Smart Home Industry Adapting and Evolving to Address Consumer Needs
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NEWS
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CES 2024, the annual consumer trade association’s international event in Las Vegas, was 15% larger than the previous year with more than 135,000 attendees and 4,300 exhibitors, including 1,400 startups from around the world. Smart home products are making a strategic shift to focus on energy efficiency, automation, and connectivity to increase adoption by serving the “middle market,” while demonstrating device use cases through visualization and control.
Tapping into the "Middle Market" to Scale Mass Adoption
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IMPACT
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On the show floor at CES 2024, the definition of “smart home” was transitioning from a novelty to mass adoption. The “middle market” refers to the class of buyers who have been poorly underserved by the smart home industry, and who are not Do It Yourself (DIY) technology enthusiasts or premium luxury home buyers willing to pay a hefty price for services. Consumers are purchasing products that offer enhanced security, time saving, convenience, utility bills, and enhanced overall wellbeing. Solution providers are using a multifaceted approach to attract homeowners and increase adoption, be it partnering with builders for new builds or existing energy and water providers to raise awareness, prove use cases, and ease installation. As the market opens, integrators are diversifying the traditional portfolio of two competing categories—DIY and professionally installed—by providing an affordable service model with a subscription fee to include installation, system upgrades, maintenance, and support.
Key solutions at the latest show include:
- Oliver IQ: This new “Smart Home-as-a-Service” subscription model was launched, providing device integration, and unlimited online and in-home support and maintenance through a user-friendly app to automate and control the entire spectrum of smart home devices.
- Multifunctionality was demonstrated through FreePower’s embedded charging countertops, Govee’s AI-powered lighting solution with CogniGlow, as well as a solution with integrated Bluetooth® speakers that unlocks new home entertainment experiences.
- Resideo: This spin-off from Honeywell provides a suite of smart home solutions to function as the nerve center of the home, ranging from security, safety, energy saving, and maintenance to leak detection with proven cost reduction for operating in the home and reducing homeowner expenses.
- Samsung SmartThings: The “Map view feature” was unveiled, which is designed to streamline home management through integrating and visualizing connected devices on the actual floor plans into its interface.
Additionally, global associations for Matter, Zigbee, and smart homes are actively working on solutions to solve the pain points to increase adoption of smart homes globally. Critical pain points include increasing adoption, concerns about data privacy and consumer protection, and raising awareness for manufacturers and design teams about upcoming protocols and standards.
Consumers Shaping the Adoption of Smart Home Devices for the "Home of the Future"
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RECOMMENDATIONS
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The smart home industry is maturing and evolving to become a robust ecosystem focused on resource management, convenience, and security, increasing value for the customer and adoption. Vendors need to be agile, innovative, and flexible to bring value to the customer, while addressing their needs as listed below to transition to become the “home of the future”:
- Compatibility: Build a critical set of compatible devices that demonstrate end-to-end solutions and smart ecosystem compatibility, which will drive customer satisfaction and vendor stickiness.
- Data Analytics: Convenience is a key driver for smart home consumers. Vendors need to adopt Artificial Intelligence (AI), Machine Learning, and data analytics to enhance user experience and predictive actions without being intrusive.
- Data Privacy and Security: Prioritizing data privacy, security, and consumer trust will create business opportunities in new regions.
- Use Cases to Demonstrate Need in a Competitive Landscape: Consumers are becoming tech savvy and comparing product performance before purchasing solutions, so vendors need to prioritize customer engagement, and share use cases for upcoming products and services to keep them informed and expand their client base.
Additionally, suites of smart connected products with software services are gaining popularity with potential applications in the commercial building sector.
