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Three ways to accelerate smart home IoT adoption

When it comes to adoption of new products and technologies, there is often a chronological lag between perceived mass-market readiness and reality. Cloud, mobile apps and big data all fell into this category before indeed becoming an integral part of our lives, and it is a storyline currently playing out with the internet of things-connected smart home.

The promise of smart home technology has been laid bare for some time now: Lights that turn on when the front door opens, shades that draw when the sun is out, refrigerators that alert you when milk is running low. And many of these products are indeed hitting the market, which is perhaps why a 2016 study projects that nearly 30 million U.S. households will add smart home technology in the next 12 months.

But there is a difference between consumers buying one or two standalone products and immersing oneself in a smart home where connected devices, applications and sensors communicate with one another — as well as the outside world. Moving towards the latter scenario requires several key steps — taken singularly and collectively — by technology vendors and today’s broader smart home ecosystem.

Strengthen the value proposition

If your 2010 Chevy Traverse with 50,000 miles on it is working properly, there is little incentive to replace it. Apply this consumer behavior to thermostats, lights and refrigerators and it is easy to see why smart home adoption has been slow to take off.

Thermostats don’t die, lights last for months if not longer, and refrigerators are expensive to replace. For smart thermostats, the initial value proposition was primarily the ability to remotely control the temperature from a mobile device. But these are nice to have, rather than need to have, capabilities.

Mass-market adoption requires value propositions that the majority of consumers care about — saving money, being more energy efficient, staying comfortable and adding convenience to their lives. There is still work to do on this front: Parks Associates’ home energy management data released in March 2016 show 70% of households with smart energy devices report saving money due to reduced energy consumption. That said, 83% of U.S. broadband households do not know the price they are paying for electricity. If devices can be optimized to save more energy and money while maintaining comfort, and that benefit is demonstrated and communicated to consumers, that tangible value will spur greater adoption.

Finally, industry is still feeling its way around the level and type of energy information consumers want. There is a sizeable segment of the market interested in learning the energy efficiency of their homes and seeing the data, but converting this data to insights on appliance degradation so the HVAC is less likely to fail on a hot day has the promise of savings and convenience with broader appeal.

Shift integration burden from consumers

Dumping a bunch of connected home devices on a table and expecting consumers to trigger the lights to go on when the security system is unarmed is not realistic. Shifting the installation and integration burden away from consumers is critical, and to do so requires a better collaborative effort by device manufacturers, data providers and utilities.

Deeper integration of devices and data depends on deeper partnerships amongst companies producing devices, data and cloud providers, as well as utility and cable companies. Device manufacturers have not traditionally been API or SaaS oriented, but that is changing as they recognize integration with other IoT-connected devices compounds the value added their product can deliver.

And it’s not just about linking devices, but data as well. If a connected home device is informed by third-party data, such as how hot it will be on that day and the future weather forecast, a truly smart home will know when to water the lawn, when to automatically heat or cool based on the weather, the home and customer preferences, and when to change the thermostat schedule based on one’s presence in the home. Granular and hyper-local weather data should prove especially appealing to smart home vendors as 50% of a home’s energy usage is driven by the weather.

Accelerate the time to value

The cost of a smart home product is not calculated solely by its sticker price, as the consumer will factor in installation and time invested to get everything working. Even if a consumer buys a smart home product, frustration with the process may relegate it to a spot on the closet shelf collecting dust.

Utilities are mandated to deliver energy efficiency programs, so are more than incented to make them work, and as easy as possible for consumers to set up and use. At the same time, device manufacturers want to start engaging customers and proving their value so all parties share a motivation to either simplify the installation process and/or rely on installers as a key channel to market.

Smart home product and service providers should think outside the box for partners to help communicating a smart home’s value. In a 2016 consumer survey by Coldwell Banker, more than half of homeowners (54%) said they would purchase or install smart home products if they were selling their home and knew that doing so would make it sell faster. In other words, there are benefits — whether it’s in the form of a higher price sellers can list their homes at or buying a “pre-integrated” smart home that eliminates installation headaches — and expedites the time to value, savings and convenience.

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