Over the last year, the COVID-19 pandemic has forced people to spend more time indoors and, as a result, consumers are now reinvesting in their homes like never before. This has, of course, been a boon to many smart home and residential security firms that supply both products and services to the market.
This was one of key takeaways from the virtual CONNECTIONS Summit hosted this week by market research firm Parks Associates, which took place in conjunction with CES 2021. The event featured a multitude of panel discussions covering a variety of topics related to the adoption of smart home technology.
One of the first panels to take place during the event focused on smart home platforms and how consumers are leveraging them to integrate the multitude of connected devices that now comprise many U.S. residences. According to Jennifer Kent, Vice President of Research at Parks Associates, who also served as the panel’s moderator, a recent report from the firm found that U.S. households with broadband internet have, on average, 12 connected devices in their homes. Additionally, nearly one in five broadband households have a home control system and 28% have a security system that is professionally monitored with smart home control capabilities.
Despite a brief slowdown in business in March and April last year when the pandemic first took hold in the U.S., Anne Ferguson, Vice President of Marketing at Alarm.com, said that demand for security and smart home services has been as healthy as the company has ever seen.
“The security of someone coming to your door is an entirely new experience now than it was a year ago and consumers are increasingly showing us, through their purchases and behavior, that they are looking for ways to better protect themselves and their family members, both when they are away from home – which is not that often these days – but increasingly one of the shifts we’ve seen is to greater utilization of features we’ve developed over time for really helping to make life easier for everyone in the home,” Ferguson said. “Whether it is something like ‘Scenes’ or unexpected activity alerts… it has been very gratifying for us to see consumer really start to gravitate towards using more of these holistic smart home experiences while they are in their homes.”
Ferguson said that they have also surprisingly seen strong growth in the small and medium-sized business (SMB) and commercial space, which she says is likely driven by the disruption brought about by the pandemic and the need many people have now to stay connected with their businesses.
“It has caused the need for constant connection to your business when you are not there,” Ferguson added. “You might have new employees, new hours and the ability to easily change accesses becomes more prevalent than ever before.”
Raya Sevilla, SVP of Information Technology at ADT, said that they have seen similar patterns to those mentioned by Ferguson when it comes to increased usage of devices in the home as well as an uptick in adoption of outdoor cameras.
“Also, it is not necessarily surprising, but the number of outdoor cameras purchased is also fascinating, not just with the COVID times but also the socio-political times that we’re in right now,” Sevilla said. “The increasing number of outdoor cameras that have been asked for are related not just to peace of mind, but also for convenience. Is my Amazon guy here? Is my UPS guy here?”
Of course, one of the biggest drivers for the adoption of smart home platforms is to tie together all of the disparate connected devices that exist within a home or business, which has grown more daunting as people continue to add these products to their networks.
Sce Pike, CEO and Founder of IOTAS, a provider of smart home software for apartments, said that above all, these systems have to work together to provide value to the consumer.
“The number one rule is ease of use. It just works” said Pike. “One of the things we saw was that the biggest barrier is the initial setup, installation, pairing, provisioning and then uninstalling everything, packing it up and then moving with it. We really wanted to focus on what the right user experience was and really wanted to have it just work out of the box.”
Sumati Stewart, SVP of Sales and Marketing at Yonomi, which was recently acquired by Allegion, said that with so many people being “digitally native” today and who have grown up with technology, these consumers expect to have the same type of experiences with other devices that they have with their phones and that smart home providers need to be ready to accommodate those expectations.
“In order to drive adoption, we need to provide them with seamless, easy to use, and easy to manage experiences that both address pain points and bring joy into their life,” Stewart said. “The second piece is context, right. So, in order to really harness the power of smart home, I think context is key; knowing who you are, knowing where you are, knowing what you're doing now and what you're going to be doing next. Those are really important to be able to give the right personalized experiences to customers, but those have to be delivered proactively.”
The DIY Impact
While more consumers may be adopting security and smart home technology, a lot of that business is not necessarily going to security integrators. A separate panel discussion held during the event looked at the growth of home security relative to both the do-it-yourself (DIY) and professional installation channels and the number are trending in the wrong direction as of late for integrators.
In fact, as of last July, Parks Associates research found that 55% of recent security system buyers chose to install the system themselves, compared with just a third that opted for professional installation. However, many professional integrators are now hopping on the DIY bandwagon looking to make hay on the trend any way they can.
In fact, 40% of security dealers reported installing DIY systems in 2020, according to Parks Associates, which is up significantly from previous year. Additionally, nearly half of all security dealers see DIY as a new revenue opportunity that will attract different customers to the professionally installed systems they offer for businesses.
Brian Ewing, VP of Sales at Notion, a Comcast company, attributes the increase in popularity of DIY products to the fact that more people are now comfortable with these products that connect to their phones and the internet.
“Companies like the ones we have here today, and others have really put a lot of effort into security and making sure those systems are secure,” Ewing said. “Just to take it one step further, I think what we're finding is that people have very customized ways of thinking about security moving forward. That may be traditional theft or traditional fire, but we are seeing, on our side, people thinking about simple ways to monitor for, you know, maybe elderly parents that don't want a camera at home that makes them feel uncomfortable but maybe buy Notion sensors on medicine cabinets or on refrigerators to make sure that people are taking their medicine or eating. There are lots of different ways that people are identifying with security… but I think people are kind of coming up with their own definitions and really trying to bring their own thinking to that problem of security around the home.”
Matt Wolf, Head of Partnerships at SimpliSafe, said that his company has also seen a significant increase in demand and adoption for their technology from customers, which he believes will continue as people maintain this focus on improving their homes.
“People, of course, are spending more time at home and I think home will continue to evolve probably from a place where we used to just simply eat and sleep to one where our home is now, our office, school or gym and, in some cases, the primary source of entertainment,” Wolf said.
Interestingly, Wolf said that video verification of alarms has been one of their most popular features historically, but that with more people being home during the pandemic they have seen a drop in demand for it.
“We’re still seeing existing customers build out their systems, adding cameras and additional devices,” Wolf added. “There is definitely an interest as well on the outside of the home in protecting and having eyes outside those walls as well.”
Min Kang, Chief Product and Strategy Officer at Brinks Home Security, believes that buying smart home products piecemeal over the years has served as great catalyst for consumers that now want to have a whole home solution.
"As consumers life stages change, for example, moving into a new house, having children, or having young children or pets at home… they will be more open to considering a company’s solution,” Kang said. “So, I think this definitely gives us an opportunity to pioneer the new market and this is why interoperability or staying in the open ecosystem will become more and more important. And remember, the market is not homogeneous. There is still like 40% of the market that is looking for more holistic solutions when it comes to smart home and home security.”
Mark Owen Burson, VP of Marketing and Product Management at Nice North America, agrees that buying standalone devices is a great entry point for consumers in the smart home space but that eventually they will have to look for solutions that integrate these products in some meaningful way.
“To me, buying all these separate standalone devices that are good enough and, even if they work together, it's really like buying individual trees, instead of buying the whole forest,” he said. “So, the individual smart device could certainly be an initial step into that smart home or smart security, but I think it'll be much easier on consumers to buy a more complete system.”Joel Griffin is the Editor-in-Chief of SecurityInfoWatch.com and a veteran security journalist. You can reach him at [email protected].