How to Capitalize on the Smart Home Boom

  • Categories:

    Industry Trends, Marketing Insights

  • Date:

    January 10, 2018

How to Capitalize on the Smart Home Boom

Industry Trends, Marketing Insights

Smart home technology: it’s not science fiction, it’s the Internet of Things — and it’s real. If you work for a brand in the home or building category, you know the smart home market is in the middle of a rapid expansion. According to Statista, there were 33.2 million smart homes in 2017, and that number is expected to grow to 69.0 million by 2022. 

But right now, the smart home market is also extremely messy. If you want to succeed in this new, brash, connected world, it’s important to understand the lifecycle of smart home technology, how your brand fits into the picture, and the right time to get involved (hint: it might not be right now).

A definition might be the best place to start.

What is a smart home?

While almost 90 percent of Americans think smart home technology is valuable, few can define it. As of yet there is no universal definition for smart products or smart home products, though plenty of people have tried. For example, take the following definition from Coldwell Banker and CNET: 

A home that is equipped with network-connected products (i.e., “smart products,” connected via Wi-Fi, Bluetooth or similar protocols) for controlling, automating and optimizing functions such as temperature, lighting, security, safety or entertainment, either remotely by a phone, tablet, computer or a separate system within the home itself.

The home must have a smart security feature or a smart temperature feature in addition to a reliable internet connection. It then must include at least two features from a list of smart options, including appliances, entertainment, lighting, outdoor sensors, and safety detectors. 

How can you capitalize on the smart home boom?

  • Be patient. Remember when everyone and their mother had to have an app? Unfortunately for the brands that jumped with their eyes closed, consumers are fickle app users. In fact, smartphone users spend almost 80 percent of their time on their three favorite apps, and 96 percent of their time on their personal top 10 (Stastista). The apps that have a clear value proposition and are easy to use? Those are the ones that usually stick. The lesson here is that there’s nothing wrong with waiting for the first wave to end, particularly if you’re less than ready. Often, the best innovations aren’t the first products to market. Instead, they’re dreamed up by brands that observed the successes and failures of their competitors and came up with smart ways to make their version better.

“Boeing did not pioneer modern jet travel, nor Google the Internet search engine. Yet both companies are now industry leaders.” ~Northwestern University Kellogg School of Management 

  • Refuse the urge to do tech for tech’s sake. I can’t stress this one enough. Your smart product might be a really cool idea, but it has to have a meaningful value proposition. Otherwise, it won’t survive. Think about how your smart home innovations will make tasks more efficient, so that consumers can prioritize things that are meaningful to them and their family. How will these products fit in with the “new normal” when it comes to how families interact with smart home technology? 
  • Play to your strengths. Consider a desired feature like under cabinet lighting. If you’re a cabinet maker, innovate there. Picture cabinet lights that respond automatically when a person walks into the kitchen, or adjust the color temperature to complement the time of day. You could also help your customers with young kids eliminate the need for drawer pulls — by giving them touch-sensitive drawers that lock if the kids try to open them. Alternatively, you could make home chefs happy by integrating smart technology that tells them what spices are stocked in their spice cabinet.
  • Benefit consumers in a meaningful way. This is all about understanding how consumers live their lives. Today, our fundamental values aren’t that different from those of our parents and our parents’ parents. My parents aren’t early adopters, but they have a smart home. My dad spends a lot of time in the house, and he appreciates products that help make his life easier and more comfortable.
  • Leverage service to appeal to a service-oriented culture. There will always be new gadgets, but service is supreme. And the key to service is time. Time is a precious commodity for everyone, from single millennials to working mothers of three to retired boomers. Innovations like Amazon Dash shortcuts, Instacart grocery delivery and Le Tote Select personal styling succeed because they give consumers more than stocked pantries and closets — they give them time.
  • Future-proof your products — to an extent. Consumers don’t buy large appliances or refrigerators every day. If you manufacture these products, why invest in technology that will be obsolete long before your buyers are done with them? Personally, I don’t want a fridge that requires clunky software updates to function properly.
  • If you’re going to fail, fail cheaply. The people at Amazon are masters at this. They respond quickly when things aren’t working, and they’re set up to easily phase out products that don’t perform or sell to expectations.

What happens next? 

It’s all the rage now, but within 10 years, smart home technology will be part of the background, transformed into a life-changing concept we nonetheless take for granted. Here’s why:

  • Smart home products never had a defining moment to delineate two eras, like before and after smartphones. In the future, they’ll be more like hotel room security features. Do you remember when digital key cards replaced good old locks and keys? I don’t, either. The point is that nobody talks about that as a thing — it just happened, and we all got on board, and most of us don’t remember life without it.
  • Changes will be largely invisible, like the technology behind them. True smart homes change lives in a meaningful way, but because these changes occur within our own intimate environments, they’re easier to miss. Transitioning from a home with zero smart products to a fully automated, integrated smart home? That’s one thing. But most people will opt for a gradual approach. For example, a homeowner might start with an Amazon Echo and add products like a smart doorbell camera or smart lighting piecemeal, until one day, they have 10 connected products.
  • Integration will drive real innovation. I’m not talking about whole home automation, which has been around for a while but still needs a controls center, like Samsung’s SmartThings Hub. Instead, I think that in the future, we’ll start to see products communicate in a seamless way. This will make adoption easier for people who aren’t tech-savvy. (Remember, most consumers don’t want to be computer programmers.) It will also make smart home technology more adaptive to change.

It’s an exciting time for everyone in the home and building categories, but that’s exactly why we have to be careful. Don’t be one of those brands that rushes to fill the vacuum. Realistically, 90 percent of smart home technologies won’t stick long-term.  

Because being brave isn’t the same thing as being brash. 

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