The Refinement Of Smart Homes: Opportunities For Installers And Locksmiths In 2017

It is a well-established fact in the marketing and business worlds that it costs as much as five times as much to attract new customers than it does to retain an existing customer. However, in service-based industries such as locksmiths or domestic alarm installation where a customer has a very specific need that, once fulfilled, is unlikely to generate much in the way of repeat business, the question becomes, how do you generate genuine opportunities for repeat business?

The rapid growth of the home automation market represents an ideal opportunity for locksmiths and alarm installers to not only revisit existing customers with exciting new products, but also to upsell future clients, thereby value-adding future sales and increasing potential sales.

According to Blake Kozak, principal analyst for smart home and security technology at IHS Markit, one of the world’s leading market research firms in the areas of security and technology, this year’s Consumer Electronics Show (CES) in Las Vegas represented a gold mine of opportunities in the home automation market.

Highlights

In his most recent report on the show, Kozak stated that many of the smart home announcements at this year’s show were not just about cameras or light bulbs. Instead, the announcements focused on the consumer and enriching the consumer experience through seamless integrations and feature-rich offerings that can appeal to a diverse range of needs.

Kozak went on to highlight that, in 2016, globally there were more than 80 million shipments of smart home devices with an installed base that exceeded 190 million devices, demonstrating a market with rapid growth potential.

Analysis

In his analysis of the show, Kozak clearly believes that cameras took centre stage. He stated, “For cameras, the smart home focus at CES was around facial recognition, 360 degree viewing, security motion detection and HomeKit (the D-Link Omna camera).”

He went on to explain, “Outdoor cameras were featured as well, with announcements from Bosch and Ring, each of which had outdoor cameras connected to outdoor power sources and integrated with lighting. Baby monitors were also a trending item, with Netgear Arlo and OneLink by First Alert, each of which have advanced features such as air quality monitoring, but the OneLink camera offers video respiration detection, a feature that uses non-invasive methods to monitor a baby’s breathing.”

Overall, the smart home camera market continues to expand as suppliers enhance their portfolio with cameras designed for various purposes, such as outdoors, indoors, wired, wireless and cameras with lower price points. A few new cameras that were announced combine several connectivity standards and automation features into one device (including voice control), such as the Somfy One and SmartBeings Woohoo, which will likely look to challenge the Canary and Piper products, which are already strong in the US.”

Illumination On Bulbs and Sensors

Kozak also highlighted the emergence of smart light bulbs and sensors as a growing market sector, with increasing potential for sales opportunities. “Light bulbs such as Lifx provide two types of illumination, one of which is infrared to assist with outdoor cameras using night vision. The infrared helps the cameras see clearer in complete darkness, which for battery powered cameras will dramatically increase battery life. Other light bulb announcements featured integrated motion detection and speakers.”

Kozak went on to explain, “Environmental sensors were also more pervasive this year at CES. Devices with embedded temperature and humidity sensors have been commonplace for many years, but there has been a spike in devices with embedded air quality sensors (VOC detection). This has also led to an increase in the number of air purifiers, ranging from portable and stationary to robots which move through the home detecting air quality levels, purifying the air on demand.”

According to Kozak, IHS Markit believes the market for environmental sensors, especially air quality sensors monitoring allergens and pollutants as well as ultraviolet (UV), will become commonplace in smart home devices.

Changing Business Models And Making Things Simple

Kozak explained that in addition to device refinement, business models are also changing at CES. “Many of the top service providers offering smart home products have focused on manufacturing their own devices in order to create a seamless look and feel across devices. Although partnerships will still hold great importance, service providers are looking to build up their own device portfolio and develop proprietary back-end software and artificial intelligence (AI).”

Two examples of providers taking this route include Vivint and Comcast – each of which started off their smart home venture by offering a mix and match of device types and device brands – however, each now has its own devices and back end. Moreover, Vivint announced its intelligent Sky platform will rely on AI to automate the home. The consumer simply answers questions from the system while it learns behaviours. Alarm.com announced a similar offering with its Insights Engine.

Meanwhile, Comcast continues to work toward owning the home through entertainment, recently enhancing its voice-controlled remote to allow controlling of lights and other automatons. Not to be outdone, ADT announced a partnership with Amazon which permits users of ADT Pulse to arm and disarm the security system through voice control. What makes this announcement unique is that the user arms and disarms the system by telling Alexa a personal identification number (PIN). This is significant because there have been reports of security systems being armed and disarmed from outside the home. This new partnership provides an additional layer of security, which is timed well with the recent Internet of Things (IoT) security vulnerability news.

Simplifying the smart home was also a trend. Sigma Designs announced SmartStart and Comcast is partnering with Cirrent (ZipKey) to provide quick and easy connection of IoT devices. IHS believes making smart home devices easier to install for the consumer (do-it-yourselfers) as well as professional installers will remove one of the biggest barriers to mass smart home adoption.

Lastly, according to Kozak, “Voice assistants could be found at nearly every smart home booth at CES this year. IHS Markit believes that voice assistants will become the new user interface for the smart home, but the mobile device will continue to have its place when managing settings and advanced features.

A Maturing Market

Overall, there were more than 190 exhibitors with a smart home offering at CES 2017. However, despite this fragmentation, Kozak explained that it is clear the smart home market is finding maturity in North America and it is reasonable to believe Australia will follow suit. Suppliers and service providers are making strides to enrich devices and the platforms with features consumers find valuable and can easily install.

Moreover, industry players in the US are looking to bring the technology and experience to the consumer through new channels, such as electronics retailers (Best Buy in partnership with Vivint), hotels (Wynn in partnership with Amazon), insurance, utilities, builders/real estate (KB Home Caldwell Banker) and rentals (Airbnb in partnership with Vivint and August Lock). This is a model that could easily be replicated here in Australia. As smart home technology is pushed to the consumer from all sides, awareness will grow and prices will fall, with one of the final hurdles being consumer imagination.

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