New Research Shows What Residential Buyers Want
Consumers are embracing new technologies and services associated with home controls and remote access for everything from energy management, video monitoring, keyless door locks, distributed audio and more. Learn revealing statistics and market insights to help make your stake in the smart-home marketplace.
Grasping the Depth of Opportunity
Security dealers need to learn which smart-home benefits are most appealing to their prospects, and then learn how to market and demonstrate these lifestyle enhancements. This provides multiple business advantages, including more customer stickiness, the opportunity to upgrade existing systems in owned homes, and higher revenues based on more value in the price/value equation.
There may also be the opportunity to offer other non-category products. For instance, homeowners are adopting streaming video devices (e.g., Roku and Apple TV), streaming audio systems (e.g., Sonos) and universal remotes (URC, Harmony from Logitech, RTI, among others). While many of these products can be self-installed, not many consumers are comfortable with that aspect.
In particular, older householders who are interested in security, but currently without it, will appreciate professional installation for some devices/systems that they don’t have but are nervous about installing on their own. Roku, by the way, has nearly as strong a following with older homeowners as it does with younger ones. The reasons: content such as BBC and access to time-tested movies and even reruns of TV programs that appeal to sensibilities of earlier generations.
Best Buy, for example, has been offering a promotion for a Harmony universal remote and then having its Geek Squad techs install the codes for $250. Parks Associates found the remote itself for sale at $178. While not a lot of extra money, if the dealer is already at the home and understands the process of installing codes, it is “found” money.
Providing such additional services may also encourage a homeowner to think of security dealers in new, more routinized ways. That also opens the door for a trusted security dealer to offer new systems/devices as they become available. The additional offerings may or may not have monitoring fees, but selling and installing does generate revenue.
Taking Account of the DIY Competition
While change has risk, so does avoiding the sea change underway in the residential market. New DIY security and home controls systems, such as Iris from Lowe’s and Staples’ own Staples Connect, continue to be introduced by retailers. With an app and a $99 wireless hub, Staples Connect is geared to provide users a single point of control for its various connected household devices. Revolv — a smartphone app and hub that’s billed to be capable of automating virtually all smart-home devices regardless of brand — begins at $299.
Both Staples Connect and Revolv have multiple vendors named as partners for their introductions. Staples, for example, show Philips, Honeywell and many more on its Web site. These smart-home controllers do not include professional monitoring, but do include basic home management benefits.
Other entries will follow. The DIY vendors’ reasons for entry do vary from those of professional security providers, but are no less dramatic. These stores exist to sell products, not services; this equipment revenue stream must be protected. It is possible that some DIY offerings may migrate to offer professional monitoring if the option plays out favorably in business models.
Not all smart-home additions will suit all security dealers. The smart-home trend is still emerging and early channel options are moving through security with its high-touch sales method. Also of importance is that smart-home devices offer benefits to renters and resident owners of high-rise condos and the like. Most renters and condo owners have not perceived the need for professionally monitored security. If security dealers are also providers of smart-home products and services, available markets can be expected to expand.
Of course, not every homeowner will embrace home controls; certainly most won’t adopt in the next 18-24 months. However, it is important for dealers not to miss out on early adopters. They represent an opportunity to expand and redefine the role of today’s security dealer. If security dealers do not seize this opportunity, there are multiple channels that will fill any void.
Tricia Parks is CEO of Dallas-based research firm Parks Associates. She can be reached at firstname.lastname@example.org or (972) 490-1113.
Smart-Home Terminology Defined
As consumers’ lifestyles have become increasingly interactive, thanks to smartphones and other connected devices, it stands to reason connected home devices will gain in prevalence as well. Enter the smart home. Following are several definitions for terms that will become more commonplace in the connected home vernacular.
Smart home — A residence equipped with a smart-home operating system (OS).
Smart-home operating system (OS) — A program that 1) enables home-wide applications governed by resident-specific rules that allow for monitoring and controlling devices, as well communicating with residents; and 2) enables a resident using a browser or app to remotely interact to check status, monitor activity and make changes.
A smart-home OS is distinguished from smart devices (e.g., a programmable, learning thermostat with a smartphone interface) and smart subsystems (e.g., a whole-house audio/video system) in that it supports home-wide interaction of many types of devices and subsystems. For example, A/V and HVAC and a single user interface to all devices. There may be smart devices and smart subsystems in a smart home that operate independently from the smart-home OS.
Smart-home system — A branded collection of products that include a smart-home OS and may include other software, devices and services from which components can be selected and configured to create smart homes for a wide variety of residential customers.
One might be tempted to use the term “smart-home system” to also mean a smart-home system installed in a particular residence. Instead the term “installed smart-home system” can be used to avoid ambiguity.
Smart-home platform &m
dash; A collection of software, devices and services that, under a contract specifying the terms of the agreement, is provided to a smart-home system supplier as an element or foundation for its smart-home system. A supplier of smart-home systems may employ more than one smart-home platform, each with a different purpose. The most common smart-home platforms include a smart-home OS.
Smart-home device — A single component used with a smart-home controller or smart-home system that can be accessed and controlled remotely via transmission using the Internet. When standing alone, it is referred to as a smart device.
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