Executive Summary
We developed a robust econometric model for an American home security company, identifying the key economic drivers behind home security system demand and producing a five-year forecast under multiple scenarios. The analysis directly informed the client’s strategic planning and continues to support real-time market monitoring.
Client Background
The client is a U.S.-based provider of home security systems, seeking to better understand the economic underpinnings of demand in a data-scarce market. Their goal was to align business strategy with macroeconomic trends and improve planning accuracy.
Challenge
With limited direct data on consumer demand for home security systems, the client needed a quantitative framework to estimate and forecast market trends. Key to this was identifying credible proxies and economic drivers to enable rigorous forecasting and risk assessment.
Solution
Working closely with the client, we identified likely demand drivers and constructed a bespoke econometric model. Correlation analysis revealed a strong relationship between home security subscriptions and indicators such as home sales, real household disposable income, and consumer electronics affordability. Our model explained 92% of the variation in new quarterly subscribers. We then applied our proprietary macroeconomic forecasts to estimate demand over the next five years, including two alternative economic scenarios to map potential risks. Deliverables included a 50-page PowerPoint report detailing methodology, assumptions, model results, and insights.
Detailed Results
Our analysis equipped the client with a predictive tool to guide business planning. They continue to monitor key economic indicators from the model to track market movements and inform strategic decisions with confidence.
