2021 Security Industry Business Climate: Codelocks

Feb. 1, 2021
Codelocks sees a changing definition of security along with continued demand.

Even as we move further away from 2020, we continue to see its effects, particularly in terms of access control in a post-pandemic world. Although there appears to be light at the end of the tunnel, COVID-19 should remain with us for some time.

Locksmith Ledger is publishing a series of articles that attempt to assess the 2021 business climate through the eyes of security industry manufacturers. We want to know how the companies are faring during these troubled times, how they assess the security industry at large and what locksmiths and security pros can do to take advantage of the situation.

Our latest interview in the series was conducted with Matt Welty, vice president, Americas of Codelocks.

What are the prospects for the security industry in 2021?

Certainly, the need for security isn’t going to decrease in 2021. The question really is how will security providers adapt to the market conditions that will be present in 2021 and what will be the main drivers in security acquisition decisions?

What do you foresee as the market conditions and main drivers in 2021?

The need for security is there, but it isn’t just keeping the bad guys out. It’s providing security for your personnel as well as your property. Companies are going to be challenged with providing security, which could be access control or could be health and cleanliness standards, and it goes beyond just the typical description of security.

In 2020, we experienced less need for access control of individuals on a daily basis, because many were sent to work from home or limited their time in an office. However, this increased the necessity to monitor and secure those facilities while still providing access when necessary for those who still go to them. Being able to remotely monitor and grant access is more important.

There will be more of that trend in 2021. Companies will continue to spend more money on security and those related aspects of it.

How much of a role do you expect COVID to play in that?

No matter what occurs on the COVID side of the equation, a lot of companies already adapted to smaller groups of people, more remote meetings and more technology.

One of the things I think will be interesting to see is with big corporate offices or office towers, how many companies go back to those types of environments versus stay away? Long term, if things get back to normal, people’s memories tend to be short, so in a couple of years, they’ll probably forget everything and go back to where it was. But certainly through 2021, we’re going to see the lingering effects of COVID.

What are the prospects for your company in 2021?

We anticipate continued steady growth, as we experienced in 2020.

What specifically are you doing that would provide that outlook?

We’re a very small player in the market. The market could even contract and we could still grow, because we have such a small percentage of the market.

We’re trying to stay focused on our niche, which is smaller stand-alone systems. Some of the things that I said earlier will help us continue to grow, because we’ve always fit into the market as offering innovative technology applications without all the bells and whistles and infrastructure. If somebody wants to add cost-effective almost-contactless access control to virtually any door in their facility or the perimeter, we can do that through our current products.

We have launched a bunch of products just in the past several months. Some of them are permutations of existing products, and some of them are brand-new platforms. Those all have legitimate places in the market, so that will help to increase our sales.

As far as products, what do you see as taking center stage in the next year as we move forward from the COVID crisis?

Products that provide contactless security and remote management will become more important. There also will be an increase in emphasis on the products that are touched having effective antimicrobial coatings, along with ease of cleaning.

How do Codelocks products fit into both demands?

Our smart products can be managed remotely without any connectivity via cellular or Wi-Fi. You can assign access rights. You can get audit trail information from the lock. We have an option to add Wi-Fi connectivity, which allows you to perform a few more features that you can’t without it. And then the lock itself, you can program in a user to use an app on their phone to unlock the lock or a prox credential to unlock the lock.

So, the only contact that would be required would be to grab the handle and open the door. Now there’s the new Clean by Codelocks coating, so if that handle was coated with Clean, you would have killed off all the microorganisms on it. It isn’t fully contactless.

We could take our smart technology, and it could be put in play with an auto door operator and things of that nature, which would make it contactless, but now you’re getting into a more expensive situation.

Speaking of Clean, how does it differ from other antimicrobial coatings out there?

Our coating is a titanium dioxide-based coating, and the other antimicrobial coatings on the market are mostly silver-ion-based. There are some copper items out there, too.

Titanium dioxide is activated by light; it’s a photocatalytic, so no moisture is needed. With the silver-ion items, there has to be enough humidity and moisture in the air for it to become active. Those products inhibit the growth of microorganisms, not viruses, so those microorganisms on there are still going to be on there. It just inhibits them from reproducing and continuing to grow. With titanium dioxide, it breaks down microorganisms into their basic compounds, and then they just get swept away.

