Strategy Session: Get “Smart”

As members of the Imaging Alliance, we’re lucky enough to have the NPD Group on our board to provide us with relevant industry information. At our last board meeting, Ian Hamilton, president of NPD’s Technology Sector, presented his overview of CES 2019. He honed in particularly on the security camera market.

Here are a few interesting facts:

1. Home automation product adoption among U.S. online households (22%) is still in the early adopter stage.*
2. Security cameras comprise the largest portion (30%) of total home automation sales in the U.S.**
3. Sales of security and monitoring equipment will reach $1.5 billion in the U.S. by 2021.**

Notice the word that comes after the word “security”?

I believe we are an industry that is facing a golden opportunity to share in the growth of the home security and “smart” home phenomenon. And we’re not taking advantage of it.

Looking Back: Historical YoY Dollar Change ($M)

Who are the current technology brands leading the smart home and home security camera markets? Canon? Nikon? Sony?

No. They are Arlo, Ring, Blink and Nest.

At the same time, much of the technology that is lacking in home security cameras are layups for us, such as autofocus, 1080p video resolution, 360º capture and optical zoom.

Our industry’s strength is in the reputations of incredible brands that have stood the test of time. If I were to buy a security camera, and it had the name Nikon, Canon or Olympus on it, wouldn’t it immediately enter into my consideration set? Sure, it may be just a licensing opportunity, but why aren’t our names on these home security cameras?

Basics for Other Imaging Components

As we know, the world of imaging is changing, and the DSLR camera market continues to shrink. Isn’t it about time we become part of one of the fastest growing markets in consumer electronics?

Aside from the products that possibly should be created by the major imaging brands, I believe the larger opportunity is for photo retailers to jump on the smart home bandwagon and become resellers of smart home products and installations.

Think about it.

As owners of camera stores, you are not simply selling imaging equipment. You’re selling high-end technology products that are on the cutting edge of the consumer electronics spectrum. And while the technology may seem simple to you, it’s like a foreign language to most people who walk into your stores.

Now think of the smart home. I recently purchased a new home and was intent on making it a smart home as much as possible. Enter Alexa, smart hubs, smart front door locks, Nest thermostats, smart light bulbs, smart garage door openers and a Ring doorbell complete with a security camera.

If you listened closely, you would have heard my cry for help.

What I really need, and am willing to pay handsomely for, is someone who totally understands and is comfortable with technology. Someone who can help connect my smart home and all of its components. Someone who really understands how cameras work. And most important, someone I trust to come into my home.

Think about the people you employ in your stores. Could they sound like the person I just described?

Get “Smart”

As small business owners, I’m sure you’re always looking for new products to sell that make sense. But maybe keeping to the imaging infrastructure is limiting your potential to expand into new growth areas. Also, because you are a local retailer with relationships and trust in your communities, wouldn’t you be better than the 1-800-SmartHome people your current customer will find on the Internet?

It feels like our industry is missing out on a tangential business that is booming, because in some cases we’re still painted into our current box. The people in your store who know how to sell a camera can certainly learn how to sell a smart home with a security camera as its core product. Selling smart devices (Best Buy is very good at it) along with an up-sell service to help connect the devices in the home might be a growth opportunity we’re letting slip away.

I’ve always been impressed how smart retailers are able to pivot at the right time. Stay who you are but also offer other services that would benefit both you and your customers.

This could be a smart time to try something new.

Notes:
* Source: NPD Connected Intelligence, Connected Home Automation Report, December 2018
** Source: The NPD Group, U.S. Retail Tracking Service, Decentralized IP cameras only, Oct.– Dec. 2018
*** Source: The NPD Group, Future of Tech Report 2019