Industry Trends
The security industry in North America has seen consistent growth over the past decade and shows no signs of slowing. Retail sales in the industry have an average growth rate of 20% per year. The video surveillance industry has grown at an even faster rate due to the onset of new and reliable technologies like higher compression formats in DVR’s, the decrease in costs of components and finished goods due the increase in demand (and therefore supply), and most importantly the increase in crime and the reporting of it.
The video surveillance industry, as a percentage of the security industry, has grown from an estimated 20% of the security industry in 2002, and is projected to become 35% of the industry by 2009. This growth is driven by many factors, such as industry saturation in other security categories and consumer demand due to industry trends.
External Environment
 As previously stated, the video surveillance industry has seen significant growth as a result of several industry drivers, with crime being the most significant. Crime is more specifically broken down into the following: war, terrorism, child abduction, property crime, and corporate theft. All of these invoke a sense of fear in the consumer, and motivates them to find a solution that gives them the peace of mind that they are protected.
During the past five years, price erosion, increased product sophistication, and increasing ease of use have caused a major shift towards video surveillance in the security industry. Do-it-yourself video surveillance has become increasingly popular due to lowering costs of technology, and increased availability in retail stores. Digital video recorders (DVRs) are the main growth driver within the video surveillance industry, as they have become more affordable, easy to use, and reliable in the last few years. The industry is also seeing a shift towards IP ready cameras and systems, as the majority of North America is now wired for high speed internet allowing for more robust video quality and quantity.
Economic conditions also play a factor in the industry, as disposable income increases, so do purchases of security products. Historically, the age group with the most disposable income is 55 and older and as this age group increases in size with baby boomers growing older, the market for these products increases. Within the last decade home owners have begun to take on home improvement projects on their own rather than outsource to a contractor.
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