It’s activated by light and a low ambient light. There might be an application — a dark room or something — where there’s not enough light, but all the applications we’re talking about have adequate light to activate the titanium dioxide.

It’s not a new item that hasn’t been out there. It’s been there a long time. We’re having some weathering testing done, but right now, we estimate it should last for at least 2 years, even with regular cleaning, even if somebody uses soap or chemicals.

It’ll be interesting to see how the market accepts it. There’s nothing proprietary with us [Clean by Codelocks uses LumaClean by USA Nanocoats], so if this is accepted, I’m sure the bigger companies will be offering it as well.

Let’s get back to 2020 for a bit. What did the industry learn about COVID that will propel it forward? What did your company learn from it?

Conditions in the market can change in an instant, and the industry has to remain nimble to respond to a market effect that wasn’t anticipated by anyone. We learned the value of a strong, loyal and flexible team, and we likely will continue to have more employees working remotely, which will give us more flexibility in where we have operations located.

What’s the benefit of “flexible locations”?

We’ve been able to stay operating despite shutdowns, and we can keep servicing our customers. I had a conversation with a large channel distributor that sells our product, and he appreciates the fact that all through COVID, our shipping times didn’t go out. We didn’t shut down. We just kept right on moving.

The first day when California back in March [2020] announced shutdowns, we were concerned, because if we can’t have people in our warehouse shipping every day, we’re dead. That’s our revenue. Thankfully, there were some loopholes and some exceptions that we were able to take advantage of. We have very good employees who are very loyal to the company and the customer who just kept right on going.

With multiple locations, you’re minimizing your risk. You’re spreading it out so no one jurisdiction or one country takes out your complete revenue.

Codelocks’ corporate headquarters is in the United Kingdom. What unique challenges does your company face that other companies that might have operations based only in the United States don’t have?

Even just managing inventories is a challenge. The smart features on our products are the same, but in Europe, they use a different mechanical platform for a lock than we use here in an ANSI type of setting. A smart lock sitting on the shelf in the U.K. and a smart lock on the shelf in our warehouse are not necessarily the exact same things, so we have to manage a lot of those things differently.

But we are privately held. That plays to our strength and ability to react quickly to things, to be able to focus on applications that customers come up with that nobody else will, because it isn’t big enough to be of interest to them.

The challenge of that strategy is because we’re special applications or niches, not every distributor or every locksmith is going to have a need for our product every single day. The trick is getting enough brand awareness in the market, so before they come across that application, getting them to remember, “Oh yeah. Codelocks has something I could use here.”

How do locksmiths take advantage of the changing business landscape we’re in?

Locksmiths have to be sure that they understand their customers’ current needs. It also will require locksmiths to increase their knowledge of things, such as cleaning and technology, even more.

What in particular should they know?

Understanding all the products that are out there. There are a lot of smart products on the market, and locksmiths have to not be afraid of that. I know there are some who don’t want to mess around technology, but, frankly, like it or not, that’s where most folks are going.

What they need to do is learn the different types of technologies. You need to know that not only are there smart locks, there are some that require a certain type of connection, and some that don’t.

Then, they really need to ask the customer enough questions to fully understand what the customer wants to accomplish. Locksmiths have to be adaptable, particularly now. Even your same customer that you dealt with for years, the needs that they would have had a year ago and the needs now might be completely different just based on how their business had to adapt, so the solution that you gave them last year very well might not be appropriate. Don’t just assume that because you’ve serviced them for 20 years, you know everything about them.

What’s Codelocks doing to help advance that knowledge?

We have a lot of training opportunities that we make available to distributors not only for their personnel, but also for their customers — locksmiths — to keep them up to speed and let them know about some of the alternatives. Our products aren’t going to fit every application they have, but it’s always amazing to me after they hear about the Smart Lock and some of that technology, they say, “Oh, wow. I’ve been looking for that.”

We’re trying to put more case studies and more examples on our website and use them in various formats to tell the story, so locksmiths know there are some things different from what they might have used that are available to them.