In a move that should come as little surprise to close observers of the alarm industry, online retail giant Amazon last week rolled out five new residential security packages designed to provide consumers with varying layers of smart home and security technology depending on their budget.
The offerings range in price from $240 for the "Outdoor Base" package that provides indoor and outdoor lighting all the up to the “Smartest” package for $840, which is billed as a “whole-home security package” that includes a video doorbell, entryway sensors, siren, camera and a number of other smart sensors.
Each package purchased also includes two visits to the consumer’s home by an Amazon employee – one visit to assess the customer’s needs and set up an installation time, and a second to install and configure the equipment purchased. There are no monthly service contracts, as consumers will be responsible for monitoring their systems themselves because Amazon is not offering central station monitoring for any of the available packages at this point.
Amazon has been heavily focused on the residential security market as of late. Last October, the company made its official foray into the industry with the launch of its “Amazon Cloud Cam” and “Amazon Key” offerings. Amazon Key enables the company’s "Prime" customers to have packages dropped off inside their homes by granting remote access to delivery drivers. Cloud Cam is an intelligent indoor security camera that features 1080p resolution, night vision, two-way audio, a wide viewing angle, and activity clips from the last 24 hours via the Amazon Cloud Cam App. Those customers that want to use the Keys service must purchase the Amazon Key In-Home Kit, which includes the Cloud Cam and one of several compatible smart locks made by Yale and Kwikset.
This year alone, Amazon has also acquired wireless security camera startup Blink and video doorbell maker Ring to further expand its footprint in the space.
Impact on Dealers
According to Blake Kozak, Principal Analyst for Smart Home and Security Technology at IHS Markit, Amazon’s security packages in their current form are more likely to have a bigger impact on traditional brick-and-mortar retailers than they will professional security installers.
“These security packages being offered by Amazon are likely a trial to determine customer interest in buying bundles/packages rather than ad hoc,” Kozak explains. “For example, although consumer education is growing in terms of the smart home, the learning curve is still intimidating for those that do not have the time or desire to spend hours researching the various technologies and brands. By offering security packages in addition to in-home consultations/installation, Amazon is likely looking to target the non-tech savvy consumer.”
In much the same way that security dealers need to find ways to target the roughly 80 percent of U.S. households that do not currently have an alarm system, Kozak says that Amazon too is searching for an untapped customer base for the smart home. The company has been competing with Google in the smart speaker segment of the market, while at the same time battling the likes of Best Buy, Target, Walmart, etc., when it comes to in-home delivery and consultations related to smart home tech. According to Kozak, the launch of these security packages is a move against the latter.
While on the surface some of the security packages may seem pricey, Kozak says they are in line with buying the devices independently, which makes it even more of a value when you consider that they also come with consultation and installation services. “Especially when compared with Samsung SmartThings, ADT Home Security Starter Kit or Nest Secure, the price seems reasonable, with the caveats being, no keypad, no fobs and no professional monitoring for the Amazon security packages,” he says.
Angela White, ESA President and Partner at Central 1 Security, is also skeptical about the potential impact that these latest Amazon offerings could have on security dealers and questions if consumers are ready to entrust their privacy to the retailer. “Security is about relationships and trust,” she says. “I believe our industry involves more than the nuts and bolts of ordering parts and someone showing up to install them. The big question is going to be, ‘Are consumers ready to trust Amazon to provide security solutions?’ We already hear stories of consumers fearing the collection of data from disrupting titans like Facebook. They already see the lights swirl on their Echo and question, ‘Is Alexa listening?’ Are these new services something people are going to be able to digest?”
Potential for Market Disruption
Despite its recent acquisitions of Blink and Ring, Kozak says none of the Amazon-owned technology appears to be a part of the new security packages; however, he adds that Ring and the acquisition of Mr. Beams seems to be more advertised. “With Ring and its acquisition of Zonoff and the lower power capabilities of Blink technology, it is likely Amazon will come out with a keypad or panel (similar to 2GIG) – assuming they intend to move into professional security, although Ring has a keypad similar to Nest Secure,” Kozak says.
Though he emphasizes that retailers have much more to fear from these offerings than the professional security market, Kozak says that could all change if Amazon were to make a few key changes. “If Amazon were to offer Ring’s keypad (instead of Wink), professional monitoring for $20 a month or less, installation and consultation, and find a way to utilize their network of delivery drivers for in-home troubleshooting (truck rolls) – then the professional security market should prepare for major disruption,” Kozak explains.
Even still, White says that the entrance of Amazon and other companies can still have a positive effect on the market. “I, for one, love new entrants in the security space, as they raise consumer awareness and our company benefits from their marketing,” White says. “I’m very confident in the services we offer and the trust we are able to garner from our clients. My clients trust us for our service and have peace of mind for what we do with their data.”
About the Author:
Joel Griffin is the Editor-in-Chief of SecurityInfoWatch.com and a veteran security journalist. You can reach him at [email protected].
