Home 2.0: plugging into the future

The ‘connected home’ is a technology centric approach to home automation that has been long heralded by advocates, but in many respects has not yet reached the mainstream. This could be anything from thermostats that learn exactly how and when you like to heat your home, speakers that can be controlled by your smartphone or security cameras that can distinguish an intruders face from you own – the commonality is they are all connected to a network and make up what has been described as ‘the internet of things’.

Whilst the penetration of many these devices remains low, the increasing adoption of fibre broadband means more and more homes have the infrastructure to accommodate the devices which can transform a standard home into the Home of the Future. This, combined with increasing media spend from the likes of Sonos and British Gas Connected Homes (Hive), means that buzz is inexorably growing.  So are we on the cusp of a transformation in how homes are managed and run akin to the invention of the washing machine …?  Or is this another technological false dawn – anyone watched their 3D TV recently? Thought not.

Smart TVs and connected media devices have led the charge so far and introduced consumers to the benefits of connecting formerly ‘dumb’ devices to their routers – the explosion of Netflix in recent years is testament to this.  However other more prosaic home devices which have received the smart makeover such as thermostats, lights, plugs and security cameras present a huge growth opportunity for the likes of Hive, Nest, Tado and Honeywell – indeed the crowded marketplace and investment by the likes of Google (in purchasing Nest) demonstrates that many businesses are prepared to ‘bet the farm’ on the ‘connected home’ finally taking off.

Individual connected products are a difficult sell when viewed in isolation

However, these devices can be accused of providing solutions to problems that just don’t exist. And herein lies the dual pronged issue that confronts these brands: they face the uphill task of making the mundane captivating – convincing consumers that devices such as plugs, lights and alarms are no longer commodities but are premium devices with premium price points to match – and at the same time they need to sell a new category of devices to consumers who, understandably, often lack an understanding of the applications and potential of the technology they are being sold. A case in point is wi-fi itself, when it was introduced into homes it was sold as a way of getting rid of the network cables that ran to your PC – few would have imagined that wireless internet access would increasingly become the lifeblood of how many homes function.

The consumer motivation to buy home technology is very different from products like smartphones, TVs and computing devices i.e. technology where entertainment is a big draw. Home technology is about a different set of rational and functional needs such as saving time, saving money, taking control of the environment, and peace of mind. So in order for brands to persuade consumers to part with more of their money than traditional products there needs to be a step up in terms of how the benefits are explained.

Helping consumers understand the lifestyle benefits is key to increasing sales

Hive has recently launched additional services such as smart plugs and motion sensors, expanding its reach from just central heating to include home security – this expansion of its product portfolio is backed by the confidence that they can communicate to consumers that these devices can make your life easier not more complicated – automating your lights when you are out, turning the heating on before you get home – switching off a plug remotely because you forgot before leaving the house. All of these are simple and elegant ways of showing how this tech can make life incrementally easier for the consumer – but when you start adding up these small changes the impact it has on the lives of those who have invested wholeheartedly in the smart home can become quite significant.

However OEMs can also do more to show how the ‘connected home’ can become really interesting particularly when these products begin to communicate with each other either via hubs installed in the home or via web services such as IFTTT. These not only help to make home automation feel more seamless and ensure that the technology is working for you rather than you fighting against it, but they can also really bring to life unexpected benefits and use cases.  Nest, for example, combines controls for central heating, security and smoke alarms altogether in one app but via open web standards. Using a service such as IFTTT not only can Nest devices speak to each other but they can communicate with other devices you own. For instance, if your Nest camera detected an intruder it could set your Philips Hue lights to strobe and tell your Sonos to play some Thrash Metal at full blast – how’s that for peace of mind? Admittedly not everyone is going to do this but examples such as these can grab the imagination and act as a great showcase for the potential of the ‘connected home’.

But for now the media campaigns of  Nest and Hive are great at demonstrating the basics – how their products not only provide security and save money, but they also show how they fit in to consumer lifestyles to make things easier and hassle free – things which are crucial to getting the man on the street to opt in to new technology. So if they and other suppliers can continue to promote the benefits and explain in layman’s terms what the point of going smart means for your average consumer and can back this up with products that are simple to both use in isolation but easy to integrate with your other smart devices then the category will start to gain further momentum and from there will only go from strength to strength.

What the future looks like:

We are making two predictions about the future of this market:

  • Given the cautious nature of product developments from the big technology players, innovation is most likely to come from small companies or crowd-funded projects that find the right niche, which will then be bought up by the big brands to bring them to the mass market
  • Convergence will continue to be the driver of home technology improvements. Those companies that manage to become installed as hubs – via a core piece of tech such as thermostats, light bulbs and speakers will have a privileged position and are likely to become the tools that other brands will need to collaborate with to reach scale.