The widespread adoption of the smart (connected) home is getting tantalizingly nearer. So it’s not surprising that the competition is circling as more companies look at how to exploit what could be a potentially massive market.
Big players such as Google and Apple have already declared their intention to carve out share through acquisition and technological partnerships, while Samsung and other entrants are taking their first tentative steps.
It’s true that the concept is not yet mainstream. However, consumer appetite for managing homes, including heating, security, entertainment systems and household appliances, is growing. Our 2014 study showed that more than three-quarters of consumers are keen on the idea of living in a fully-connected, smart home.
So what is holding them back from making that final leap? Our latest white paper uncovers six possible hurdles to be overcome:
The infrastructure must be in place. This is all about having access to superfast broadband. In many developed markets it already exists, with reports suggesting that in the UK, for example, almost 80% of people can get fast speeds ― if they pay for it. But the reality is somewhat different, with regular complaints from rural areas about service. This could hamper adoption.
Security concerns have to be allayed. Trust that systems are secure will play a big role. If the benefits are compelling enough and there is no evidence of security failures, consumers might be prepared to take a chance on the technology. Companies need to think carefully about how they handle this sensitive discussion.
Privacy could be a key issue. Consumers are far more sophisticated about company use of their personal data and less worried than headlines might suggest. The willingness with which many have embraced the idea of smart meters is indicative of that. But, as smart home technology becomes more ubiquitous, companies that step over the line and either invade personal space or try to sell to consumers on the basis of captured data will be quickly punished.
Full integration should be the goal. Achieving the real gains of a smart home will stem from having a fully-integrated system. But this usually demands a significant and long-term investment of the sort only those owning their own homes will be tempted to make. So suppliers should think about how they can attract the growing numbers of ‘Generation Rent’, those aged between 25-40, who are keen on the technology but worry about the investment. More flexibility could be the answer.
Understand your audience. Potential suppliers will need to develop more sophisticated strategies since consumers are at different stages in terms of acceptance of the various products and services. Our 2014 UK study uncovered some interesting differences. For example, energy meters are the most popular function currently, with almost 85% in favour of technology which can offer increased control over energy usage and costs. Perhaps more surprisingly, a considerable 64% liked the concept of home health monitoring. Nor should age be discounted: almost 75% of the Millennial generation (aged 18-34) would keenly embrace the concept of devices monitoring blood sugar levels or heart condition.
Communicate clearly. Companies have to make sure that consumers understand just how the technology fits into and benefits their lives. If they fail to make this plain or, worse, suggest that any significant behavioral change is necessary, the pace of the market will be slow. Clumsy or heavy-handed selling will also work against take-up.
The conclusion? To succeed in this market, companies will not only have to get the technology right but give consumers convincing reasons to make what could be a substantial investment in their homes.