The Evolution of the Smart Home Sector During the COVID-19 Crisis, New Findings from Futuresource
COVID has caused many to spend more time indoors – with being forced to work and entertain ourselves at home far beyond what we are used to.
This triggered a surge in TV sales and accelerated a spiraling demand for subscriptions streaming services.
Consumers have also invested in a variety of home improvements – redecorating rooms and overall improving living spaces.
COVID has of course caused so many of us to spend more time indoors – we have been forced to work and entertain ourselves at home far beyond what we are used to. This triggered a surge in TV sales and accelerated a spiraling demand for subscriptions such as Netflix and Disney Plus. Similarly, consumers have also invested in a variety of other home improvements – from redecorating rooms and buying new furniture to improving their garden space.
Simon Forrest, Futuresource Consulting
The Rise in Fire Detectors and Lighting
While all areas of the Smart home sector have seen an increase, with it being a relatively new market, some have fared better than others as a result of the lockdown. Detectors and lighting have been positively influenced, with consumers appearing to have found a greater need to protect their families against possible disasters, such as fires or smoke, as the result of spending more time at home. Meanwhile householders have invested in Smart Lighting in order to enjoy its benefits both indoors and within the garden. Smart Home vendors, such as Signify, capitalized on this by extending their range of products suitable for outdoor use.
Meanwhile security devices such as smart locks and cameras would likely have performed better if people were spending less time at home. That said, households forming “support bubbles” may have elected to install cameras to monitor properties left empty throughout the duration of “Stay at home” restrictions, whereas they would not have done so previously. In addition, those unable to visit second homes or holiday properties have likely further invested in Smart Security solutions.
The Benefits of Smart Home in a Post-Covid World
When the pandemic recedes, we will of course have to adapt to a new normal. It is highly likely that we will spend more time in our homes than we did before the pandemic, as a result of working from home more than we did pre-COVID. As time goes by, however, we do expect to return to old ways in terms of leaving home for recreational purposes – for sports, leisure, holidays etc. This will no doubt play into the use case of people monitoring their homes remotely – for reasons of security and energy efficiency. It is very likely that hygiene issues will be higher priority in consumers’ minds, leading to greater demand for air quality monitoring and touch-free controls. And the perennial key drivers for Smart Home adoption – such as convenience, security and energy saving, will continue to exert their influence.
Consumer Purchasing and Pre-Purchase Education
Purchasing habits were interrupted in 2020, with much of physical retail shut for lengthy periods and consumers therefore relying much more on online reviews to buy over the internet. The next Futuresource survey of Smart home device owners (due in Q2) will reveal whether people are satisfied with their purchases. Futuresource believe that well-informed advice at retail could help pilot the consumer through the complexities of choosing devices and the differing ecosystems, to ensure that they invest in products that will do what they require, in a way they find both simple and effective.
Smart Tech Enabling Independence
One area of particularly interest is the potential for Smart Home to enable people to live independently, whilst being adequately monitored by their loved ones. The pandemic has highlighted how technology can help people stay in touch with one another and this will no doubt feed into the idea of remote monitoring. Simple smart devices such as doorbells, cameras, lighting and motion sensors will increasingly be adopted in a bid to support family members and friends remotely. Behavioral analytics, driven by AI, enables smart home devices to identify changes in normal patterns of usage, a potential early sign that something may be amiss. Additionally, those who have restricted mobility within their home have much to gain from using devices which enable them to control the devices in their home using voice commands.
On the Smart Home Horizon
Smart Home is still a relatively disjointed concept for most consumers. They might buy a Smart Speaker here and a Smart Camera there, perhaps an Amazon Ring doorbell. However, unless the owner has planned ahead, they will often find that their devices do not communicate with one another. This will often be because they are from different brands using different communications protocols. However, these issues are gradually receding and Futuresource believes that the bewildering range of brands will gradually shake down to a few major players, making the choices clearer and enabling those who buy smart home devices at retail to have a far more coherent experience in their home.
Diversification of the Smart Brand Landscape
There are distinct moves towards diversification, with leading brands creating a portfolio of connected products, each of which are designed to work together and attract consumers to invest in vendor-specific ecosystems. Product support becomes an expanding problem: these products are not “sell and forget”; there are challenges in maintaining software upgrades and ensuring lifetime value for Smart Home devices already in the market. However, finding the optimum moment to discontinue support for legacy devices without alienating customers or weakening brand value is a delicate proposition. To better serve their customers, we expect to see leading consumer brands refine their own smartphone and tablet apps to widen their appeal in this market. The important distinction here is that apps are no longer tied to specific products and instead are linked to the wider ecosystem. Whilst this approach isn’t unique, it is becoming more common, and this is enabling CE companies to integrate more tightly into the Smart Home and deliver an experience to customers that is far more influential than presenting themselves as a disjointed brand across individual devices.
The Age of AI is Upon Us
In terms of technologies, AI is now being used to optimize energy consumption and improve efficiency in the context of the Smart Home, as a key element in AIoT – the combination of AI and the Internet of Things. This is entirely plausible although it’s unclear on the efficacy of this approach across disparate Smart Home ecosystems, only loosely connected today via isolated apps and separate IoT hubs. Nevertheless, the Consumer Electronics industry recognizes the need for consensus on how to communicate between the differing mechanisms being employed by various companies, given how unlikely it is for consumers to purchase a full range of products from within a manufacturer’s own ecosystem.
Voice Control Beyond the Speaker
Voice control resides largely with Smart Speakers today, but we expect this to extend into other devices. The expansion of neural network technology in application processors is enabling swift migration of voice technology towards the edge, running on Smart Home devices themselves. We expect to see the introduction of domain-specific assistants, presenting alternative task-centric voice solutions. Running entirely on a device, with no requirement for cloud connectivity, these have a wide phraseology mapped onto a smaller set of intents targeted towards specific applications. There will be optimization of voice components, enabling tighter integration with edge-based AI, and enriched natural language processing. This is decreasing latency in responses and further increasing privacy, both of which are key elements in the strategy. Voice assistants will become proactive in anticipating user intent and this may be combined with intelligent interjection, where the assistant can join conversations and, theoretically, influence user thoughts and behavior. Ultimately, AI will extend beyond voice, leading to intelligent homes capable of more autonomy, helping to propel the industry forward beyond simple “command and control” functions.
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