Security Dealer & Integrator

AUG 2018

Find news and information for the executive corporate security director, CSO, facility manager and assets protection manager on issues of policy, products, incidents, risk management, threat assessments and preparedness.

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44 Security Dealer & Integrator / August 2018 With that in mind, security deal- ers – just as they did when the MSOs joined the industry a few years ago – would be well-served to leverage the increased marketing dollars being spent. "ere are many many millions of dollars being spent telling peo- ple they need security that was not being spent before," Johnson says. "We can either participate in that market expansion by making some adjust- ments, or we can dig our heels in." Of course, nobody in the security dealer space can compete with the brand awareness of a company as large and capitalized as Amazon; however, on a smaller scale, ADT's marketing has already proven an interesting sta- tistic when it comes to local competi- tion, according to Pearson. "If you break it down into local markets, local companies outpace ADT from a brand awareness perspec- tive," he says. "(Dealers can) leverage that and double down on that local Automated smart home systems are a growing trend among mainstream consumers; in fact, according to Parks Associates, 48 percent of U.S. broadband households intend to buy at least one smart home device this year, up 66 percent from 2017. This reliance on technology is increasing the need for support for smart home and DIY security systems. As more consumers integrate intelligent devices into their homes, security dealers and integrators are faced with a new opportunity to act as the home- owners' trusted experts – but that means that they need to start thinking about how to service and sup- port these smart home devices. The average homeowner should not be expected to monitor the security of their device or to trouble- shoot complex issues. Even tech-savvy early adopter connection, because Amazon's weak- ness is not going to be on price or ful- fillment – they do that really well – but they don't have the experience, and they don't have great trust as more news comes out about listening and recording in the home (via Alexa)." How Can They Offer $10 Monitoring? In the residential security market, the cost of monitoring is the most visible manifestation of the Amazon Effect. According to several internet reports (including Tinkertry and IPVM), the Ring Alarm system will be profession- ally monitored for $10 a month by Rapid Response. Any security dealer who has researched the pricing of third-party central station monitoring would acknowledge that Amazon is certainly going to eat a portion of the monitoring cost to gain market share. But this is simply Amazon's Stan- dard Operating Procedure. According to a 2017 Forbes article, Amazon lost $7.2 billion on shipping costs in 2016, which, as writer Steve Dennis said, "puts retailers in the untenable posi- tion of choosing between ceding mar- ket share to Amazon or lowering their prices to uneconomic and unsustain- able levels. Most have chosen the latter strategy and are paying the price." Traditional security dealers are not going to offer $10 monitoring and sur- vive. "e answer is not going to be to match their pricing, because that's just not going to be possible for any of us," Pearson says. "Instead, think about what your competitive advantage is – we all need to double down on service, reputation, experience, and leverage our local connections." "On the monitoring side, all of the companies that are really being impacted by SimpliSafe and Ama- zon pricing…have to be very flexible now in the way they sell to custom- ers," Imperial Capital's Jeff Kessler consumers are frustrated, and many are abandoning efforts to link their technology together – potentially losing out on the full value of a connected home ecosystem. On average, consumers report spending two and a half hours troubleshooting between self- help and customer support, and speak with three different people to resolve an issue. Some smart home devices from various manu- facturers may work together, but customer support points the finger at each other for problems, leaving customers dissatisfied and frustrated. In many cases, the perceived technical complex- ities associated with these devices serve as a barrier to smart home adoption. "Services that increase device reliability will increase consumer likelihood to purchase smart home devices," says Patrice Samuels, Parks Associates Senior Analyst. Smart Home Service Even with DIY products, there is an opportunity for dealers and integrators to provide ongoing support Cover Story

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