The rise of the automated home

Have you ever fancied installing technology to raise blinds or adjust temperatures automatically in your own home?

The home automation industry has seen several advances in recent years to the types of technology available and their application for creating “smart” homes. This, we are told, represents a great opportunity for construction and electrical contractors who stand to benefit from demand to install the technology.

From some reports, you’d think people were lining up around the block to automate their homes, so we wanted to find out the true story of the state of the market. Does it represent the flood of opportunity for contractors that some have anticipated?

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The rise of automated homes in the UK

First of all, let’s take a look at a few key UK statistics we’ve sourced from Statista:

  • Smart home market revenue amounted to US$1.9 billion for 2017
  • Revenue growth between 2017 and 2022 is expected to be at 23.6% annually, with revenue of US$5.56 billion expected in 2022.
  • Household penetration was at 14.9% for 2017 and is expected to reach 39.0% by 2022.

(Note: The image below shows you what is in and out of scope to produce these figures).

Source: Statista

If you thought that penetration figure of 39% sounded high for fully-automated smart homes, you’re right. This figure represents households which have some or all of the “in-scope” features of the report. It might be easier to look at from the perspective of the number of households total in the smart home market in the UK. For 2016, this was 1.12 million households, expected to rise to 6.26 million by 2021.

Most commonly, people are wanting smart technology for lighting, heating and security purposes. The most popular product recently has been smart plugs – devices that allow homeowners to remotely switch off the power.

From another perspective, there’s a sense that UK adoption of smart homes in particular has lagged from where pundits thought it would be. Deloitte figures show that the sale of smart home gadgetry remained relatively flat over the last couple of years, and companies selling “internet of things” devices have reportedly struggled with slow sales.

Are consumers going for smart home technology?

There’s mixed news when it comes to the adoption of smart home technology. Gartner conducted a survey across 10,000 consumers in the UK, US and Australia and found that there has not been widespread adoption outside of a certain category of people whom you could call “early adopters.”

They found that 10% of homes across the entire region surveyed had connected solutions, while three-quarters reported they were quite happy to manually set temperature and lighting. 58% even said they preferred each device to be independent from one another. Hmm, what’s going on here? This sounds like a much slower uptake, not the growing flood of eager consumers that the technology companies have hoped for.

One thing we could point to is that it costs a fair amount of money and takes a substantial amount of time to kit a home out as “smart.” How does that stack up against the value for the customer? Most of us are quite happy getting up to adjust the heat or to close our own blinds. For many customers, the idea of having to set up a whole lot of gadgetry, program it, then learn how to use it will seem like a lot of extra work.

Another factor that was examined in a recent study concerns security when it comes to devices that are part of the “internet of things” (IoT). The study found that 69% of UK and US consumers surveyed were either “very concerned” or “concerned” about the security of their personal data on IoT devices. There have also been safety concerns expressed: The idea of connecting a gas oven to the internet in order to detect whether it has accidentally been left on might be rooted in safety, but many people are hesitant at the thought of what might possibly go wrong.

On the other hand, there is a clear group of technology enthusiasts who are keen to wire up their homes for smart technology. Many in this group are part of the technology world themselves, while others are typical of the early adopter set. These are possibly part of the same group who would embrace wearable technology, although overall, this has failed to catch on with the general population.

In the UK, the largest group of smart home adopters is the over 55’s, although we note that this particular article doesn’t state whether only people who own their homes were surveyed (over 55’s are also the largest group of homeowners).

Source

Appealing to more consumers

Getting back to the Gartner study, one of their recommendations was that, while we are beginning to see people embrace connected home technology, providers of smart home tech need to push for wider adoption, beyond that “early adopter” crowd.

“If they are to successfully widen the appeal of the connected home, providers will need to identify what will really motivate current users to inspire additional purchases.” (Amanda Sabia, Principal Research Analyst, Gartner).

This becomes about value proposition – how can we communicate that this technology will solve a real problem that the homeowner has? This goes beyond “oh look, I can sit on my couch and control things with a button.” As we’ve noted, most people are happy to get up and control their devices separately.

Focus on “real” problems that IoT can solve to appeal to more consumers Click To Tweet

What might some of those “real” problems be? Here are a few thoughts from us:

  • Energy (and therefore cost) savings through appropriate monitoring of heat, lighting and other appliance use.
  • Security. Many smart homes feature advanced security systems which allow them remote access and direct links to either a private security firm or local police.
  • Accessibility. For someone who is elderly or disabled, tasks like opening the front door, watering the lawn or controlling lights and blinds may be much more difficult done the old-fashioned way. For people in this group, accessibility is a genuine problem that smart technology can help to solve.
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The opportunity for electrical contractors

What does all of this add up to for electrical contractors? While uptake of smart home technology may be a little slower than anticipated, it is still a growing sector and there is opportunity for the company that has upskilled their personnel for installation of smart tech.

Instead of focusing on the gimmicky aspects, such as how many things you can switch on and off from the couch, we’d see opportunity in finding and marketing to the true value for customers. Identify the real problems they have that smart home technology can help to resolve, such as reducing energy usage or improving accessibility.

Let’s also not forget we haven’t looked at commercial applications of smart technology here, a study reported that 30% of businesses worldwide have begun to roll out IoT technology. If your company works in the commercial space, there are plenty of applications of smart technology that uniquely help companies.

If you’re not involved with smart technology already, this is a sector to keep an eye on and do some serious research into getting involved in. Did anyone imagine back in the 80s that the internet could be ubiquitous in households? Probably not so many. Smart home technology and the internet of things may just be the next incarnation.

 

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