Security System Adoption on Rise in Uncertain Times, Says Parks

The COVID-19 pandemic, civil unrest, economic uncertainty and growing availability of do-it-yourself systems helped drive “slow but steady” adoption of home security systems, said Parks Associates analyst Ryan Hulla on a webcast last week. Parks’ most recent home security system data shows 35% of internet households had a security system in Q4, up from 33% two years earlier and 18% in Q4 2018.

DIY options had the most influence on rising adoption trends, Hulla said. Consumers are becoming more aware of app interfaces and their convenience when setting up home security devices. Volume manufacturing efficiencies should help lower the price of entry to DIY security systems, driving even more adoption, he said.

Over a quarter of survey respondents said they feel less safe than they did five years ago. New applications of security beyond protection for home intrusion are raising awareness for the category, Hulla said. The need for cybersecurity protection on productivity devices and vehicle security created strong demand for security beyond home invasion, he said. High overlap between smart home energy products and security devices boosted both sectors, said the analyst.

Parks predicts DIY security systems will continue to be “a good portion of the market” because they eliminate the cost of professional installation and have no, or low, fees for self- and professional monitoring, Hulla said. Prices for pro monitoring are increasing, and in a competitive market, some providers are tacking on additional features such as video storage and analytics, cybersecurity protection, personal emergency response service, water sensor safety, gas monitoring and vehicle monitoring with a security package.

Rising fees aren’t deterring customers from adopting pro monitoring, which is at an all-time high of 31% of security system customers, Hulla said. Despite overall satisfaction with their pro monitoring services, 41% of customers said they’re likely to switch providers, he said, due to the appeal of less expensive DIY options, he said. Cheaper options could draw consumers away from the traditional $40-$45 monthly monitoring models, Hulla said.

Security dealers that don’t adapt to consumers’ growing preference for DIY security systems may “struggle or be relegated to niche consumer segments,” Hulla said. Four in 10 dealers surveyed said they installed DIY systems in 2020, mostly with monitoring attached, up significantly from 2019, he said. A minority of security dealers view DIY as a threat to their traditional business, but over half see DIY as a new revenue opportunity that can attract a new customer segment, he said.

E-commerce is the dominant channel for DIY security system purchases, with about a third, Hulla said. Younger consumers buy security systems predominantly online, where they can research options easily, or at retail; older consumers tend to buy from a company representative, he said. To facilitate direct-to-consumer sales, security companies should provide clear pricing on their website, Hulla said: “Providers should be aware of the potential frustration consumers may experience by not providing transparent pricing or easy-to-navigate websites, ultimately impacting their potential customer base.”