Do (some of) It Yourself
Since the first surveillance cameras began appearing on big box shelves, some consumers made it clear they liked putting their own systems together.
The DIY trend certainly seemed to have carved out its own track, separate from the professional security market.
August 9, 2016 By Linda Johnson
Now, a new home automation model seeks to take advantage of the DIY market by combining aspects of DIY with a monthly monitoring charge. While some dealers may the DIY market stay separate, there are others who welcome this new, perhaps unexpected, opportunity to earn monthly revenue.
“DIY is becoming the fastest growing segment of the residential market,” says Keith Jentoft, integration team at Melville, N.Y.-based Honeywell, Security and Fire, which recently introduced a main example of the new home automation model.
“Honeywell wanted to provide the typical alarm dealer, who does not have millions of dollars to do their own development, the opportunity to participate in the DIY market and make RMR.”
The product, called DragonFly, was launched at ISC West this year and consists of a hub kit, an app and indoor and outdoor cameras and is packaged as “business-in-a-box.” The customer orders it online and after it arrives, downloads the app and installs it. They buy a monitoring plan through the app, and dealers earn RMR from the monitoring contract.
“DragonFly is chasing the millennials, the 20-somethings, who are going to Amazon.com or Best Buy to purchase cameras. They’re not looking at a professionally installed alarm system. So we’re trying to bring them into the RMR eco-system, where they normally wouldn’t be,” he says.
The role of dealers is to promote the website. They don’t handle the product. They also don’t need to train staff in the product. Customers who have questions contact Honeywell technical support. Dealers can also keep the work they do for the DIY product line separate from their regular business of selling and installing alarms.
Jentoft says the response from dealers to this new hybrid home automation model has been positive. They recognize the DIY market is an entrenched feature of the security market, he adds, one that’s likely to grow as people who think in terms of professionally installed systems get older.
Moreover, he says, the new approach will help deliver future customers to dealers. Customers who take the system when they’re young are more likely to consider larger, professional home automation systems later on.
“By doing this, I’m not cannibalizing the market, I’m bringing into my residential portfolio consumers that wouldn’t buy a normal system anyway. And as they move up in the food chain and become more affluent, I can bring them into the normal part of my business. It’s not a threat. It’s an opportunity,” he says.
Another hybrid home automation product is made by Sarasota, Fla.-based Clare Controls. Although the system, which includes a hub and an app, is installed by a professional installer, it integrates with many common off-the-shelf devices. Thus, the peripherals can be purchased from Clare or any authorized big-box reseller, says Delia Hansen, vice-president of marketing.
The customer has the option of self-monitoring or taking a professional monitoring contract. But remote access to the system is available only with a monthly fee.
“We are introducing a premium subscription of $12.95 a month to revenue-share back to the installer. The subscription gives the consumer remote access; they’re able to set up personalized scenes, schedules, notifications and self-monitor the system,” she says.
After the system is installed, owners can log into the company website and buy DIY products to expand their systems themselves. “With some of our products, you can add them yourself, without calling a professional. But that’s after the initial installation is done by a professional.”
Hansen says dealers like this system because it gives them the opportunity to offer the self-monitoring feature. Some clients do not want to commit themselves to a monitoring contract.
“The dealers like it because it gives them a step-down offering, and customers like it because it’s on their terms. The contract is month-to-month instead of annual, and you can terminate and activate at anytime without penalty,” she says.
The trend to self-monitoring is likely to grow, Hansen says, in part because people want to avoid false alarm fees.
“Once it’s self-monitored, you as the consumer get to choose whether you want to call an infraction in or not. You never have to worry about a false alarm,” she says.
“I think the desire for personal security will increase in the coming years, and people understand what false alarm fees mean to their pocketbooks. They will look for alternative choices. The number of security contracts will increase, but so will the number of people who want some aspects of what a security system can offer without the contracts and accidental fees.”
