International. It's a strange time for physical security in commercial real estate. After protecting empty commercial buildings over the past few months, the physical security industry now faces new challenges for the long-awaited return to the office.
Maintain a safe environment for assets and occupants while limiting security personnel to reduce the total number of people in a building, for example, or understanding the role of safety in helping to reinforce social distancing and reduce the spread of the virus. The three key segments of the physical security market are feeling this disruption differently, but they all need to innovate to succeed in a post-COVID world.
Video surveillance
The video surveillance market accounted for 56% of global sales of physical security products in 2019, according to our physical security business report for the fourth quarter of 2019. When the outbreak and lockdowns took hold in China in the first quarter of 2020, supply constraints began to affect the global market. However, by the time factories reopened in China, the rest of the world had begun its own closures and stay-at-home policies that led to project postponements. As the global pandemic continues and a deep recession looms, spending has frozen and demand for video surveillance has dropped significantly.
However, in a socially distanced world that demands a minimum of security personnel, video surveillance becomes more important. Without people, cameras become the eyes of security administrators to protect assets from theft and vandalism, but also to protect occupants from the virus and everything in between. Video Analytics also offers people counting to support social distancing. Other innovations address 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 a direct result, along with many existing technologies that 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 great interest. The concept is to use thermal imaging as an additional detection method to identify elevated body temperature as a potential symptom of the coronavirus."
Access control
Access control held the second largest share of the physical security market, although with less than half of the global sales value of the video surveillance market (24%), according to our report at the end of 2019. Access control generally serves larger buildings and larger companies, where we've seen the safety responses of stronger occupants, symbolized by the long-term or permanent work-from-home policies of big tech companies. Consequently, this segment has suffered many disruptions due to the COVID-19 pandemic and its various mitigation measures.
First of all, high-tech physical access control has basically the same purpose as a low-tech lock for an unoccupied building. Second, the buttons, touchscreens, turnstiles and fingerprint scanners employed by the wide variety of existing access control systems suddenly become the surface touched by each occupant of the building, creating a risk of infection. Third, the cautious response and highly anticipated consolidation in large commercial real estate will present a challenge for 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 along with smartphone controls, biometrics will find new life by exchanging fingerprints for voice, retina and face recognition (if the face mask policy allows it). Access control can also play a vital role in counting people for social distancing, as well as identifying and reporting those who may have been exposed to a specific occupant who tests positive. While access control enabled compartmentalization of the building, it allows for even more complete control and prioritized security.
Intruder alarms
This was the third largest segment identified in our 2019 physical security market report, with 20% of the total value of global sales. After initial supply constraints, the residential market experienced a drop in demand as many stayed home, but there has been an increase in demand in commercial verticals as companies try to secure vacant buildings. As we return to our retail spaces, the intrusion alarm market will need to adapt and innovate to sustain 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 visitor traffic under normal circumstances. This has increased business owners' concern about the security of their commercial premises and has led them to install new security systems with video cameras in order to better protect their buildings," says Anna Silwon-Stewart, senior analyst at Omdia. Systems that allow the user remote access to the system and the ability to change settings or assembly and disassembly scenarios will be particularly popular as they give the user maximum control and knowledge of their commercial property."
Remote configuration and diagnosis of the system will be much more attractive to minimize the number of people on site, which will favor social distancing, but also reduce costs during the economic downturn. Customers will also demand faster installations to minimize contact between contractors and building occupants, this will favor easy-to-install wireless systems. While fears of a second wave of the virus threaten more lockdowns and unoccupied building scenarios, which may boost sales of alarms against intruders through the post-COVID slowdown.
"Overall, this inevitable new cycle of recession will certainly reduce the demand for physical security in 2020. Our current best estimate is that the first quarter of 2020 will show a 5% decline, caused by reduced demand in Asia, and specifically in China, which is the world's largest single market for video surveillance. Further declines will almost certainly follow in the next 3 quarters," Memoori predicts.
"The forecast for 2021 will depend on how covid-19 control measures are strengthened. If the pandemic shows it is under control by the end of 2020, global sales of physical security equipment could grow again by the second quarter of 2021. After all, COVID-19 is a temporary and not a structural problem."
Source: memoori.
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