Scout Security adds Walmart online sales channel to growing retail market

Home security provider Scout Security (ASX: SCT) is set to expand its market coverage in the US after announcing that Walmart, one of America’s leading retailers, would soon stock its proprietary home security system – Scout Alarm – as part of its online catalogue.

Both companies have said that there is no set duration for the deal and have confirmed that both parties will review the terms of the non-exclusive contract each year.

The deal follows up Scout’s existing retail agreements with the world’s second largest provider of security services, Stanley Black & Decker, and existing key shareholder, Amazon.com.

As a means of expanding the potential of additional sales and raising market traction in the US, Scout says that Walmart will enable Scout to build a “best-in-class omnichannel experience” and therefore help both companies to find synergies in home security – a growing market niche in the US.

Commercially, the deal is aimed at supporting growth in both “upfront and monthly monitoring services revenue” for Scout, according to the Australian home security provider.

The Scout Alarm is initially set to be sold through Walmart’s US online store, with the possibility for expansion to additional country portals and other Walmart in-store sales in the future.

Walmart is a retail brand with international presence including more than 11,000 stores in 27 countries, in addition to a string of eCommerce websites that offer products online. Walmart is a potentially significant sales channel for Scout given its US$500 billion per year in revenue and millions of customers around the world each year.

According to the terms of the deal, Walmart will stock the Scout Alarm wireless home security system as of November 2018, a product which Scout says is “ideal for renters and homeowners alike”.

Flexible product choice

Walmart already stocks a wide range of security products, but Scout’s system will complement its existing range and thereby offer “complete flexibility”, according to Scout Security.

One of the key selling points being offered by Scout to its customers is providing bespoke components, customised product finish, customisable actions during operations and varying degrees of support.

Furthermore, Scout Alarm is made available with month-to-month pay scales, DIY installation, 4G cellular backup, remote self-monitoring and 24/7 automated police dispatch.

To start off with, Walmart will offer what it calls “initial purchase orders” as a means of gauging the popularity of the product for its US audience and plans to stock the wireless system in time for the 2018 holiday season, before initiating a “larger push into retail” next year.

“We are committed to building a best-in-class omnichannel experience for our customers, which is an area in which Walmart excels,” said Dan Roberts, co-founder and CEO of Scout Security.

“Partnering with Walmart empowers us to bring our award-winning suite of connected home security products to a bigger addressable market and supports our long-term strategic objectives,” he added.

This morning’s news of the Scout Alarm being made available for the US holiday season helped Scout Security’s share price to gain around 10% up to $0.21 per share.