Now might be the right time to start looking at your customers through the lens of smart security cameras. Or, to help them look at their own homes and offices through a security cam of their own.
It’s rough out there. Ransomware attacks are in the news, employees are pilfering copy paper and USB cables, organized criminals are shoplifting pharmacies. In the U.S., a burglary occurs every 30 seconds, according to Safewise.
That’s bad news for home and business owners. But it could be good news for tech providers.
Home renovators alone spent an average of $500 on smart home security upgrades in 2019, according to home-renovation site Houzz. That number should continue to rise as folks get back into the post-lockdown swing of things.
The market for connected security cameras appears headed for real growth. As predicted by Grand View Research, sales should top $11.9 billion by 2027, up from $3.9 billion last year, marking an annual compound growth rate (CAGR) for those years of nearly 16%.
Is there an opportunity for tech providers? You betcha. Fear, uncertainty and doubt (FUD) is coming to a smart home—or office—near you. If your customers aren’t talking about smart security systems yet, they will be soon.
Let the price wars begin
How much does a decent security cam cost? The answer is complicated. The cheapest security cams are separated from the most expensive by a yawning chasm.
At one extreme, you’ll find super-cheap options on Alibaba starting at less than $2 (that’s not a typo). At the other, you’ll find high-end professional cameras retailing for more than $1,000.
Why the crazy price disparity? It has much to do with how a camera handles, or even offers, such important features as high resolution, reliability, connectivity and night vision.
For example, most entry-level cameras offer relatively low resolutions. They also rely on a Bluetooth or Wi-Fi connection to a proprietary smartphone app.
These apps — some well-designed, some just terrible — show you a feed from the camera. They also can alert you when an anomaly like unauthorized movement or a pet in distress is detected.
As the price gets higher, the feature set gets richer. Also, the cameras become more complex to set up and maintain. To operate, pro-level security cams often require both a dedicated router or hub and a decently powerful PC.
Amazon Ring Always Home Cam: ready for takeoff
A few cameras can even launch autonomously and fly around your home or office to focus on a problem area. Such is the case with Amazon’s Ring Always Home Cam, which sells for just under $250 each — if, that is, you’re tight with Amazon. The camera, part of Amazon’s Day 1 Editions program, is available by invitation only.
A Wyze choice?
Conventional wisdom would have you believe that higher-priced smart cams represent the key to revenue growth. But history shows otherwise. A race to the lowest price band is inevitable.
If that’s the case, could the smart play actually be claiming the low ground first?
That’s the bet being placed by Wyze. The much-beloved, bargain-basement smart home brand offers its popular Cam v3 for just shy of $36.
Wyze’s 3rd-gen cam: high quality, low price
You might think a smart device with a price that low would be a recipe for disaster. But Wyze has been earning critical acclaim for previous versions priced at just $20. Version 3 seems to be on the same track to success, despite its relatively steep price increase.
So how do you make money on a product that cheap? The answer is twofold: sales volume and subscriptions.
Turning up the volume
Here’s how volume works. First, consider that most homes and offices have multiple rooms. Unless your customer lives and works in a small studio apartment, they’ll likely want to monitor various locations.
It stands to reason, then, that your average security cam sale could include multiple units to cover everything from bedrooms to break rooms.
It’s also possible that each camera sold could catalyze the sale of a peripheral product. For instance, Wyze offers a video doorbell, an outdoor smart plug, and even a smartwatch that can deliver real-time notifications triggered by the security system.
Each of these devices is sold separately. So while the customer’s price tag might start at $36, it could end up much, much higher.
Of course, the seller does have to turn a profit, however small, on each sale. Otherwise, volume will just multiply their losses.
The subscription prescription
The subscription model is another smart play. First, the company sells the camera as a loss-leader. Then it makes passive income from an ongoing subscription that could lead to a bounty of profit over time.
Sure, Wyze Cam customers can use the camera without a subscription. But Wyze was also smart to pack its premium package with great features. And it set a low subscription price of just $1.25/month.
The compelling list of premium features includes package, pet, and vehicle detection; unlimited video length (the free version offers only 12 seconds of time-lapse footage every 5 minutes of operation); and an upcoming facial-recognition feature.
Can tech providers share in the passive income from a subscription model like that? The answer is, maybe.
Companies like Wyze often institute channel programs to help drive subscription sales. The remuneration varies widely and can include finder’s fees, product discounts, even long-term subscription revenue sharing.
Are you ready to take advantage of the upward trend in security cam sales? Play your cards right, and your sales could soar higher than Amazon’s flying camera.