How can companies make the most of the Smart Home opportunity?
Design Highlights and Trends
By Maruan El Mahgiub – Director of Business Strategy
Even though the smart home market is predicted to increase in size by 70% in the next 4 years, it is still within the “Peak of Inflated Expectations” according to Gartner, where customer expectations do not match what industry is able to offer.
How can the smart home cross the chasm to wide consumer acceptance? How can companies go beyond a product-centered strategy and create memorable experiences that meet the needs of a changing market?
In order to address these questions, Mormedi put together a panel of experts and global design leaders. We invited Nina Warburton from Philips & Philips Avent, Rod White from TP Vision, Michael E. Smith from Dell, and Daniel Schubert from Vodafone to the event space at Mormedi’s Madrid offices to participate in a roundtable moderated by Mormedi CEO, Jaime Moreno. Here is a summary of what they had to say.
Integration of experiences inside and outside the home
As with the majority of projects that Mormedi is involved in, the panelists agreed that one of the keys to success when competing in the smart home market is that companies need to understand the challenges to consumer adoption at a system-wide level. This means that, more and more, customers expect that their experiences in their “smart” homes will continue when they leave the home. Potentially, this could include the way that people consume content on devices in the home and outside the home, or even how new modes of “smart” mobility will act as an extension of—or be integrated with—the home.
The home as a platform
The panelists also agreed that the current smart home solutions being offered were too fragmented, and that companies were offering portfolios of devices that were too large and complex, creating an additional barrier to adoption due to decision fatigue.
Daniel Schubert put forward a question for companies to consider: Does the smart home need a plethora of devices, or could it simply have the sensors and input devices that we currently associate with smartphones—screens, cameras, microphones, etc.—embedded in the home, and have applications utilize these and run on our “Home as a Platform”? If this were the case, then smart homes could utilize these systems for services across industries, with fewer interoperability challenges and without the need for consumers to constantly buy new devices.
The health and well-being opportunity
An area of particular interest that the panelists commented on regarding the connected home is in health and well-being. Particularly in countries with socialized medicine, there is a strong need for costs to be stripped out of the health systems, which offers an opportunity for companies that can increase cost efficiency through remote monitoring, prevention, and in-home care.
This means that it is likely that the sensorisation of homes could get more advanced, to pick up more detailed signals regarding our health and habits.
Due to regulatory issues around decision making in health diagnosis and advice, it is still likely that into the future, a physician will need to verify data that is picked up and interpreted by sensors and diagnostic tools in the home. Therefore, the panel felt that telehealth is a major area of opportunity, where the companies that offer connected products and services could also facilitate the connection with healthcare professionals remotely for benefits including early diagnosis, reduced burden on patients, and reduced costs.
In addition to personal health, the panelists also touched on the important customer need of peace of mind that a sensorised home can give. As Daniel Schubert mentioned, “IoT can give younger generations a peace of mind with older relatives that live alone and need special care”.
The role of large corporates, start-ups and SMEs
This danger for all companies regardless of size—but particularly start-ups and SMEs, with their more limited financial resources—is ensuring that they are building a solution that will have sufficient scale.
IoT/smart home solutions will, by definition, require a physical device. The unit economics required in manufacturing suggests that unless a device reaches a large potential market (often in the hundreds of thousands at minimum), the project will fail. This requires not only market power to reach the relevant audiences through marketing channels, but also that before beginning to design the device/service, the needs of the customer are well understood. It is therefore imperative that companies thoroughly investigate the real customer needs and pain points, and validate with potential customers, before committing to rolling out a technological solution without a clear market.
The smart home/IoT market opportunity is huge, but designing integrated products and services that respond to real user needs and that generate a significant return on investment—in spite of the high potential risk involved in devices and IoT—is a challenge.
In order to better achieve this, our panel concluded that companies need to consider the CX of the smart home from a system-wide level (taking in both in-home and out-of-home experiences), looking at ways to simplify their product portfolio and see the home as a platform, take advantage of the significant needs around health and well-being, ensuring that they are building a solution that will have sufficient scale, and being more relationship-oriented than transactional.
Thank you to our guest speakers and guests for sharing their insights and opinions.
To hear more about Mormedi’s events, please subscribe to our social media channels. If you would like to learn about how Mormedi can help your company succeed in connected products and services, contact us at madridHQ[at]mormedi.com.
Banking Digitalisation By Jaime Moreno, CEO and Founder of Mormedi The economy cannot stop. Digitalisation has enabled banks to continue serving customers even in the midst of a pandemic. However, on its own, digitalisation is worthless. If users are unable to use...
Design Highlights and Trends By Millaray Vega, Mormedi Strategic Designer There can be no doubt that the COVID-19 pandemic has been a tragedy for the airline industry. But, to say that the pandemic is to blame for the industry’s crisis might not be entirely true. The...
Design Highlights and Trends By Jaime Moreno What comes first: the brand or the experience? You may think that this is a classic "chicken or egg" conundrum. However, the answer is actually rather simple.Can a brand exist without an experience? No.Without an...