Consolidation and Innovation Mark Smart Door Lock Segment

Last week brought news of ASSA ABLOY Group’s pending acquisition of Spectrum brands Hardware & Home Improvement (HHI) division, which includes door lock brands Kwikset, Baldwin, Weiser and EZSET. The purchase agreement for $4.3 billion in cash includes four other kitchen, bath, and hardware brands and is slated for closure by early Q4 2021.

This latest move by ASSA ABLOY, the Swedish multinational behind Yale, follows on its acquisition of August Home in 2017. In the US market, ASSA ABOY will now own four of the top 5 smart door lock brands (Kwikset, Yale, August, Baldwin) leaving only Schlage (Allegion) outside the fold.

How will this move impact the market? Consolidation of this scale often opens up opportunities for efficiencies in buying power across the supply chain, shared innovations in hardware and software across brands, and enhanced influence in channels where a brand might compete less effectively. Kwikset has long dominated the home builder channel, competed aggressively in the retail and security channels, but lagged Schlage and Yale in the multifamily channel. Partnership between Kwikset and Yale in the multifamily space could enable both brands to take on Schlage more strongly.

In the meantime, startup brand Level Home may be creating a new threat at the retail level with its “invisible” smart door lock that fits into the existing dead bolt. The breakthrough innovation branded as Level Lock solves the self-installation challenge by enabling installation with nothing but a number-two screwdriver in fifteen minutes, while it’s powered by a CR2 coin battery for reportedly a full year. The innovative lock has attracted the attention of investors, such as Walmart, which has announced it will soon bundle the lock with its InHome services available now for groceries with plans for handling returns and pharmacy orders soon. With an InHome subscription, Walmart offers two models of the Level Lock (Level Bolt and Level Touch) for $49 with free professional installation.

The jury is still out on consumer-readiness for in-home delivery. Reports are that the uptake rate for Amazon Key has been less than expected, and even then, garage delivery is more welcomed than through the front door.  A number of smart door lock efforts have come and gone in the face of such stiff market dominance by major players, but should Level Lock be successful in gaining consumer traction at a profitable scale and develop further innovations, they may well find themselves the target of acquisition. At least that’s the well-established pattern.