There is some disturbing news for any CE pros integrating security systems into their whole-house control solutions: Consumers prefer standalone security systems by an overwhelming margin.
According to a recent Parks Associates report 360 Deep Dive: Pricing Strategies for Residential Security,16 percent of U.S. broadband households plan to buy a security-related smart home product, such as video doorbells, cameras, or door locks, in the next 12 months.
Eight percent of U.S. broadband households plan to buy professionally monitored service, while the remaining intenders are planning to buy security systems with self-monitoring or ad-hoc monitoring.
“These smart products address the same core needs of consumers — to feel safe and secure in their home, having peace of mind that all is well and knowing they will be alerted of potential dangers,” says Dina Abdelrazik, senior analyst, Parks Associates.
“Only 28 percent of security intenders plan to subscribe to long-term professional monitoring, illustrating competition from alternative business models and standalone security products that have entered the market.”
61% of Customers Prefer Financing to Up Front Cost
The report evaluates price sensitivity to upfront fees, monthly fees and contract lengths for both security systems and security systems with access control.
It also assesses consumer interest in financing add-on home control products, revealing that 61 percent of those intending to purchase security prefer to finance the hardware than to pay cash up front, which would alleviate the financial burden of adding multiple smart products and cameras to a system.
“Price sensitivity is likely the major reason that intentions to buy additional control devices are unfulfilled,” Abdelrazik says.
“The lack of interest in the smart home bundle also indicates that pricing is an obstacle. Therefore, dealers need to consider a strategy that offers the most desired products at the point-of-sale and then provides upgrade options over the life of the customer.”
Additional research includes:
- 67 percent of those intending to purchase a security system in the next year want video alerts when someone is approaching the home.
- On average, consumers report paying an additional $8.91 for interactive services and an additional $15.51 for home controls.
- Only 8 percent of intenders state a preference for a security system with no add-on products.
- Security dealers need to offer more than just professional monitoring to compete with smart home and DIY products. Additional solutions could include video verification services, or aging-in-place/independent living solutions.
This article originally appeared on our sister publication Security Sales & Integration's website.