It’s a strange time for physical security in commercial real estate. After protecting empty commercial buildings for the last few months, the physical security industry now faces new challenges for the long-awaited return to the office. Maintaining a secure environment for assets and occupants while limiting security personnel to reduce the overall number of people in a building, for example, or understanding the role of security in helping to enforce social distancing and reduce the spread of the virus. The three key segments of the physical security market are feeling this disruption differently, but all must innovate to succeed in a post-COVID world.
The video surveillance market represented 56% of world sales of physical security products in 2019, according to our Q4 2019 Physical Security Business report. When the outbreak and lockdowns took hold in China in Q1 2020, supply constraints began to impact the global market. However, by the time factories reopened in China the rest of the world had begun their own lockdowns and stay-at-home policies that led to project postponements. As the global pandemic continues and a deep recession looms, spending has been frozen and demand for video surveillance has fallen significantly.
However, in a socially distanced world that demands minimal security personnel, video surveillance only becomes more important. Without people, cameras become the eyes of security managers for protecting assets from theft and vandalism, but also protecting occupants from the virus and everything else. Video Analytics also offers people counting to support social distancing. Other innovations tackle the virus more directly.
“Innovation continues in the video surveillance industry in the face of the coronavirus pandemic. Following the outbreak, a number of technological innovations have been developed as direct result, alongside many existing technologies which have found a new market or increased demand,” says Josh Woodhouse, Principal Analyst at Omdia. “Thermal body temperature monitoring solutions are the most prominent example and have attracted huge interest. The concept is to use thermal imagery as an additional screening method to identify elevated human body temperature as a potential symptom of the coronavirus.”
Access control held the second-largest share of the physical security market, albeit with less than half the world sales value of the video surveillance market (24%), according to our late 2019 report. Access control generally serves the biggest buildings and the largest companies, where we have seen the strongest occupant safety responses, symbolized by the long-term or permeant work-from-home policies of big tech firms. Consequently, this segment has felt a lot of disruption due to the COVID-19 pandemic and its various mitigation measures.
Firstly, high-tech physical access control essentially serves the same purpose as a low-tech lock for an unoccupied building. Secondly, the buttons, touchscreens, turnstiles, and fingerprint scanners employed by the wide variety of existing access control systems suddenly become the surface every building occupant touches, creates an infection risk. Thirdly, the cautious response and highly anticipated consolidation in large commercial real estate will present a challenge to access control companies, unless access control becomes part of the post-COVID solution.
The access control industry must now focus on the various contactless access control technologies that have been emerging in recent years. NFC will get a boost alongside smartphone controls, biometrics will find new life by swapping fingerprints for voice, retinal, and facial recognition (face mask policy permitting). Access control can also play a vital role in people counting for social distancing, as well as identifying and informing those who may have been exposed to a specific occupant that tests positive. While access control enabled building compartmentalization allows even more comprehensive control and prioritized security.
Intruder Alarms was the third largest segment identified in our 2019 physical security market report, with 20% of total world sales value. After initial supply constraints, the residential market experienced a drop in demand as many stayed at home, but there has been an increased demand in commercial verticals as businesses attempt to secure unoccupied buildings. As we return to our commercial spaces, the intruder alarm market will need to adapt and innovate in order to maintain growth in the post-COVID era.
“In such a difficult environment, many commercial properties have been left unoccupied, even though they would see regular daily traffic of visitors in normal circumstances. This has increased the concern of business owners for the safety of their commercial premises and prompted them to install new security systems with video cameras to be better able to protect their buildings,” says Anna Silwon-Stewart, senior analyst at Omdia. “Systems that enable the user remote access to the system and the ability to change the settings or arming and disarming scenarios will be particularly popular, as they give the user the ultimate control and insight into their commercial property.”
Remote setup and system diagnostics will be much more attractive to minimize the number of people on-site, supporting social distancing, but also to reduce costs during the economic downturn. Customers will also demand faster installations to minimize contact between contractors and building occupants, this will favor easy-install wireless systems. While fears of a second wave of the virus threaten more lockdowns and unoccupied building scenarios, which may drive sales of intruder alarms through post-COVID downturn.
“Overall, this inevitable new cycle of recession will certainly reduce demand in physical security in 2020. Our current best estimate is that the 1st quarter of 2020 will show a decline of 5%, caused by reduced demand in Asia, and specifically China, which is the largest single market for Video Surveillance in the world. Further declines in the next 3 quarters will almost certainly follow,” predicts Memoori.
“The forecast for 2021 will depend on how the measures to control COVID-19 take hold. If the pandemic shows that it is under control by the end of 2020 then world sales of Physical security equipment could return to growth by the 2nd quarter of 2021. After all, COVID-19 is a temporary and not a structural issue.”