Getting Smart

 
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Technology is starting to take over our homes.

Currently, 25% of UK households use Smart home technology, compared to over 30% for the US and Scandinavia.  UK penetration, however, is expected to increase to c.45% by 2024, when 12.6m households in the UK are forecast to be Smart.

The Smart home market consists of appliances for security, control and connectivity, home entertainment, comfort & lighting and energy management. The global market for Smart home tech is expected to reach between $112.8bn and $151.4bn by 2024, at a CAGR of over 10%, with the UK market growing at a CAGR of 12.7% to $7.5bn in 2024.

Given the relative immaturity of the market, players in smart home tech are diverse and include start-ups such as Sweepr, Flo and Wyze, digital giants (such as Google's parent Alphabet, Apple and Amazon), tech giants (LG, Sony, Siemens), specialists in HVAC, security and manufacturing (e.g. Johnson Controls, Lutron), as well as traditional home players such as Ikea.

However, the Smart home market is no longer just for early adopters. Despite higher penetration in younger and more tech-savvy users, Smart home tech is becoming mass market as focus shifts from `gadgets' to more widely relatable `smart homeware', taking away a key barrier to purchase for less tech savvy users. Ikea's push with Smart speakers and blinds and investment in its Home Smart area, as well as non-tech or home websites like Lufthansa's Worldshop, which lists 67 products in the category, are indicators that the market is entering the mainstream.

Consumers are now making purchases driven by genuine consumer needs:

  • convenience and comfort

  • energy efficiency

  • safety and access control

  • entertainment

  • the possibility of adding value to your home

​Of course, there are challenges to the Smart home tech market, with difficulties in communicating the complexity of the value proposition to consumers; connectivity / compatibility between platforms, providers and existing infrastructure; limited brand loyalty and high price points; as well as concerns over security breaches. 

However, as technology drives cost down, Smart home devices will become more commonplace. This will in turn aid consumer understanding and convince technophobes of the benefits.

Christina Roseler

Image courtesy of Trusty Joe

 
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