Challenges and demands on the Home Front

Oct. 27, 2008
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Dear Readers:

The residential security market still holds great promise according to the many dealers and industry people each of us talked to this month in putting together a comprehensive issue on home security. Market penetration of households with security systems is somewhere close to 25%. Dealers servicing this market still have 75% of households as potential customers. These dealers look at those numbers and feel there is a great deal of business out there.

Though high end residential homes continue to dominate as far as the market for complete home management systems—including home automation, theater and entertainment systems, etc.—home builders in almost all new mid size range homes are seeing the value of including home technologies in the sale. According to the Consumer Electronics Association’s 2006 “State of the Builder” Survey, some 86% of U.S. builders say that home technologies are significant in marketing new homes. This is up from 79% in 2005 and 66% in 2004.

Today’s residential customers are well educated and demanding the best technology has to offer. Many end users are surrounded by security outside their home, at work and in public. Now they are seeking the same protection for their families. The technology that is out there is making this request a reality for the homeowner.

In the same breath, it is not all easy street for dealers. The residential customer wants to keep the cost of the system down and at the same time wants the most reliable system they can get. Sometimes the level of protection they seek and how much they are willing to pay for it are not in synch. There are also situations where they want technology that is not necessary and it is the dealer’s job to talk them out of it.

Another issue affecting this market is the fallout from false alarms and the non response policies sprouting up in certain communities. The perception of the value of an alarm system is under the microscope. Certain communication problems in alarm reporting (VoIP and AMPS Sunset) that have come about recently are also causing concern as the high technolgoy that has helped foster the security monitoring industry is now becoming somewhat of a thorn in its side.

Yet, just as the residential market is resilient so are its players. Concerned security dealers, manufacturers, distributors, the media and association members constantly ban together in this indusrty to solve its setbacks—and we are on it.

Susan Brady