Australian home security provider Scout Security Limited (ASX: SCT) is targeting a major market opportunity in the USA with the launch of a new DIY security solution and product suite.
Scout Security co-founder and CEO, Dan Roberts, said the new offering is targeting the alarm dealer channel, comprising more than 13,000 companies in the USA.
He said these 13,000+ alarm dealer companies support sales through the traditional home security industry, a market worth US$23 billion per year in the USA alone.
“We’re excited to finally announce Scout’s product suite for alarm dealers. We’ve known this was a need in the dealer channel for some time now, and our team has worked incredibly hard to get the new product suite to market,” Mr Roberts said.
“As awareness of DIY solutions grows, alarm dealers need a product that rivals what consumers can find online. Through Scout’s new product suite, the dealer maintains the advantage of their local connection with consumers and, now, we’re able to offer them a product that rivals the best systems available online. Consumers are getting the best of both worlds with this offering.
“Given the history of alarm dealers selling in local communities, we know that this can be a huge channel for Scout. By allowing dealers to price and brand the solution as they see fit, we give dealers flexibility to maintain their margins, while not creating any channel conflict with Scout’s direct offering.
“In time, we believe that sales through the alarm dealer channel could exceed sales from our direct-to-consumer offering, which is exciting,” he said.
Mr Roberts said that Scout brings dealers an enhanced offering that provides flexibility on branding and pricing of both the hardware and security services in their local markets. This empowers dealers to sell Scout’s new product suite in a way that avoids channel conflict with Scout’s direct-to-consumer offering.
He said sales through the dealer channel will bring both a hardware and a recurring revenue component, with revenue and margin structure expected to be similar to Scout’s direct- to-consumer model.
The product suite for dealers opens up an entirely new channel for Scout, while leveraging everything Scout has built for its direct offering over the last four years.
Mr Roberts said that since the new product suite is explicitly built to be white labeled, private labeled, or co- branded, the new offering may also be leveraged for partner conversations with insurers, utilities and telcos that desire a branded home security offering of their own.
Scout continues to progress discussions with additional potential resellers and distribution partners across the US retail, consumer and utility sectors, including through alarm dealers. The rollout of this product suite further enhances Scout’s ability to land partners in those verticals.
