The Future of Smart Devices and the Connected Home
Insights from PwC’s latest report, “Smart home, seamless life: Unlocking a culture of convenience”
Our new report, “Smart home, seamless life: Unlocking a culture of convenience” explores views on smart devices and the connected home. As the latest publication in PwC’s Consumer Intelligence Series (CIS), the report gauges sentiment from 1,000 consumers via an online survey and focus groups about the everyday objects and devices we use that connect to the internet and each other.
The smart of today vs. the smart of tomorrow
Imagine waking to a morning alarm clock that simultaneously triggers your coffee pot to start brewing, tells the tiles in your bathroom to heat and your car’s windshield to defrost because the temperature outside has dropped below 40.
With the possibility and promise surrounding IoT and connected life, PwC asked consumers how they feel about the increasingly connected home and their readiness to take the leap into a connected life.
Smart home adoption has been slow to gain large-scale traction among consumers.
Though consumer interest continues to increase, it lies mainly with a select handful of individual smart devices rather than with a true connected home consisting of multiple smart devices working together.
The current ecosystems of intelligent devices are short-term solutions in what is bound to be a long game that will require integrating disparate devices into a cohesive whole — because there is a significant difference between consumers adopting individual devices (e.g., a smart thermostat) and consumers buying into a connected life.
Therein lies the disconnect — companies are furiously working to create their own ‘walled garden’ home solutions while consumers are only now coming to terms with smart home devices. Offering a connected network of smart devices is a unique value proposition the ramifications of which consumers are only just beginning to comprehend.
For now, companies have to decide between re-positioning their offerings to deliver superior value in a sea of standalone smart devices or finding ways to interest consumers in larger (and more expensive) whole home solutions.
While consumers are cautiously dipping their toes in the IoT pool, they are doing so largely without regard for holistic integration. So, as companies continue the push toward larger IoT ecosystems, customers remain hesitant to go “all in” until they see more.
What motivates the smart home consumer of tomorrow?
The data we collected suggests that for consumers who are not current smart-device users, the motivation to buy converges around four main themes: savings, safety, convenience, and control.
Consumers want familiarity
With IoT, familiarity doesn’t breed contempt. As knowledge of, and comfort with, smart home devices continues to increase, customers will no longer be daunted by them. There remains immense room for adoption — only 26% of internet users surveyed by PwC own a smart home device. What’s holding back non-users — prices and security concerns.
Consumers want to save money
Money’s influence on the smart home market is somewhat of a quandary. On one hand, price represents the number one purchase inhibitor among non-users; and yet, the prospect of saving money represents the number one purchase motivator among non-users.
Among those US internet users we surveyed who are non-adopters, 42% listed cost as the primary reason holding them back. And yet, 50% said the ability for a device to save them money on house bills would strongly influence their decision to make a future purchase.
To counteract sticker shock, flexibility options like a payment plan can help ease in consumers, as will the eventual drop in price that comes with greater market presence and increased consumer familiarity. And as we transition into a more saturated market, adoption barriers will pivot from price to complexity and lack of understanding.
Consumers want security
Security, too, offers consumers reasons to adopt and reasons to shy away from connected home technology. The security and privacy of personal data is a notable concern among consumers, for both young and old alike.
Interestingly, though, the source of the threat varies across generations. The younger consumers we spoke to indicated they are worried about the government and/or companies tracking their behavior, while our older respondents worry they’ll become victims of hacking/cyber-crime.
Overall, however, when the smart home device in question provides a service of great enough value, security concerns among all ages diminish.
Furthermore, the prospect of a more secure home and personal security is a strong inducement for purchase — 26% of consumers said they’d spend $200+ on a product that increases the safety of their home. In fact, it’s the smart home benefit with the highest price tolerance among consumers.
The wild card: aftermarket applications
IoT companies may be selling their entry point products as ‘loss leaders’ — banking on consumers willing to spend on additional services and features after purchase. Subscriptions and upgrades to smart home devices with enhanced security features top the list.
So what’s the future of smart devices and the connected home?
The smart home promise remains quite a ways from where we are today, living with a hodge-podge of smart devices that, for the most part, don’t work in concert with one another.
A single smart device by itself actually isn’t that smart — it’s when that device speaks to and correlates inputs from other in-home devices to make data-driven decisions that we reach the promise of IoT. Interoperability among all these smart devices can truly create a smart home and elevate the consumer experience to a place of substantial added value.
So, what will it take to create fully connected environments that graduate from individual smart devices to seamless home connectivity and smart living? The short answer is time. Time for people to get comfortable with the technology, with the costs and time for the technology itself to become better by achieving interoperability.
