DIY vendors such as Ring and SimpliSafe have made security systems more accessible to certain market segments, while pressuring professional companies to launch their own DIY solutions.
Uncertainty and anxiety related to the circumstances of the pandemic fueled consumer demand for products that offered peace of mind, and companies that positioned themselves to deliver security as consumers wanted – mostly from do-it-yourself and with associated services – experienced spectacular growth.
New entrants offer products and services at rock bottom prices, and all competitors are introducing innovative features and value-added services to differentiate themselves and increase ARPU.
DIY systems began their significant growth in 2015, providing customers with an easier way to acquire a security system. Additionally, systems like SimpliSafe offer multiple smart home devices and systems that are easy to use and install. The reluctance to invite professional installers into the home during the pandemic has further increased self-installation. Parks Associates research reveals that 42% of security system owners say their system was self-installed.
Ring Alarm and SimpliSafe are the leaders in DIY security systems. However, Ring and SimpliSafe’s share has fallen since 2019, while big players in the pro install space, like ADT, Brinks and Comcast have all launched DIY options.
DIY system purchases are much more likely to be triggered by security events. Additionally, the company reports that 49% of DIY system owners say they bought their home security system because of a burglary at their home or a loved one’s home, compared to just 27% of installed system owners. by professionals.
Do-it-yourself schemes can reach a new customer segment living in neighborhoods with higher crime rates. In particular, income levels are relatively equal between DIYers and pro-installers.
Professionally monitored security systems are more likely to have professional installation than self-installation. That said, the difference is narrowing.
Considering only security systems purchased in the previous 12 months, self-installation surpassed professional installation in 2019. Professional installation bottomed out in the second quarter of 2020 during the toughest economic shutdowns and social distancing measures, but has since rebounded.
The increase in the number of connected video cameras and other smart home devices will meet the long-term need for professional installations for many consumers. In fact, some security vendors that started out as DIY offerings, like Ring, now offer professional installation services.
DIY Disruption in Home Security
Overall, the home security market is highly fragmented with relatively few national players; regional dealers occupy the middle market and about 13,000 to 15,000 local independent dealers make up the balance of the market. Do-it-yourself security solutions have the potential to impact this part of the market in the longer term, as self-installed systems offer monitoring services at lower prices than professionally installed systems.
Low-cost monitoring fee alternatives make segments of this market vulnerable to erosion by self-installed systems. Likewise, self-installed systems have the potential to reduce acquisition costs by eliminating installation costs and replacing them with less expensive support services.
From the perspective of the security industry, smart products and do-it-yourself systems are woefully inadequate substitutes for a professionally installed and monitored security system. From the perspective of consumers, smart products and DIY systems make them feel safe and give them peace of mind, and for the price, the shortcomings of these products presented by the pro installation industry are lagging behind.
The research firm finds that 46% of self-installers say their home security was a primary buying driver for purchasing their security system. Only 14% of self-installed system owners say their system comes from a security vendor; the majority cite that their system is from an online or national/local retailer.
Consumer demand for safety and security has long been seen as a persistent driver regardless of market conditions. Security companies must continue to innovate and pivot messaging to emphasize DIY options and professional installation to provide consumers with the choice they seek in home security solutions.
While many believe that a professional technician installing a security system is essential to consumers’ perception of security, there is a new generation of solutions that are helping to expand the market. Regardless of the installation, 90% of security system owners want professional monitoring.
Further information on this topic can be found in Parks Associates’ quantified consumer report, “Security Buyers: Purchase Trends and Triggers,” which quantifies the security buyer’s journey, including drivers and barriers, influencers, buying channel preferences for product and service bundles, buying processes, and the importance of incentives, such as discounts, financing, or rebates from an insurer.
Jennifer Kent is Vice President of Research for Parks Associates. Join the company at the upcoming executive conference, CONNECTIONS: The Premier Connected Home Conference. This in-person event will take place at the Omni Hotel in Frisco, TX from May 17-19, 2022. The event will cover smart home devices, home systems, privacy and security, broadband and more. Moreover. Register for the event online at https://parksassociates.com/events/connections-us
SSI has partnered with Parks Associates to create DIY FYI, a column designed to help dealers keep up with important smart home market developments, the competition, and whether they want to get into something they consider as a new opportunity.