According to recent Parks Associates research, consumers rank traditional safety and security capabilities high among their desired connected home features. Real-time and mobile notification capabilities have really enhanced traditional security features: smoke, gas and water leak detectors. Energy management features — monitoring electricity usage and automatically adjusting devices to minimize electricity usage — rank behind security features at this time.
According to recent Parks Associates research, consumers rank traditional safety and security capabilities high among their desired connected home features. Real-time and mobile notification capabilities have really enhanced traditional security features: smoke, gas and water leak detectors. Energy management features — monitoring electricity usage and automatically adjusting devices to minimize electricity usage — rank behind security features at this time.
Companies are recognizing this opportunity and formulating their own visions for the connected home, including scenarios for the caretaker, energy manager, security service and household mate. Each use case is perceived as a pathway to a stronger customer relationship.
When asked about specific devices and their associated price points, consumers rank security-related devices highest for home control devices they are likely to purchase, and they find lighting control modules and appliance switches less appealing than security and safety features when these are tested at $54 (€39.99) each. Predictably, appeal of specific use cases varies segment to segment and market to market as well. For example, energy management provides a strong entry case for a large segment in Denmark, where according to www.energy.eu, the residential cost for electricity is the highest in the European Union.
Connected products such as network cameras, thermostats, door locks and lighting controls have been on the market for the past few years. Approximately 5% of households in France, Germany, the UK and the US own at least 1 of these devices. The net promoter score for these early adopters is marginal, at 16%. Looking more closely at the net promoter score numbers, it becomes clear that perceived value expands with device volume. The more connected devices present in a home, the more likely the early adopter is to recommend them to their family and friends.
Security systems that include motion sensors, door and window sensors, and network cameras serve as an excellent base package of connected products. The sensors that are used to detect intrusion can also be used to determine occupancy or activity level. Those inputs can then be used to dramatically reduce energy consumption by setting back temperatures and turning off devices when the home is unoccupied.
Manufacturers are launching individual connected products, each with their own app. While these products are functional, the user experience is less than ideal, especially as multiple products enter the home. Integrating those individual products into a smart home platform expands the capabilities of the system and enhances the experience with the individual product. For instance, while manufacturers can sell electronic door locks and their associated apps separately, the user experience is drastically improved when the lock is integrated into a smart home platform and becomes part of a larger home control and security system.
Smart home platforms will, therefore, play a critical role in providing a seamless user experience. Successful platforms must be capable of integrating new products and their full feature sets, providing users with a complete and fully integrated experience. Platforms must be able to integrate these new devices, even if they use different home network technology. Given the huge amounts of data that are generated within the smart home, platforms must also be diligent and provide an elevated level of digital robustness and privacy protection.
In this market segment, trust and brand are highly important, especially in the early stages. Consumers prefer to do business with vendors that have a solid reputation in a specific industry, and brand helps simplify the complex decision process associated with buying first-generation products and services. Companies and brands with solid reputations as trusted caretakers of private information are best able to allay consumers' data privacy and security concerns.
Home safety and security products and services are well understood and accepted by consumers. Home security companies in Europe, for instance, can extend their daily interaction with the customer to include interactive services that enable consumers to use their smart-phones, tablets or computers to monitor and control the security system remotely. Extending the capability of security systems enhances the relationship with the consumer by increasing interaction with the system.
Home security companies are also well-positioned to lead in the broader market. Security companies already have an effective go-to-market model and service organization, which in many cases means large sales and service forces in the field. Just as in the States, the security channel can use its sales channel advantage to extend home controls beyond existing home security customers. Consumers who are already paying a recurring fee for security monitoring services are the ideal targets for home control features that add significant value through energy savings and convenience with only a minor incremental monthly cost.
Home controls are new to the market, and consumer awareness is low. In addition, the smart home has numerous value propositions but not a single killer app that fits into a 30-second sound bite and sells itself. A face-to-face sales approach is ideally suited to overcoming lack of consumer awareness by allowing consumers to interact with systems and ask questions. The sales agent can also explain in detail the many value propositions that systems deliver— adding home control components to the security system is a natural extension.