It seems like the residential security industry in in a constant state of change. We took a look into the crystal ball to identify nine trends in this market and how they can affect your business in the months and years to come.
1. The Growing Value of Data: The digital age has turned everything into data. Beyond facts and numbers, digital code contains images, events, choices, trends and more information that can be acted on, monetized and more. The Internet of Things connects all the electronic items that can measure, collect and forward this data for analysis. The ability to analyze and manipulate unstructured data has produced technologies such as voice recognition, face and event recognition, remote control and action, and AI to name just a few.
These capabilities have spawned new services in access control, maintenance, energy management, security and more to come that we simply have not yet thought of. Security companies can profit from this data by adopting and providing these new services to enhance scope; however, giant tech firms like Google and Amazon can do so as well. While Google or Amazon may use this data primarily to help sell through advertising, or by personalization of offers to the consumer, it is important to understand that they consider this data so valuable that they subsidize other services as a path to get more of it – security being one of them.
Consumers are becoming aware of this; in fact, many are “creeped out” by online tracking, while others are worried about identity theft or the misuse of private information. This creates challenges surrounding both cybersecurity and privacy. These are the issues of our day, and service and equipment providers must understand their place in securing systems as well as protecting customer privacy.
While this can be viewed as a threat, there is good reason to believe that emphasizing and selling these services creates a profitable and differentiated path.
Consider the overall value of the data your services generate, and then think about how you can use this to extend services and build revenue. Decide whether partnering with or competing against the large data wranglers is the way to go. Figure out what your customer wants, and you too can get a slice of the value.
2. DIY: Is do-it-yourself a friend or foe to the security pro? The answer is both. On the positive side, the growing DIY security market has increased awareness of the security and home control product categories available. As more consumers become interested in these technologies, many will shop around for solutions – including in the professional market.
DIY will also impact professional business models – for example, the market is already seeing an increase in non-contract monitoring. Another possible business model change is to distribution channels – with consumers buying products online or from a retailer but preferring a professional to do the installation. This is called the DIFM (Do-It-For-Me) option (Read more on how residential integrators can capitalize on this trend here).
The biggest potential negative to pros is that pure DIY solutions may become “good enough” to completely cannibalize the professional security market in the same way digital photography did to Kodak and film-based cameras.
3. Evolving Sensors: There are many types of new multi-sensors available today – with more coming on the horizon – that give residential integrators new ways to understand their customers’ environment and to provide better data collection, giving customers more choices about how to use that data.
These new sensors – from water sensors that do not need a plumber to install, to occupancy sensors that track people without motion sensors or cameras (they use RF waves) – will open new opportunities for the integrator, including aging-in-place (more on that later), insurance cost reduction and increased RMR options. Additionally, increased battery life is reducing truck rolls, and radios are getting better, which further reduces customer support issues.
4. Voice Control: When it comes to integrating products into homes, it is easy (and normal) for a business to stick to a model that has worked in the past; however, controlling security by voice is something that often seems counterintuitive to residential security professionals. That said, security controlled by voice fits an emerging lifestyle where seamless integration in phones, automobiles and homes is not a feature – it is becoming an expectation.
Whatever platform(s) you choose, you will need to offer voice, not just as an option, but as a key ingredient in your systems. Google Home, as an example, offers the opportunity to create custom commands and responses, so you can involve your customers in the process of creating a system customized to their needs and syntax. Other providers have partnered with Amazon Alexa to expand the control of the security ecosystem.
5. Video’s Explosion: As more security systems move to digital, interactive solutions, customers have garnered a better understanding of the value proposition of regular alerts and notifications from activity within and around their home. One of the biggest drivers of this increased popularity and resulting retention is video cameras, which have quickly become a key requirement in residential security systems.
Being able to see when the kids are coming home from school while at work, that a pet is safe and comfortable, or that activity on a front porch is a raccoon instead of an intruder, provides peace of mind that is obviously valuable to consumers. Technology and innovation in video also adds value for consumers, with features such as facial recognition, package detection, creating hot zones for the triggering of specific notifications or recording, and 24/7 streaming and recording. Practically all of these are baseline requirements for camera performance in today’s marketplace.
Beyond the sheer comfort and enjoyment that customers get from a more interactive solution, many municipalities are considering video verification as a requirement before police dispatch in the event of an alarm.
6. Partnering with the Insurance Industry: For years, homeowners have received a discount on their home insurance premium with verified home security systems. Today, insurance companies now want access to the data that the security system is collecting so they can make better risk mitigation decisions about a home and its contents, and they are willing to pay for that data – typically in the form of a discount or lowered deductible (the better and more consistent the data, the better the discount).
The opportunity for integrators is providing systems that best fit the bill for the insurance company to give that discount and charge for the connectivity between the customer and the insurance company. Through partnerships, the integrator has the ability to tap into that stream of revenue and reap the benefits of the increased collection of data and the reduction of risk for the insurance company.
7. Increased Vehicle/Home Connectivity: Today’s newest vehicles include an app that enables users to interact with the vehicle to lock/unlock, open the trunk and remote start. In the home, consumers can use a smartphone to interact with devices including lighting, HVAC and door locks. The next step will see these ecosystems working together. For example, based on the location of a vehicle (leaving or coming home), the home will automatically be put in home or away mode, with the alarm armed/disarmed, lights on/off, doors locked/unlocked, etc.
This blending of the home and vehicle ecosystems presents both challenges and opportunities to integrators. The challenge is that today, unlike 30 years ago, vehicle manufacturers are leading the way on these connected technologies, which has significantly impacted the aftermarket electronics market. The opportunity is that vehicle manufacturers will be unlikely to offer support to the home ecosystem. A residential integrator is perfectly situated to combine both ecosystems for a customer.
8. Biophilia: A growing trend is the idea of “Living Well” – which comes down to clean indoor air quality, circadian lighting and mental health – and the security integrator has many technology options to offer here. More efficient HVAC and control systems monitor and maintain fresh air in spaces, venting hydrocarbons when necessary and closing vents when the outside air is worse than the indoor air. Lighting controls adjust the color (or temperature) of the lights as well as the brightness during the day to relieve the occupants and produce better sleep patterns. All the while, these technologies are collecting data about the living spaces, the temperature, relative humidity, the amount of light coming in from windows, and the quality of the air.
9. Aging in Place: One of the fastest-growing opportunities in the security sector is the ability to monitor the elderly. With the rising costs of healthcare and the increase in innovative monitoring capabilities, technologies are enabling loved ones to live in their own homes longer. These technologies include mobile PERS options for personal emergency response; sensors that alert when someone has fallen out of a bed or wheelchair; motion sensors that alert when they do not sense motion after a certain amount of time; contact sensors that can alert when a medicine cabinet is opened; and more –and they are all fairly simple additions to enhance an existing security system.
Note that the customer in this circumstance is typically the caregiver, not the recipient of the products and services. This presents a challenge in marketing messaging and channel go-to-market strategy, as it may differ from your core methodology.
Avi Rosenthal is a managing partner for Bluesalve Partners LLC (https://bluesalve.com), a smart home and security consulting firm. Also contributing to this article were Bluesalve team members Duane Paulson, Robert Heiblim, Tom Reed, David Kaplan and Lew Brown.
