The Internet of Things is best described as a global network of machine to machine connections. Gartner estimate over 5.0 billion devices connected globally growing to 25 billion by 2020. The growth in patents for IoT based technologies is more than 8 times average levels.
Within the IoT universe we have the connected world, the recording, sharing and analysing of data that can be used to enhance work, play and home environments. The potential prizes are huge. Global spending in this sector is forecast to exceed $1.7 trillion in 2017. Cisco has reported that IoT generated savings across public and private sectors is likely to exceed $19 trillion over the next decade.
Connected technologies have the potential to transform the sectors such as energy, transportation, healthcare, manufacturing, shopping and public service provision, the Connected Home is one subset of the broader IoT agenda that links many of these core industries.
The vision of a Connected Home is one where the energy using and generating devices are linked via a central communication platform and network. The consumer electronics space in this context covers not just AV and domestic appliances but also smart metering, local energy generation and storage, electric vehicles and personal health technologies. The connected world will monitor, control, command and share information across all connected devices through a central user interface. This UI can take many forms and is likely to be accessed via smart phones and tablets giving users access anytime anywhere.
GfK and techUK have launched a report on consumer attitudes to Connected/Smart Home products and services. The research shows that consumers are aware of and are attracted to the Smart Home concept. Half of people surveyed expect the Smart Home to have an impact on their lives soon, citing interest in Smart Home technology above Connected Cars, Wearable Technology, Smart Cities and Cloud Computing.
Home Security, Home Environment, Health, Appliances and Entertainment are all seen as key benefits. The barriers to adoption were rated at a lower level than the benefits. Cost, personal privacy breaches, a lack of knowledge about what products and services are available and a lack of interoperability between different devices and systems were highlighted as the major concerns. Two thirds of respondents expect devices supplied by different manufacturers to be able to communicate with other, suggesting that vertical siloed solutions are less likely to be favoured.
In terms of payment models, 67% like the idea of a single upfront payment with no recurring fee, 45% were receptive to a subscription model in which the hardware is provided as part of the deal and 30% showed interest in a mix between an upfront payment and a recurring fee.
We also asked consumers from whom they might buy these services. High street and online electrical retailers and consumer electronics manufacturers were the most commonly mentioned, followed by utility, telecoms and financial services providers. Consumers, whilst still viewing ‘traditional’ channels as important are more inclined to consider other routes of supply and this is a stark reminder of the constant challenges that independent electrical retailers face to remain relevant in an increasingly fragmented market place.
This research, and similar research by others, confirms that consumers have both an interest and an awareness of Smart Home technologies, understand the benefits, see it as worth paying for and are aware of how to buy into the proposition. It does, however, highlight a lack of clarity over just what is available and how consumers can be sure that a purchase made today will still be relevant and compatible tomorrow.
What I hear from Independent retailers is concerns regarding whether now is the right time to get into the connected/ smart home, concerns whether the proposition is relevant to their customers, and concerns whether they can gain a return on the investment or find the space in store to demonstrate the proposition. Yes, change creates risk, but so does standing still and we exist in an industry where the only constant has always been change. Those that stood still are no longer here to defend their entrenched positions.
Don’t fear or fight the future, your future, embrace the connected world, it’s the smart thing to do.