Connected Home 2.0

Two years on… what do your customers really want now?

As the digital revolution advances, consumer attitudes, beliefs and intentions have continued to evolve. We explore how companies must reimagine the possible to stay ahead in the connected home.

Overview

A lot has changed since our first connected home survey. Against the backdrop of a rapidly evolving world, we surveyed over 2,000 consumers to understand their views and intentions to adopt technologies that have the potential to revolutionise the way we live within our homes.

Since the first connected home survey in 2016, buying intentions are gradually improving with around 30% of people (2016 - 14%) planning to purchase a smart device for the home in the next two years. The biggest adopters are likely to be 18-25 year-old aspirational homeowners: 59% of this group have already invested in smart entertainment and 40% in wearables.

However, despite the advances of technology in our daily lives, it seems the majority of consumers (52%) still have no plans to invest in connected home technology. Our data digs deeper to find out the reasons behind this continued consumer reticence.

We’ve highlighted five key areas where we believe the most significant changes have happened and are still to come.


Key findings

Ownership & intent to purchase

In our previous survey in 2016, we identified that over 72% of people were unlikely to introduce smart home technology in the next two to five years and were unwilling to pay for it.

There were two reasons for this. The perceived complexity of connected home devices, as well as the actual benefits vs. the financial investment required. Fast forward to 2018 and ownership of smart devices has more than doubled in the last two years, but despite this uplift, the majority of consumers (52%) still have no plans to invest in connected home technology.

In order for companies to persuade consumers to invest, they must work to develop the capabilities of their devices and effectively communicate the value they can bring to people’s lives.

Crucially, as devices evolve and revolutionise the home, it is young people that are not only more likely to adopt smart devices but they also trust tech companies (67%) more than energy (60%) or telecoms (54%) to supply and install them which is very positive moving forward.

Adoption cycle and smart home assistants

To drive adoption of these new technologies, companies need to focus their efforts on ‘the smart home assistants’; the central device or system which gives you control over the other smart devices in your home.

These products are fairly new to the market yet they are quickly becoming the vital infrastructure required for the modern, connected home. Our research demonstrates that consumers who purchase technology like this are more willing to invest in other, wider ranging devices in the home.

Companies that manufactures these ‘smart home assistants’ are able to benefit in two ways: compatibility and data ownership.

Compatibility - with third party devices, offering a seamless experience for consumers can be tricky. This is far easier to achieve for ‘smart home assistant’ manufacturers, with everything running smoother under one system.

Data ownership
Smart home assistants capture a wide range of data; creating detailed profiles of the user, often with information gathered from numerous connected devices. This allows services to be tailored and targeted to actual consumer needs. However, the use of this data could also raise questions with consumers.

Data privacy

With the introduction of GDPR and recent controversies in the news, data privacy is likely to become an ever increasing issue in the connected home space.

Alongside price (38%), data privacy concerns represent a significant barrier to adoption for consumers who do not already own smart technology (22%). Consumers are becoming ever more aware of the power of data and although companies use the data to offer tailored services and product upgrades, there are still concerns around security and how the data is used.

Although this is not as high on the agenda for people who already own smart technology, there are still a number of consumer (11%) for whom data privacy is a barrier.

Value & consumer expectations

Before making a purchase, only one in five expect to be positively impacted by a connected home device. But once purchased, consumers report much higher levels of actual consumer value - with positive impact ratings doubling or trebling, for example:

1. The perceived health benefits of a hub or assistant is rated as 13%, increasing to 44% after purchase, with comfort values almost doubling from 33% to 65%

2. Energy meters reported a pre-purchase impact value of 23% for comfort and 56% in financial terms, rising to 54% and 72% respectively once installed.

Traditional players are no longer able to win consumers hearts and loyalty by relying on traditional models and offering a standalone product. As there is a bigger shift towards customer experience, all companies must think more broadly around not only how they can innovate, but how they communicate this positive change effectively with their customers.

Upgrade cycles

Generally, over 40% of connected home device owners are expecting to upgrade their devices within the next two years (excluding smart meters). This strengthens for private renters, especially in home appliances, lighting, plugs and assistants (60%).

This data suggests that the low ticket items, especially the items that you can take with you when move home, are being consumed more like smart phones. The core capabilities of these products are appealing enough for consumers to invest before the product has reached its technological maturity - new features can and will drive purchases.

Explore the Connected Home
Pick a persona and click on the devices to explore the data

Meet Peter, a traditionalist who is looking to feel safe in his home. Peter is 50 years old and lives with his wife with no dependents in their suburban home.

Peter is hard to convince of the benefits of smart technology, so is attracted mainly to price conscious propositions. He demonstrates a general lack of interest, with little focus on improving his lifestyle. There could be potential for Peter to invest in devices that improve his comfort levels, however the main driver to any purchasing decisions would be based on financial benefit. With very low ownership, willingness to purchase or plans to upgrade, Peter is our least engaged persona.

Meet Pippa, a price-conscious aspirational who is looking to stay on trend. Pippa is 27 years old, single and rents a small apartment in the city with her friends.

Pippa wants to improve her lifestyle and comfort by ensuring she stays up-to-date with technology trends. It is important for Pippa to be first to try these trends, which means she is an early adopter who is keen to experiment with new products. Pippa would mostly trust technology giants and telecoms to install her new technologies. Whilst she understands the benefits of connected homes, she remains price conscious and as such demonstrates the second lowest ownership out of our personas, alongside average willingness to purchase or upgrade in the future. Any purchasing decisions she does make are based on the best financial value, followed by recommendations from friends and influencers.

Meet Paul, a young dad who is looking for convenience and support to run his household and busy life. He is 35 years old, married and has two children. Together with his family, Paul lives in a modern family home in the city.

Paul is attracted by propositions that promote comfort and health, as well as provide entertainment. He is likely to be an early adopter and wants to experiment with new products, whilst remaining a price conscious purchaser. Out of all our personas, Paul demonstrates the highest willingness to purchase and is also most likely to upgrade in the short term. This suggests that he and his family are happy to invest and experiment with technology that has not yet matured yet. However, they rely heavily on the opinions of family and friends before they make purchasing decisions. Paul mostly trust telecoms and technology companies to install his smart technology.

Meet Penny, a tech savvy homeowner who is looking to customise her surroundings. She is 55 years old and has two grown up children. Penny lives on her own in a large terraced house in a suburban area.

Penny is interested in making her home ‘smart’, but likes to research and weigh all the options before making a decision. She became interested in smart home devices after her children gifted her a smart home assistant for Christmas, which surprised her by adding value and entertainment into her daily life. Penny demonstrates the second highest willingness to purchase but lowest willingness to upgrade existing devices, demonstrating that she has purchasing power but is very settled with her views and needs. Penny is primarily looking for devices which promote a comfortable home and is interested in simplifying the way she runs her household, to save time and hassle. Penny trusts telecoms the most to install her devices.

Low ownership
High ownership
Do you currently have Smart Heating in your home?
Impact of a Smart Heating in the home
Comfort
Health
Lifestyle
Financial
Entertainment
It has a positive impact
It has no impact
It has a negative impact
Overall positive impact
of the 2,006 respondents
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Contact us

Steve Jennings
UK Leader of Industry for Energy, Utilities and Resources, PwC United Kingdom
Tel: +44 (0) 7704 564 513
Email

Ronan O'Regan
Director Utilities, PwC United Kingdom
Tel: +44 (0)20 7804 4259
Email

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