State of the Market: Exploring the Evolving Landscape of Security & Smart Home Market
Data from Parks Associates indicates the smart home market continues to experience steady growth. A recent report from the Dallas-based market research firm found 37 percent of internet households in the United States, about 40 million households, own at least one core smart home device, up from 9 percent in 2015.
Almost 50% of dealers say DIY attracts a different customer and new revenue opportunity. // SOURCE: PARKS ASSOCIATES
Currently 41 percent of U.S. internet households have a smart home device. The smart home market is beginning to reach a more mass-market consumer who is not necessarily an early adopter of technology. // SOURCE: PARKS ASSOCIATES
54% of dealers report support costs have jumped. // SOURCE: PARKS ASSOCIATES
Elizabeth Parks, president and chief marketing officer of Parks Associates, invokes marketing as a particular challenge for smaller independent security providers.
“The local security players are having trouble over national, and I think that is going to probably remain somewhat the same,” Parks explains. “Some of that reflects the buying patterns of consumers and the shift to the online purchase. If you Google ‘security’ you're going to probably get SimpliSafe or Ring. And then you’re going to get ADT or Brinks. So if you’re a smaller local player, you really have to do a lot of work in the digital marketplace to show up. And that’s hard; it costs money and marketing.”
With a flood of devices in the marketplace, dealers are also confronted with a vexing issue of trying to explain all the bells and whistles to their customers, Parks says. Therein lies the education conundrum — packaging a solution and selling it to the consumer in a way they can understand.
“That is what everybody is trying to figure out, ‘How do I do this?’ But it is worth pursuing because our data does show from dealers that with all the attached devices — and adding in video storage, monitoring and network cameras and these different things — that you can get a 25 percent increase in RMR a month because of the interactivity that’s getting added,” Parks says. “And so in some ways, we’re seeing fewer subscribers of systems but more money. The focus has to be on the base of customers. How do you go to your customer base and upsell or somehow convince them to buy more to get more money? The challenge is going to be some of the legacy systems out there and how do you convert them?”
61% of dealers report remote diagnostics for inbound smart home support issues. // SOURCE: PARKS ASSOCIATES
From the article, "State of the Market: Exploring the Evolving Landscape of Security & Smart Home Market" by Rodney Bosch