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DIY and MIY: Opportunity and threat

If you are like me you have heard these two terms a lot over the last two or three years in our industry. Will these trends account for any meaningful piece of the pie? Should dealers be looking at them? If you are an existing alarm dealer, how do you set yourself up to handle DIY or MIY?

Truthfully, I did not pay that much attention to this discussion until I had lunch with my old friend Gordon. Gordon is in his 50s. He’s not really a “techie” or “do it yourself” guy, but he is an “early adopter” as far as technology is concerned.

Gordon recently went out to Best Buy, with no coaching, no calls to any security company, and bought and installed a DIY “security” system complete with hub, motion detectors, cameras, lock and light control and CO detectors. Gordon lives in a condo so it is fair to say that his motivation was as much about convenience as it was about security. He wanted to be able to control his lights and locks through his cell phone. The scary thing to me was he never thought about calling a security alarm dealer. He simply went to Best Buy, a place he instinctively knew would have what he was looking for. And he was right. Because we are all in the security industry, perhaps we mistakenly assume that Gordon would call one of us.

It is not like the customer service reps at Best Buy knew as much about motion detectors as a typical alarm dealer. But that did not seem to matter. Gordon said the kit was self explanatory and remarkably easy to install.

There are those who will say that Gordon is not really getting a full security system. But for him, this was more than enough. My fear is that for many people in single family dwellings, they will think the same way. They will think these systems can give them 80 per cent of what a professional system can give them — and it will probably be at less than half the price of a professionally installed system.

So let’s look at this event again. Gordon is clearly not a millennial. He does live in a multi-unit building, so that reduces his security needs somewhat. Although he bought what we would call “security” equipment, he was looking for convenience as well.

Based on what I know of him, Gordon would never have thought of going to a security dealer to get what he wanted — too slow, way too expensive and unnecessary, and he does not know the name of a security dealer anyway.

You ask, what about monitoring? A security dealer would surely have tried to push monitoring on Gordon. But Gordon is functioning with MIY and quite happy having all signals come directly only to his smart phone.

He can call the police or fire department if he sees something very definitely wrong in his condo. He has been around enough to hear about his friends having to deal with false alarms, the hassle and the potential fines. He may even know that in a city like Toronto, police reaction to an alarm is very slow without verified response. In fact it was when Gordon leaned across the lunch table and said to me that based on his experience, he would be seriously worried about the future of the monitoring business that I really took note.

Aside from what Gordon thinks about all this, here is what I think. Based on the small amount of research I have done, I think DIY and MIY are definitely here to stay in some form or other. I think they are capitalizing on our whole digital, interactive, Wi-Fi-enabled, smart phone dominated world and giving customers a lot of convenience and some security at a much reduced cost. It is possible these new DIY systems have the potential to take the smart home penetration rate from its current 20 per cent level for monitored systems to 50 per cent and above over the next five to 10 years. Just look at the names that are in this market now, and only in the last two to three years: Honeywell, ADT-Samsung, Google Nest, Ring, Amazon, Kwikset, Vivint, Apple and Best Buy to list some of the bigger names. I have never seen so many new names offering what we have to call a “security” product since I joined the industry 25 years ago. They cannot all be wrong. You can bet these big companies have not entered this DIY market to try to steal part of the 20 per cent penetration of monitored security systems. They want part of the other 80.

How far will this DIY/MIY trend spread? For sure it is attacking the traditional alarm market for residential systems including condo and apartment owners like my friend Gordon. And yes, I think it will make it more difficult for alarm dealers to sell first-time home buyers on a professionally installed system.

What about existing monitored accounts and the potential for new ones? Is monitoring in danger? Let’s put it this way. DIY and MIY are going to make it tougher to get professional monitoring accepted in certain situations. Certainly if I was an alarm dealer, I would be watching my monthly monitoring rates. To me, these new interactive systems being sold by the high volume alarm dealers at a rate of $50/month are at risk in the future.

Victor Harding is the principal of Harding Security Services (victor@hardingsecurity.ca).

This article originally appeared in the March 2018 issue of SP&T News.