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Security Systems & Services Market 2020Security Is Big Business – and Was Very Big During 2019Despite a slower residential construction market during the first half of 2019, SDM’s 2020 Industry Forecast Study reported the participating security integrators and dealers said their total annual revenues increased by an average of 16%.Another critical measurement is RMR, or recurring monthly revenue, for long-term contracts. Although 70% of integrators and dealers’ 2019 RMRs increased as they did during 2018, the average increase for 2019 was much greater at 28%.The companies participating in the survey for Security Sales & Integration’s annual Gold Book (published January 2020) said their 2019 revenues increased 4% on average, from $14.2 million during 2018 to $14.8 million for parison of Electronic Security Revenues, by Type of Business, 2019 vs. 2018Type of Business20192018Type of Business20192018Video surveillance20%20%Access control15%12%Intrusion17%18%Other16%15%Fire15%13%Home automation8%9%Integrated systems8%13%Security Sales & Integration, January 2019 and 2020 2020 Could Be Even BiggerThe SDM’s 2020 Industry Forecast Study found 65% of participating businesses were expecting their 2020 revenues to increase, and by an average of 19% for those businesses with expansion plans, with 34% remaining the same and just 1% anticipating a decrease.At an average of 11%, dealers and integrators participating in the Security Sales & Integration survey weren’t quite as optimistic about their 2020 revenue growth, but any double-digit increase is still a healthy trend.Of course, the effects of the coronavirus is likely to temper this optimism, but integrators and dealers may find local business owners are still interested in added security with their businesses closed, and homeowners since they must spend more time at 2020 Business Challenges for Security Integrators and DealersChallengePercentChallengePercent#1: Finding/Retaining employees42%#7: Protecting profit margins26%#2: Staying current with technology38%#8: Responding to customer demands18%#3: Increasing sales33%#9: Diversifying business16%#4: Generating recurring revenues32%#10: Customer collections/timely payments15%#5: Competing effectively29%#11: Training employees14%#6: Controlling costs27%SDM, January 2020 Security Contributing to Decreasing Property CrimesFollowing a 6.4% decrease in 2018 property crimes across the US, the Federal Bureau of Investigation (FBI) reported a 5.6% decrease during 1H 2019, with burglaries decreasing 11.1% after decreasing 12.1% during 2018.Larceny-theft decreased 4.2% nationally during the first half of 2019, motor vehicle theft decreased 6.7% and arson -12.5%. Larceny thefts in nonmetropolitan counties decreased almost twice as much as in metropolitan areas, or -10.3% and -5.6%, respectively. Unsurprisingly, property crimes decreased the most during 1H 2019 in the smallest cities, or 8.1% in those with populations of less than 10,000 and 10,000–24,999, while those crimes decreased just 1.0% in cities of 1 million or more. January–June 2019 US Property Crime Trends, by Type and RegionTypeUS TotalNortheastMidwestSouthWestAll property crimes-5.6%-7.3%-7.3%-4.0%-6.2%Burglary11.1%-14.4%-12.7%-10.0%-10.1%Larceny-theft-4.2%-5.7%-6.4%-2.7%-4.2%Motor vehicle theft-6.7%-11.5%-5.0%-1.4%-11.3%Arson-12.5%-15.5%-13.8%-10.3%-12.7%Federal Bureau of Investigation, January 2020Protecting Homeowners’ Peace of MindSecurity Sales & Integration reports 20.7% of companies participating in the survey for the 2020 Gold Book generated recurring monthly revenues (RMRs) from residential customers, which is 6 points less than 2018.DIY residential security products continued to be a major competitor of security companies during 2019, as these self-installed systems were 61% of new residential installations (39% professionally installed), but during 2017, DIY was 74% of the market.Of the sales of residential security systems during Q3 2019, 44% were an interactive service with smart home products, 29% a basic interactive service and 27% a traditional security system.J.D. Power 2019 Home Security Satisfaction Study: Pro-Installed and DIY-Installed