The winds of change are blowing across the USA for the professional installer industry, changes espoused by an industry veteran and founding member of the Custom Electronic Design and Installation Association (CEDIA).
At a number of recent “Remodel your business” seminars, Rob Gerdhardt has highlighted the limitations of traditional installation business models, and the threats posed by some of the larger technology giants who are developing innovative new product and service solutions to compete with you.
Although more openly debated in the United States, this is a problem facing the global professional installer industry.
One of the biggest and most obvious threats today comes from increasing popularity and demand from consumers for wireless and internet based ‘cloud’ services and products, making use of consumer appetite for mobile products, services and Apps.
Typically this new generation of high-tech products and services can be delivered for self-installation, or simply downloaded by the consumer, by-passing the need for professional install.
The race to control the ‘connected home’
Driven partly by the dramatic uptake of smartphones and more recently tablets, consumers today can access a much greater variety of information and services than ever before, allowing far more awareness and control over all aspects of their lives, regardless of time of day or location.
Like a lot of technologies and propositions, the vision of the ‘connected home’ has been discussed for years, but for a variety of reasons has never quite managed to find its way into consumers’ homes.
However, thanks to the strong penetration of smartphone and mobile devices, the arrival of 4G wireless networks and fibre optic broadband, the number of new value added services that can be offered into the home has seen a dramatic increase.
The race to control the home is now on, and all sorts of service providers from utility, mobile and broadband operators, to insurance and home security companies are planning to get in on the act!
Security is in decline
One of the most obvious applications to help enable the connected home is an integrated and remotely controlled home security monitoring system.
However as recently reported by Parks Associates, the percentage of US households with security monitoring has actually declined from nearly 19 per cent in 2007 to around 17.5 per cent now.
The US has always led the industry in terms of home security penetration, and was seen as the benchmark for how growth could be achieved. This decline highlights a major issue facing the global security industry.
Home security purchases have historically been driven by only a few main factors: response to a burglary event, buying a new home (construction industry), and homeowners buying security systems when they move properties.
However, as crime rates generally continue to fall, and as the economic downturn has seen fewer first time buyers and house moves, the impact of these traditional catalysts continues to reduce.
In order to survive, home security companies must find new ways of appealing to their customers, expanding their offering with new features and services to entice homeowners.
Broader offerings needed
Security providers must transition from purely offering stand-alone products and services to incorporating a much broader universe of offerings to compete.
Potentially the biggest competitor in this space, and the one best placed to diversify its service offering to the connected home market, is the mobile operator or Telco.
With a vast existing consumer base, direct relationships with subscribers, and strong customer support networks already in place, there is now technology out there for them to adopt and quickly move in to offer services for the connected home
This is already happening in the USA, as demonstrated by organisations such as cable television and broadband provider Comcast Corp offering its Xfinity home security service bundled with lighting and energy management and video monitoring.
Verizon Communications Inc is also piloting a home security, heating and air conditioning controls service, bundled as an option with its FiOS fiber-optic Internet service.
The market is, however, by no means monopolised, and should be seen as a great opportunity
A service provider that has access to consumers in their the homes is in a great position to capitalise on the new plug-and-play technologies being developed, and can broaden their business offering into new areas such as smart energy, home automation and telecare.
Grasping the opportunity
Until now, the only solutions available to consumers were expensive bespoke systems requiring complex in-home connectivity and cabling.
The market was a niche within a niche. There was no simple platform or technology which could bring all the elements of a connected home together, and because of that, consumers were wary of the concept.
But as now proven by companies like Intamac, web technology has developed rapidly.
Powerful cloud-based platform services are available, employing open standards to offer simple APIs that allow providers to quickly and easily develop and deliver a range of interactive ‘home monitoring’ services to their customers.
The consumer interface is now through a website or smartphone, and can be branded and integrated within existing service offerings to give consumers a seamless experience and to stretch brand recognition and reach.
Well placed for the move
The security industry is well placed to move into this market; installers already have an established customer base and a trusted route into the home.
Professional installers need to start embracing these new technologies, developing new product and service propositions which broaden their business offering, help reduce customer churn, and create new repeat revenue streams.
What is clear is that it is not a question of ‘if’ security installers will have to embrace internet-based products and services, it is a matter of ‘when’.
There are technologies already available which, if adopted early, can enhance your business model and help you offer new value added services to your clients.
You just have to choose to explore the options – the connected home market is expanding fast, and although it hasn’t quite reached the mass market yet in terms of comprehensive home networking, we’re really not far from it.