by Adam Simon, Global MD of Retail Business Development
While the potential for growth in the home automation market is enormous, consumers remain ignorant about Smart Home products, still to be convinced about the extra benefits they can bring.
In the UK, direct contact with consumers has been a big driver with British Gas, using their other interventions in the home to successfully push their Hive solution. But work still needs to be done to persuade consumers that they will get value from a £100 Smart smoke detector as compared to a standard unit that costs £20.
Traditional ICT channels are facing new competition in the distribution of Smart Home and other connected products, with DIY Retailers playing an important role in this space, leading in the USA with smart hub solutions in Retailers such as Lowe’s and Home Depot.
Utilities are very engaged, as mentioned above with British Gas selling the Hive and Npower selling the Nest. Mobile phone operators are also showing a lot of interest and in the USA, Verizon has recently started the roll-out of a new store format, which includes fitness, wearables and home products.
Insurance companies and gyms will play a role in the health arena as they start offering products at a subsidised cost in order to encourage their clients to track their health and physical activity. And lastly, the OEM manufacturers themselves are competitors as they link up to the end customer and can propose upgrades and new products directly to them.
The categories to watch closely include thermostats, smoke detectors, IP cameras, alarm systems, and smart lighting.
There are two vital questions for the successful Retailer in the Smart Homes market: which Retailer will decide to invest in their own Smart hub like the US Retailers mentioned above and Staples with Staples Connect? At the moment there is hesitancy because of fears of adopting a technology that could become obsolete.
And, the other question is: which Retailer is going to invest in the capability to install not just a single point solution like a thermostat, but a multi-function Smart Home solution? This is by definition not plug and play and requires knowledge of the different protocols and how to link them up in one system.
This is a market that is ripe for small independent Retailers and artisans to operate in, where so much of the value is the installation itself.
In summary, there is room for everyone.