Security SystemsPro-InstalledScore*DIY-InstalledScore*Brink’s Home Security857Ring Alarm904ADT847SimpliSafe900Industry average845Industry average881Vivint Smart Home839Frontpoint872Xfinity Home Security836Protect America847LifeShield (ADT)840Brink’s Home Security826J.D. Power, October 2019 *on a 1,000-point scaleHome-Improvement Security ProjectsAccording to The Media Audit’s September 2019 Aggregate Survey (57 US markets, more than 157 million adults) 4.2% of adults 18+ completed a home improvement project for alarm/security services during the past year.As expected, more than half (51.9%) were 21 to 44 years of age, which is represented by the aging of Millennials, and them becoming homeowners. A larger percentage (56.5%) of the same age group were planning an alarm/security service project for the next year.Adults 18+ who are homeowners with incomes of $100K+ are the largest, by percentage and index (19.9%/112), planning to add an alarm/security service during the next year (through mid-2020), although those with incomes less than $50K are second at 17.8%.Amount Spent by Adults 18–34 and 35–44 Who Are Homeowners for an Alarm/Security Services, by Income, During 2019IncomeAdults 18–34Adults 35–44$500–$4,999$5,000 or More$500–$4,999$5,000 or MorePercentIndexPercentIndexPercentIndexPercentIndexLess than $50,00026.0%17618.8%12711.4%8311.0%80$50,000–$74,9998.2%1084.5%608.5%815.0%48$75,000–$99,9997.3%1104.8%7217.2%1606.9%65$100,000 or more18.0%16415.5%14141.5%20727.3%136Based on The Media Audit’s September 2019 Aggregate SurveyThe Marketing of Security ServicesCompared to 0% for 2015, 5% of security integrators and dealers participating in the survey for Security Sales & Integration’s 2020 Gold Book said they develop their marketing campaigns with an outside firm/agency; however, the majority (70%) still do it in-house.More integrators and dealers are realizing the importance of branding their businesses, as 68% rated it first on a 5-point scale, compared to 59% of 2015 survey respondents. Sales & Marketing Tools and Presentation Formats Security Integrators and Dealers Use, 2019 vs. 2015Tool/Format20192015Tool/Format20192015Mfg. sales literature58%62%Industry statistics40%33%Sales literature56%69%Sales contract40%36%PowerPoint*51%44%Trade magazine/articles/ads32%28%iPad/Tablet/Laptop/Smartphone*49%46%Crime statistics25%30%Product demonstration49%67%Product samples25%36%Yard signs/decals47%49%Presentation book23%21%Company/Product videos46%41%Media on DVD/CD/flash drive14%13%Online/Website*42%57%Other5%8%Online Video or Website*42%NASecurity Sales & Integration, January 2020 *presentationsAdditional AnalysisSecurity integrators and dealers participating in SDM’s 2020 Industry Forecast Study rated video surveillance a 3.83 on a 5-point scale as the market segment that generated the most sales during 2019. Security Integrators and Dealers’ Ratings for the Current State of the Market, by SectorSectorRating*Video surveillance (including on-premises and cloud-based)3.83Access control (including on-premises; cloud or Web-based; hosted)3.54Fire alarm/emergency communications3.45Smart home/home entertainment systems3.35Monitoring3.32Perimeter and outdoor security3.30Intrusion (burglar alarm)3.29Video analytics3.18Intercom/Entry control3.18Managed services/cloud-based services3.18SDM, January 2020*on a 5-point scaleMedia Day Analysis of Adults 18–34 and 35–44 Planning an Alarm/Security Services Home-Improvement Project During the Next 12 Months*, 2019MediaAdults 18–34Adults 35–44MinutesPercentIndexMinutesPercentIndexTelevision236.5734.3%106246.939.0%110Radio212.4330.8%135191.0630.1%117Newspaper159.5723.2%152138.8221.8%159Billboards23.973.5%16911.321.8%99Internet (no email)35.985.2%8329.864.7%82Email20.252.9%11416.322.6%93Based on The Media Audit’s September 2019 Aggregate Survey (57 US markets, more than 157 million adults)Sources: Security Sales & Integration Website, 3/20; SDM Website, 3/20; Federal Bureau of Investigation Website, 3/20; J.D. Power Website, 3/20; The Media Audit Website, 3/20.Updated: March 2020? 2020 Media Group Online, Inc. All rights reserved.For Your Local and Station Information ................
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