Who will prevail in the emerging smart home market?
In our recent Internet of Things post, we discussed the power of IoT and how smart devices will drive forward the connected home movement from an energy perspective. As time goes on, more and more companies are entering this market with innovative and promising smart home technologies. Taking a step back to understand the broader influences of smart home technology helps to paint the picture of what tomorrow will look like. Even at the higher level it is all about energy: everything plugs in to create a consolidated home system with one-touch control. Apple HomeKit, Google Nest, Amazon Echo, and Samsung SmartThings are just a few of the big names competing in this space. Each has tried to differentiate their product by utilizing their strengths in their respective markets. Apple HomeKit is compatible with iOS and integrates with all Apple devices, from AppleTV to iPads to iPhones. Amazon Echo leverages its expansive group of Prime members by using existing consumer information to individualize recommendations. As time goes on, companies will continue to combine their product offerings to create a unified home system for the modern consumer.
Four Important Customer Considerations
At this point, most companies have a good idea of how their product compares to the competition. Nonetheless, these industry leaders must think about the consumer during product generation and development, not just make something “new” or “different”. Four key characteristics of the ideal smart home product are convenience, value, security, and potential for future improvements.
- Convenience – it is the core characteristic of today’s products, especially with smartphone connectivity. According to the Pew Research Center, almost two-thirds of Americans are smartphone owners. Clearly, new technologies need to be readily available and easy to use on smartphones or else consumers will not adopt it. Additionally, devices must be easily integrated with smartphone applications and other existing home assets so consumers can utilize a centralized, streamlined network of connected devices.
- Value – smart home products must provide value to consumers. Technologies should have useful features that satisfy a latent consumer need or desire. Since consumers front the initial cost of the product, they must recognize its value and be motivated to invest in the technology.
- Security – consumer information must be protected. In today’s world, consumers are wary about who can access their data and personal information. Smart home devices that are too futuristic could be viewed as overly invasive by the average consumer. Products need to determine the balance between collecting important customer data, like consumption habits and user preferences, without encroaching upon consumer privacy.
- Potential – products must have room for innovation and growth. For example, as Amazon continues to expand and refine the Echo, they can incorporate home appliances into their product offering. The Echo could eventually build grocery lists and automatically order food via AmazonFresh. To take it a step further, Amazon could utilize refrigeration devices to monitor food levels and automatically alert AmazonFresh to order food when supply levels are low. These examples are merely ideas but Amazon’s strong platform and existing value proposition could benefit their development in the smart home market.
Google’s Works With Nest campaign shows the power of partnerships
Google’s Works With Nest campaign, which stresses cooperation with other smart home device providers, encompasses all of the above elements and creates a collaborative smart home vision. Instead of trying to develop an array of products for the smart home, Nest aims to partner with existing providers, such as Whirlpool and Mercedes-Benz, to automate different aspects of everyday life. In their promotional video, company executives explain the existing interconnected Nest network and express their intent to expand offerings to increase overall connectivity in the near future. Works With Nest succeeds handily in the future potential category, where it has the opportunity to build a significant device network and encourage other companies to join the ever-expanding network. From there, consumers will be more inclined to buy products within the assortment of Nest network products to build their “thoughtful home.”
Power at your Fingertips
Consumers, like businesses, are still navigating the relatively new smart home market. Nest, for example, began with the simple task of offering an automatic thermostat which eventually evolved into a more responsive and programmable device. Like every new movement, the smart home movement will take time to conform to consumer needs and become highly valued by homeowners. A fully-connected smart home, however, could still exist in the near future. Companies continue to push the envelope on what is possible with new high-tech solutions. Consumers accelerate innovation with their constant thirst for new gadgets that streamline daily tasks and make life easier. If smart home devices continue to consider customer preferences and consumer needs, people will embrace the all-encompassing connected home – where everything is controlled by the touch of a button.