The Marketing Challenge for Smart Home Products

speakersIn reading all of the press releases out of the Consumer Electronics Show you would think that all of our homes are going to get flooded with smart devices in the next year or two. There is a huge range of devices being shown there that have at least some connectivity and that can be categorized as smart devices.

One has to wonder how much the American public is really ready for smart home devices. A survey late last year by the Demand Institute showed that there is still a relatively low interest in smart homes by the general public. The survey showed that 36% of the public was willing to incorporate smart technology into their homes and but that only 22% thought that smart home technology was of any real importance. This survey estimated that about 20% of homes already have some sort of smart home device.

The trouble with a poll on this topic is that you have to wonder how much understanding a lot of people have about the question. I would guess that the responses might be different if people were asked about specific applications – like using wireless speakers, a washer that senses the size of the load, or some similar device that many homes might already have. My guess is that interest in smart devices varies according to the type of device; people likely think differently about a smart thermostat versus a smart lightbulb versus a smart door lock, because each of these has a different value proposition – and a very different set of risks.

As you would expect, age plays a big factor in how open consumers are to smart home devices. 53% of those under 34 are open to the idea of smart homes while less than 20% of those over 65 are. And this perhaps might be a good way to highlight the confusion of the general public on the topic because I’ve seen several other polls that show a large percentage of elderly people would be interested in smart devices that would allow them to stay in their homes to an older age. These would all be smart home devices and yet nobody is thinking of these devices when asked the question.

As might also be expected, renters, being statistically younger, are more open to the idea in general than homeowners – although the age of a given person looks to be more of the determining factor.

The specific smart application that got the most attention was a way to cut down on energy usage. 71% of homeowners said that they would be interested in something that could do that, which varies significantly from the responses for smart home devices in general. Again, another example showing that the public might not have a good picture of what the term smart home device really means.

This poll and similar polls showing the same sorts of results should be of value to companies who are in, or thinking of getting into, the smart home business. It’s obvious that one of your biggest challenges in that business is educating your customers about what you are selling and why they ought to spend money for your solution.

I think these polls suggest that you should be careful about how you label smart home products and that, at least for now, you don’t want to be selling a ‘smart home solution.” Rather, the polls suggest that you would do a lot better in selling specific solutions – energy management or security. People might be interested in those without even realizing that they are smart home solutions.

One good news about this and other recent polls is that a significantly large percentage of people say that they expect smart home technology to be widespread within the next five years. If they aren’t interested now their disinterest is likely due to not understanding what “smart home” means. But the average person, at least, can foresee the coming change in technology and that a large percentage of the devices we buy in the future might be smart devices.

2 thoughts on “The Marketing Challenge for Smart Home Products

  1. Dear Doug:
    Being a member of the middle-of-the-road set (older than age 34 and younger than 65), I still question the need for “smart” home appliances. I just do not see the need for such connectivity.
    Actually, considering how generally well-connected the under-34 demographic usually is these days, I find the 53% figure to be surprisingly low!! Again, most people out there (including ALMOST HALF OF THOSE ADULTS that never really knew the world prior to the Internet…) see a need/application for appliance connectivity.
    I do, however, wish that the manufacturers would concentrate less on connectivity and cheapening their product, and more with product quality and longevity. In discussions with other homeowners about their appliances, I hear people complaining about cheap parts and planned obsolescence… not “Gee, I wish my dishwasher could connect to other appliances, or its home office.”
    Besides, appliance connectivity to the manufacturer or a dealer, only invites connectivity from hackers — and I do not trust the manufacturers enough to care about my security to trust them to make connectivity of appliances a useful feature.

    As for the home energy application, people readily the application, again assuming the security issues are resolved. In the WDC area, my utility company — not known for its customer care or client awareness (in fact, the utility is quite tone deaf on this score…) — has done a good job educating the populace on the need for such connectivity.

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    • I’m with you on a lot of appliances. Our stove and oven are great examples of devices that are far more complicated than the ones of a few years ago, which seems to translate into expensive repair calls. I would take a good 20-year old gas stove over this monstrosity any time.

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