In 2017, there were about 122 million smart home devices shipped globally, according to IHS Markit. The retail channel represented about 62 percent of all device shipments in 2017 and will represent about 70 percent in 2021. Despite the increased demand for professional installation, the “do-it-for-me” approach, most the volume remains with ad-hoc purchases. This includes a consumer video camera or a smart thermostat purchase from a retailer.
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× When a consumer wants to add devices to an existing professionally installed system, they often will buy products from retail. Flexible service offerings and pricing are already taking shape across smart home offerings. DIY installed smart home systems such as Scout Alarm already offer no contract monitoring. Professional monitoring companies are already offering no contract pricing, and providers such as Comcast are looking to pilot programs for just video monitoring, bundled with Internet for a low monthly fee.
Home automation system
Connected smart locks can actually act as an extension of a smart hub or controller
Options for financing are also going to become commonplace. Smart home equipment is expensive, even when attempting to outfit a modest size home (2,500 square feet). Immediate access to services is becoming more critical. This means consumers should be able to access on-demand service options directly from a mobile device to activate or deactivate professional monitoring. Lastly, pricing still needs to come down for many smart home devices, but there is a threshold.
For example, the sale of wireless, connected smart locks (viewed by some consumers as DIY) can lead to opportunities for further home automation product sales and professional installations. Connected smart locks can actually act as an extension of a smart hub or controller. They can be used to communicate wirelessly with and control all the devices that make up a home automation system, including lighting, entertainment, thermostats, air, alarms, shades and more.
Residential security
According to a 2018 Residential Security Market Report prepared by Parks Associates, “More than 60% of installing dealers now report that DIY systems are biting into demand for their services.” But the rise in DIY is not entirely bad news for security and home automation installers and dealers. There are a number of ways to view this glass as half-full.
For example, with their lower cost and perceived ease of installation, DIY products have broken down barriers for additional purchases. There are reasons for dealers and installers to be cheerful about the rise of DIY. For one thing, according to that same Residential Security Market Report from Parks Associates, residential security dealers are doing quite well. The report states, “In 2017, revenues were up an average 7.72% for security dealers.”
Full-time monitoring
DIY products have broken down barriers for additional purchase and installation of professionally installed systems
What about installations? The report goes on to say, “For 2017, the average number of installs per dealer was 22 per month, compared to 17 per month in 2016.” So, revenues are up for security dealers, and at least part of the reason can be attributed to the fact that DIY products can raise overall awareness of and spur interest in other home automation and security products.
With their lower cost and perceived ease of installation, DIY products have actually broken down barriers for the additional purchase, and installation, of complete, professionally installed systems. Instead of paying for monthly monitoring, homeowners can install a web cam, access from a smartphone or tablet and essentially do their own security monitoring. The downside of this approach is readily apparent. Without full-time monitoring, homeowners can easily miss the break-in or the aged parent who falls and can’t get up.
Near-field communication
Until they log on and take a look, there’s no central station to send medical aid or call the police. Connecting door locks and other devices to the Internet can also open a door to hackers, if the infrastructure isn’t properly protected. The areas of consumer electronics and security are closely intertwined. For example, Apple recently expanded near-field communication (NFC) support to include the NDEF (NFC Data Exchange Format), which will likely accelerate the adoption of smartphones for access control credentialing.
In another recent development, Amazon acquired Blink, a home security camera startup that offers wireless home security systems. The acquisition aligns with Amazon’s effort to offer more home devices. A common theme among professional monitoring providers is that a homeowner who is aware of events happening in the home does not necessarily have a secure and protected household.
Traditional security features
For example, a Nest camera, a DIY product, notifies a consumer via smartphone about events in the home when it detects motion, but only when the notification is opened and identified will a consumer be able to act on the related event.
Self-installable smart home devices may resonate with a segment of the market that want security but are unwilling to adopt professional monitoring; however, providers can leverage these devices to enhance traditional security features and communicate the value of professional monitoring.
Missed part one of our smart home mini series? Read it here.
