Smart Home in the Time of COVID-19
If the at-home economy is booming, why is the smart home not seeing proportional growth?
The Gap between Expectations and Reality
The ongoing pandemic has had a quite interesting impact on the usage of smart home devices and the voice experiences they deliver. For one, nearly all Americans were under stay-at-home orders in April and, while many states have since started to ease restrictions and gingerly reopen, millions of Asmmericans are still spending most of their time at home today. Naturally, one would think that the increased time at home, and the resulting boom in the so-called “at-home economy” would lead to a spiked interest and usage in smart home devices, especially smart speakers.
Similarly, voice-enabled devices can help minimize COVID-19 transmission from touching shared surfaces, and smart locks and connected video doorbells can ensure deliveries are received securely without face-to-face interactions. The benefits of using voice-enabled devices to access information and services are quite self-evident, and early reports do support such hypotheses. According to a report released in April by ABI Research, the pandemic is expected to push global voice control device shipments to grow by roughly 30% in 2020 compared to last year.
However, now that we are more than halfway into the year, the smart home space is only showing incremental growth with no significant breakthroughs in either use cases or wider adoption. Partly to blame is the aforementioned disruption in global manufacturing and distribution. A report by Omedia adjusted down its forecast for global smart home device shipments by nearly 90 million units following the global outbreak, and adoption of smart home devices among U.S. adults is only predicted to grow from 33% in 2019 to 39% in 2020, according to market research by Hub Research, indicating a growth rate that is at par with previous years. Given that COVID-19 has been a trend accelerator, it is truly curious that voice-enabled smart home devices have not been significantly accelerated despite obvious conditions in its favor.
To be fair, existing users are using their smart home devices more when stuck at home. Amazon reports that worldwide Amazon Alexa skill usage has increased by 65% between April and June. In the U.S. alone, 52% of voice assistant users say they use voice tech several times a day or nearly every day, compared to 46% before the outbreak, according to a report released in late April by NPR and Edison Research. But this report also underscores the stagnant reality of use cases for voice-enabled devices, as most usage cited is still limited to basic tasks such as playing music or checking the news. As long as use cases remain confined to native functionality, branded voice experiences will likely not get the audience they could theoretically reach via smart speakers and smartphones.
Possible Reasons Behind the Stagnation
Perhaps there is something to be said about pandemic-induced economic and psychological uncertainty that pushes smart home devices further down the priority list. After all, these are trying times that call for comfort and familiarity, not to learn a new domestic routine of barking orders to smart devices. Plus, a potential recession means saving discretionary spending for a rainy day rather than blowing it on gadgets. With so many pressing challenges for many to overcome, our priorities lie elsewhere, and there is simply not much mental capacity left for an average consumer to consider buying new gadgets and adopting new behaviors.
Going one step further, one could say that smart home devices are low in mindshare because the perceived value of smart home devices amongst average consumers is low, especially given most people don’t fully realize the transformative power of those devices. As previously mentioned, most smart speaker users are only used to carrying out basic tasks that could be easily accomplished on mobile devices, the perceived value remains low.
For example, video conferencing apps like Zoom have been the breakout stars of the quarantine era, and smart displays like Google Home Hub or even Facebook Portal should have seen accelerated adoption. In a bid to capitalize on its pandemic success, Zoom recently debuted its first hardware product: an “all-in-one home communications appliance” that will retail for $599. Putting aside that high pricing, there does not seem to be much of a demand for such a product. Instead of buying smart displays, we seem content to just use our phones and laptops for virtual hangouts, for the devices we have are more than adequate at fulfilling that function.
Another important factor to consider here is the limitation of time and development of new technologies. Sure, the past four months feels like we’ve been trapped inside forever. In reality, four months is not that long of a runway when it comes to developing new tech products and bringing them to market. It takes time for companies to retool their strategies and develop specific use cases that cater to the new consumer needs created or accelerated by the pandemic, not to mention that the upgrade cycles of major home appliances generally range from 10 to 15 years. Most people are not considering buying a smart fridge or a connected oven just because they are cooking at home more, especially when the perceived added value of a smart appliance remains low.
Before the pandemic, Amazon was focusing on expanding its Alexa-led smart home ecosystem beyond the home and onto the curbside and inside cars. Many of the use cases they set out to achieve are still relevant today, but Amazon’s priority is rightfully on its ecommerce operation at the moment. Google, in contrast, did host a “Hey Google” event focused on its smart home products, where it announced a series of minor improvements to Google Assistant. But, short of announcing any new hardware products, the Alphabet company only teased an updated Google Nest smart speaker when images of the product were leaked online.
Ultimately, smart home devices may have missed the boat on this round of accelerated tech adoption because its value proposition has not been clearly defined and properly communicated to the majority of consumers. However, looking ahead, the implications of pandemic recovery may change consumer behavior outside the home, which, in turn, could impact smart home adoptions, in the long run.
What Comes Next
In our Outlook 2020 report, we talked about how ambient computing technologies are set to lead the charge on transforming public spaces and usher in a new era of computer-human interactions. While most people have been avoiding public spaces since March, thus stifling some of the developments in this regard, it is not hard to see that, once we gingerly enter the recovery phase, top-of-mind concerns about hygiene, health, and safety may push technologies that enable or aid contactless interactions, such as voice commands and authentication, mobile payments, and contextual suggestions, up the priority list. (The one exception here is facial recognition, which has been losing momentum and facing regulatory challenges due to the discriminatory dangers of biased AI data and misuse by law enforcement.)
Interestingly, most of these technologies would better demonstrate the full potential of smart home devices in a public or a semi-public context, which could lead consumers to reconsider their interactions at home. Once the consumer behavior is formed outside the home, ostensibly out of hygiene concerns, they could be brought inside the house out of the common need for consistency and convenience. For example, once we get used to using voice commands to operate a public elevator or get cash from an ATM machine, we could be comfortable talking to our washing machines and ovens about what we need them to do.
Granted, the home environment is a different context than public spaces, and the aforementioned hindrances to smart home adoptions may persist, if not worsen, over the recovery phase. Nevertheless, adoption of ambient computing technologies in public spaces will flatten the learning curve by getting consumers comfortable with the kind of context-driven, hands-free interactions that underpin most smart home devices, which could help eliminate a major adoption barrier.
It may be somewhat ironic that the future of smart home development depends on the underlying technologies being adopted outside the home first, but the fallout of this pandemic has created a perfect environment for the ambient computing technologies to educate the general public on the use cases and user experiences they enable, and demonstrate their worth. For the smart home players, there is a real opportunity in taking this work-around strategy to try to boomerang their way back into consumers’ homes. Whether they will be able to seize that opportunity, however, is not guaranteed.
