The “Smart” home is not new. It’s been in place in high end homes for more than two decades. What is new is that the advances in cloud computing, high speed Internet, and wireless connectivity including Wi-Fi have brought connected home devices to mass production and affordability, and thus adoption.
The early adopters are generally more tech savvy, so they have a greater ability to connect and manage a multitude of devices from multiple manufacturers.
Now the average consumer wants to take advantage of the myriad benefits smart home systems offer:
Recent reports show that in 2016 consumer adoption of connected home devices experienced a huge leap forward. IHS Markit estimates that 80 million smart home devices were purchased by consumers in 2016, a 64% increase over 2015. According to ‘2016: Year of the Smart Device’, a consumer survey commissioned by PlumChoice and the Z-Wave Alliance, 97% of consumers already know what a smart device is (versus 67% in 2015), while 79% report owning one or more. If we compare the numbers, it is clear that device adoption is on the rise and that consumer expectation about connected living tech is growing and evolving.
Most consumers getting on board are going via the fastest and easiest way, which is to simply buy one of the many point devices and gadgets that are readily available through retail channels. However, they quickly find themselves overwhelmed with devices in which they’ve invested quite a bit of money but are now simply collecting dust because they don’t know how to integrate them into a single system, and some are not compatible with each other.
According to PlumChoice’s research, “Consumers expect more help and support from the brands they’re buying from.” In fact, consumers’ decision to buy from a brand again is overwhelmingly influenced by the brand’s ability to provide the help they need to use and enjoy their products. More specifically, installation support is cited as a top need by 68% of consumers. As the report states, “This data presents smart device manufacturers, distributors and brands with an opportunity to become a true partner for consumers who need more information and help.”
The solution to consumers’ confusion is service providers offering a complete package: service, interoperability, continuity, products and support. Providing consumers with integrated smart home solutions is the biggest opportunity that service providers (SP) have had in years. Most of us do not have the expertise to buy various security and automation components and ensure that they all work together. The benefit of buying from a service provider is that they will give the customer a system that works, devices that are interoperable, and ensure that in the event of technical problems they will always have a single point of contact that will offer support.
Simply by offering the customer a system that works, service providers across industries can leverage existing consumer relationships to add a completely new and highly profitable line of business – the connected life.
Connected home technologies offer these market players a unique chance to further engage with their customers by enriching their offerings with a whole ecosystem of smart home devices and new long-term services based on data analytics.
Our next posts will reveal the potential IoT revenue profit waiting for service providers across verticals (insurance, telcos, security, utilities and healthcare).