controls in their package tiers and individual devices that can be layered on top of those systems. The integration of smart home products including lights, locks and thermostats provides a significant opportunity for RMR growth.
Amanda Kung is research analyst at Parks Associates. For more information about Parks Associates research, visit www.parksassociates.com.
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