Where’s the market now?
In the four years that GfK has been tracking consumer familiarity with „smart home“, this category – along with mobile payments and wearables - has seen consumer engagment grow to mass-market levels. Today, 4 in 5 Britons say they know at least a little about smart home technology. Over the same period, 3D printing and smart cities have somewhat dropped off the radar for consumers, while familiarity with some other technologies has stagnated. Cloud computing is now an invisible enabler of consumer-facing services and we are still waiting for driverless cars to arrive, despite recent revival in news headlines.
Interviews with UK consumers show two-thirds now own at least one smart home product: that truly is mass-market adoption. Even if we exclude people who only own smart TVs or smartwatches, we still have 47% of UK consumers with smart home devices.
The strong growth of smart speakers over the last few years (7% ownership in 2017, to 29% in 2020) has made these the poster child of the connected home. However, when it comes using smart speakers to control other devices at home, less than half of owners are doing this. We are more likely to ask Alexa to play music, give us the news or weather, and tell us a joke than to switch on the lights or turn down the thermostat.
GfK’s point of sales market intelligence shows strong growth in purchases of smart and connected devices for the home. The year to March 2020 saw more than 17 million devices sold through consumer channels in Great Britain. This brings total sales since the start of 2015 to more than 70 million – approximately 2.6 devices for every household. And the value of sales now exceeds £3.5 billion annually.
Barriers to overcome to drive further adoption
Interest in buying connected security and energy management devices (like smart lights, thermostats, and door bells/cameras) is growing, but there is some reluctance to pay more for the benefits that smart or connected products bring in these categories. The onus on the industry is to shorten replacement and upgrade cycles, to generate value.
This, in turn, highlights the need to remove concerns that consumers have round the ease of use and the interoperabilty of connected home devices (as well as of the services that enable them), in order to drive wider uptake.
The essence of the smart home is the interconnection of multiple devices – and the ability of some of those devices to monitor or control others. True smart homes are not collections of smart devices, but of connected devices plugging in to a few smart hub devices – each of which is, in turn, connecting to the broadband router. A smart home is like an octopus – with many tentacles and multiple brains!
Promoting adoption of the more peripheral devices – such as those that provide enhanced home security, or which enable greater energy efficiency - requires consumers to be confident that they will be able easily to plug new devices into their home ecosystem and reap the benefits.
Manufacturers and retailers will find it helpful to have a clear view of the different “smart” and “connected” layers within smart homes. They also need to remember that many smart devices are not actually very smart – so the challenge is to make them sexy enough to entice purchasers. That can be done by focusing your marketing around how products overcome any consumer concerns about smart home complexity as well as core benefits.
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