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The smart home market: The truth behind the hype

No manufacturer, utility company, global technology provider or retailer wants to miss out on the opportunities offered by the smart home. With no shortage of products and services being brought to market, the future of the smart home is bright – or is it?

In reality, the overwhelming choice of disparate smart home offerings has people confused – as we discovered in our global study of 7,000 consumers in seven markets. So what is it that key players need to know if the smart home opportunity is to realize its full potential?

What consumers know and expect

Familiarity with “smart home” as a term is high, but a deeper understanding of what it is, how it works and how it meets particular needs is generally limited among consumers. The fragmented nature of the market, and the lack of a “hero” product to help drive adoption, does little to aid consumer understanding. There is a real opportunity now for brands that bring order to the market and help people to make sense of what the smart home is by clearly communicating its benefits.

And if brands needed any reassurance that such investment in the smart home is worthwhile, they need look no further than its popularity among Leading Edge Consumers – the early adopters and indicators of future mass market take-up.

Where the market opportunities lie

With a lack of consumer knowledge currently a key barrier to smart home adoption, it makes sense that the smart home categories that appeal most to consumers globally – i.e. security and control, followed by energy and lighting – are widely understood. People know what they are and are familiar with their uses because there are already a number of products available in these areas. It also follows that all categories appeal least in markets where the smart home is an entirely new concept, and most in those where technology is being adopted at a rapid rate.

The main barrier to adoption

While the majority of consumers state they intend to adopt a smart home device in the next two years, our research and analysis indicates that the figure will be much lower in reality. There are a number of barriers to take-up that need to be overcome, but cost is the main one in each category for consumers globally.

In conclusion: How can the smart home best be delivered?

In summary, brands can best deliver the smart home by communicating how it will fit into consumers’ lives and benefit them, by providing the type of seamless user experience that today’s Connected Consumers have come to expect, and by understanding specific market needs.

Please email me at Ranjiv.Dale@gfk.com with your comments.

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