DALLAS—New research by Parks Associates reveals that 42 percent of new security installations include a smart home device such as a door lock, light or thermostat.
“We’ve seen this number grow from 24 percent in 2014 and estimate it to grow beyond 50 percent by 2018,” Dina Abdelrazik, research analyst, Parks Associates, told Security Systems News in an email interview. Parks also found that between 50 and 60 percent of smart safety and security devices are acquired as part of a householder’s security system.
According to the firm’s research, roughly one-third of homes with a professionally monitored security system in Q4 2016 had home control or smart home features integrated into the system.
“Since the security industry remains the leading channel for smart home services, security dealers are in a unique position to leverage that strength and to grow the category,” said Abdelrazik. “We expect this number to grow—increased penetration will come from driving growth with peace of mind experiences and compelling value propositions that justify the cost of these additional services.”
The study, Competition in Residential Security, also shows that interactive services, or the ability to remotely monitor and control the security panel and sensors, are now included in more than 70 percent of new security system installs. At the end of 2016, nearly 60 percent of U.S. broadband households with professional monitoring reported having interactive services.
“Vendors who have embraced the transition to interactive services and home controls are experiencing success,” Abdelrazik said. “Smaller, local dealers are not embracing interactive services and home controls due mainly to support concerns, and they are losing share as a result. Among smaller, local dealers, only 53 percent of new installs have interactive services, and 18 percent of new security system installations include a home control device.”
The residential security market, she continued, due in part to its position as the leading channel for smart home solutions, has attracted numerous new entrants, beginning with Comcast in 2010, followed by Time Warner Cable and AT&T. “The importance of interactive services is apparent, as dealers recognize and acknowledge the positive impact on attrition rates, the ability to drive higher RMR, and the ability to attract new customers to the security market,” she said.
In terms of the overall penetration rate for security in the home, Parks Associates estimates the presence of a working security system at 23 to 25 percent of U.S. broadband households and the presence of professionally monitored security at 21- to 22 percent, with professional monitoring yielding nearly $11.7 billion in annual revenue in 2016.
In addition, Parks found that referrals were an important factor for 66 percent of potential security system consumers who would prefer a local company.
Parks’ Competition in Residential Security study analyzes the changing landscape of the professionally monitored arena and assesses key industry trends, providing a working knowledge of today’s U.S. residential security system market, its players, and the market dynamics affecting the industry.Topic: Residential Tags: Parks Associates, Dina Abdelrazik