This article originally appeared in the November 2022 issue of Security Business magazine. When sharing, don’t forget to mention Security Business magazine on LinkedIn and @SecBusinessMag on Twitter.
As we enter the fourth quarter of 2022, several trends are having an immediate effect on the residential security industry. Integrators serving this market are navigating inflation as much – if not more – than their own customers. In addition, new technology innovations are coming down the pike, along with an increased push into emerging markets.
Here’s a look at three of the top residential security trends as we head into the holiday season.
1. Inflation forces integrators to raise monitoring fees and diversify services.
The cost of living has increased in 2022, as inflation recently broke a 40-year high; and there are few indications that consumers can expect a significant decrease in the cost of goods and services in the near future. Meanwhile, security integrators must find ways to increase revenue to compensate for the higher prices of materials, overhead and wage inflation of employees.
Parks Associates research reveals that a good portion of these integrators are raising professional monitoring fees or including new opt-in services for consumers to compensate for the rising expenses.
The research firm reports that price hikes for security monitoring may impact adoption rates throughout the rest of 2022 or shift market share to less costly competitors. Security solutions have enjoyed high demand – even under the economic uncertainty of the pandemic – but it is unclear if growth will continue with higher pricing and tighter consumer wallets.
2. Security players make moves on the MDU market.
According to the National Apartment Association (NAA), demand for apartments is at an all-time high, driven by factors such as the increase in the number of young adults aged 18 to 24 who are delaying home ownership, as well as an aging population choosing to live in apartments.
Technology product and services providers are increasingly targeting the multi-family space, offering services targeted to both MDU residents and rental property owners. In June, ADT acquired IOTAS, a leading smart home automation platform for the multi-family space, for just this purpose.
From a new product perspective, Brivo’s new interoperable smart credentials enable property managers to issue a single keycard or fob that operates multiple locks, eliminating the need to replace existing lock hardware with compatible devices or using unencrypted, insecure proximity cards for access control.
Parks Associates research finds that 80% of property managers plan to introduce smart home devices in their units within the next 12 months, indicating high demand in the MDU space. This also reflects MDU operators’ and owners’ need to remain competitive in order to secure top rental candidates.
As security providers offering professional installation and monitoring services feel the pressure of competition from lower-cost DIY players, the MDU market is an attractive play.
3. New product introductions focus on video and deterrence.
Besides smart speakers, smart cameras and video doorbells are the best-adopted smart home device product categories. Security system owners adopt these products at dramatically higher rates than the average household, and they are the top devices that security owners add to their systems if they didn’t include them in their system at purchase.
New product announcements illustrate how manufacturers are fighting for an edge in this very competitive market. In Q2 2022, Bosch, Swann, Arlo, Vivint, and Alula each announced new cameras. Whether a video doorbell or free-standing camera, manufacturers are improving pixel quality, night vision, thermal vision, camera view, camera durability, battery life, and AI capabilities. These new features improve deterrence for intruders or porch pirates.
The Arlo Go 2 release is notable for its improved features – including 1080p, Wi-Fi and LTE support, longer battery life, GPS, a spotlight, and real-time 2-way communication – but also for lower pricing – $150 cheaper – than the previous model.
Jennifer Kent is VP of Research for Parks Associates. Parks Associates analyst Ryan Hulla also contributed to this article. Access a special virtual roundtable “Tech-Enabled Buildings: Driving Next-Gen Services,” in partnership with Alarm.com focusing on the current state of property tech, broadband requirements, system integration and more at www.parksassociates.com/webcasts/spaces2022-virtual-sessions.
