This report illustrates that, whilst the appeal of connected home products has stalled since 2017, consumers are continuing to purchase devices.
The number of households with more than three products grew by more than a quarter over the last year. This growth is predominantly being driven by the smart entertainment sector with 20% of people finding these products extremely appealing.
Explaining the value
Significant barriers remain which prevent wider adoption of connected home products. By far the greatest of these is the value that consumers attribute to the connected home products and services. Clearly, industry needs to do a far better job of conveying the benefits of the connected home.
For us, the benefits are clear; greater control over our most personal environments, cost savings, and that most valuable of commodities, peace of mind. But we do need to develop compelling examples of how the connected home will deliver these and find new ways to educate and communicate to consumers – be that digitally or through more innovative offerings in brick-and-mortar stores.
In addition to finding ways to demonstrate value we must also take steps to address other concerns which tend to revolve around privacy and security. The recent introduction of the General Data Protection Regulation (GDPR) puts in place a proportionate framework for personal data but there may be additional lessons to be learned from work being undertaken by Sustainability First and the Centre for Sustainable Energy on smart meter energy data.
Regardless, it is understandable that consumers have concerns about how data from their homes is used. We need to find a way of communicating this with them.
The rush to market for some connected home products has clearly led to cyber security being relegated as an afterthought in some instances. techUK has supported Government in its efforts to develop a code of practice for retailers, manufacturers and service providers. This helps embed the key concept of Secure by Design into consumer facing IoT products from the get go and should drive out the worst practices in the market.
Recommendation one: Industry should work towards implementing the DCMS Secure by Design Code of Practice. This is both the right thing to do and is necessary if we are to reach the full potential that the connected home can deliver.
Sparks of a revolution
On current trends, the market appears to be one of evolution rather than revolution. There are, however, three interventions which may change this.
The first is from within the market; smart speakers and assistants. Their ownership has doubled in the last year. We will continue to monitor both their take-up as well as their impact as a potential gateway product – ownership of such a product significantly increases the likelihood of ownership of other devices. Next year’s report will address whether this trend continues.
Second, an external intervention can be found in the form of smart metering. 89% of people with smart meters have made a change in their behaviour and interestingly 80% were satisfied with their installation – a high proportion when you consider the work involved. This can be attributed to the high levels of training these engineers have had and demonstrates that there is value in offerings outside of the plug and play approach. Smart meter ownership is also linked to additional smart energy products, acting as a narrower gateway product than smart speakers and assistants but one that is still significant.
The third potential intervention is the take-up of electric vehicles (EVs). Not only will this require smart charging from an energy network perspective but a third of drivers would be more willing to purchase an EV if they could utilise smart charging.
Time of use tariffs will clearly be key to encouraging consumer utilisation of smart charging and these will largely depend on smart metering functionality.
Recommendation two: Government should continue to prioritise the smart meter programme and ensure that their full functionality is maximised. Our report next year will focus on whether EVs are having an impact on the connected home market, particularly if we start to see energy-as-a-service offerings which may change consumers’ behaviour and expectations in other connected home segments.
techUK will continue to work with industry, Government and stakeholders (such as housing associations and property developers) to ensure that the connected home market in the UK is both an attractive one in which to test, develop and launch products as well as ensuring that it delivers value and benefits to consumers.
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