Paul Whyte, owner of Markham, Ont.-based Cybernetics, which specializes in medium-to-large custom home automation projects, says he thinks the hybrid home automation model is an interesting one and it will likely catch on.
“It’s a model that will appeal to the gen-Y and gen-Z age groups because these systems are a lot more straightforward to install. You basically have the brain, and you add a camera and motion detector, and you’re good to go. It is pretty straightforward for the average younger person, and they’re a lot more techie than the older generation and a lot more connected. This, for them, will make a lot of sense.”
The reaction of dealers to the chance to get into the DIY market, Whyte thinks, is likely to be mixed.
“There are dealers who have been in the business for 20 or 30 years, and there are dealers just coming in. Some dealers will be a little more resistant to this new tech.”
However, he believes security dealers have to be realistic about the DIY market. It wasn’t that long ago, he says, that people went to cellular phone shops to get cell phones, and if you wanted one in the car, you went to an expert to have it properly installed.
“Now, that’s changed. You can buy cell phones at Best Buy and Staples, and it’s gone from a custom install to a commodity. Alarm systems are going that way, too. You used to have a professional installer bring in all his tools, all the motion detectors and the wires, where now you can go to Home Depot, pick up a box, and if you’re able to load some batteries into these things and follow a couple of instructions, you can do it. To some, that’s going to be a lot more appealing,” he says.
“You have to be willing to adapt to change, especially someone who’s in the tech business. If installers want to stay in business, they have to adapt.”
Myron Jacobsen, owner of Prince Albert, Sask.-based Thor Security, a Reed Security authorized dealer, says there could be a downside to a hybrid model. He questions whether, by participating in the selling and in some cases the installing of systems, the lines of responsibility could become blurred.
“Who’s the customer going to go to if they have an issue with it? If a customer installs something they’ve purchased through you and they’re paying you RMR every month, then they’re going to rely on you to come and fix it. Or, a customer installs a DIY camera and he gets broken into. He didn’t install his camera correctly. I promoted it and I set something up for them. Who is to blame? Where does the liability lie? It could become a mess,” he says.
“Right now, if we install something, we guarantee it will do what it’s supposed to do.”
For Nathan Baldry, managing partner at Edmonton-based Liberty, there will always be a place for the DIY-type products in the industry because a certain segment of customers want to install systems themselves, whether it’s home theatre or security cameras.
“There’s always a do-it-yourself-er kind of person that likes the challenge of learning something new or the challenge of putting something into their home, and feeling the gratification at the end at being able to do something like that. But I think it’s the minority, as opposed to the majority,” he says.
He does not believe a product catering to the DIY market will take over the industry. Lack of time and the desire among some customers for service will keep the demand for professional dealers strong.
“I think that we live in such a busy world; people don’t have time to mow their lawns, let alone install things like this. A perfect example is doorbell cameras. You can buy them at Home Depot, but we’re installing hundreds a month right now because people just don’t have the time for it. They also want the warranty and the hassle-free service, knowing that someone will come out and do service at either no cost or at limited cost.”
Some dealers will certainly not want to do the online selling the product requires, Baldry says. At his own company, however, they discovered dedicating more time and effort to their online presence greatly increased their business. He agrees with Whyte, dealers must be adaptable to change.
“We see the companies that are still not doing the automation, and they’re falling behind. We were early adopters of automation in Canada, and we saw how it allowed our business to succeed and really take off. So I think the more you kick against the changing landscape, [the more] you’re going to fall behind. You have to incorporate some aspect of it into your business model, or you’ll be in trouble.”
On the whole, Baldry says, he does not believe the hybrid model will end up promoting DIY more. In fact, he thinks, it will be good for the industry.
“I think it will make everyone more competitive. It will make our industry change quicker. Five years ago, panels and peripherals and equipment changed very slowly. Now, we’re getting new panels every six months. It’s like the phone industry: there are new phones every six months,” he says.
“So people are having to keep up. You’re having to keep on top of new technology. I think it’s healthy for the industry.”
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