This article originally appeared in the April 2023 issue of Security Business magazine. When sharing, don’t forget to mention Security Business magazine on LinkedIn and @SecBusinessMag on Twitter.
New competition from internet service providers, tech giants and smart home device manufacturers is growing, with innovation and increasing choices for security solutions helping to advance the market. About one-third of U.S. households have a security system, and the vast majority have interactive services that include connected devices attached to that system, according to the latest research from Parks Associates.
Some consumer segments are shifting demand to less expensive DIY alternatives that forgo some added safety yet still feature a baseline of alerts and other security features. DIY benefits can include lower costs of purchase, installation, and ease of purchasing.
Still, many consumers are realizing that their households can only be fully protected with a professional monitoring service that works in an integrated, complementary manner with DIY hardware.
Additional support offerings for these devices will be important, particularly as consumers add more and more devices to their network. These add-on services will entice customers to see new value in monitoring contracts, add stickiness and satisfaction through a bundle, and strengthen brand loyalty.
Privacy is Critical for Smart Home Users
Most consumers are concerned about data security. Parks Associates research finds that 49% of those with connected devices have experienced at least one data security or privacy problem, with almost 75% of households displaying concern or high concern about the presence of spyware/viruses on their smart devices.
According to Parks Associates’ consumer data, the average number of connected devices in the home is 16, and smart home device owners own an average of eight smart home devices. The growing adoption of these devices is increasing the level of concern and the number of problems experienced.
Those with more smart home devices are more likely to be concerned about data privacy than others. The growth of the connected device landscape brings with it new threats and vulnerabilities that emphasize the need for comprehensive security and device protection.
Privacy and security concerns and perceptions heavily influence connected device adoption. In many instances, concerns over data and privacy can serve as barriers to consumer purchase of devices.
Parks Associates’ data demonstrates that 25% of the market is hesitant to adopt technology because of data privacy concerns. Cybersecurity and other holistic privacy protection features could motivate the “on-the-fence” customer to commit to a device purchase and monitoring subscription.
48% of “non-adopters” express concern regarding the security of their data, while 62% of consumers feel it is impossible to keep their data completely private.
Connected Device Owners' Concerns Grow
The concerns over data invasion and security are not felt solely by prospective purchasers but carry over to current device users as well, impacting not only how they use their smart home devices, but also their propensity to purchase additional smart home devices.
Parks Associates research reports that 72% of consumers are concerned/very concerned about the security of personal data collected and transmitted by devices as well as concerned/very concerned about someone gaining access or control of smart devices without permission.
Among smart home device users, 55% of consumers are worried about hackers while 39% fear technology companies having unauthorized access. This continues to be a strong barrier to adoption and one that industry players must address, as fear of privacy violations from legitimate entities has been persistent among consumers. Only 37% of consumers trust the companies that have access to their data.
Building Trust in the Smart Home
The continued uncertainty surrounding the safety and privacy of connected devices and their associated data has led to increased interest in add-on security services for smart/connected devices.
These add-on services are applicable in both residential and commercial settings that make use of smart devices. Residential customers see the value of increased protection and privacy in their homes, while commercial customers (whether businesses and/ or property managers) can augment the security of the devices in their businesses as well as the overall commercial space.
Industry data suggests security providers are not currently leveraging this interest in add-on cybersecurity services; in fact, Parks Associates security dealer research shows that only 21% of security companies that offer pro monitoring say they are likely to add cybersecurity services within the next year.
