Consumer IoT

Understanding Your Data Is Key In Delivering a Complete Smart Home Experience

KEY TAKEAWAYS FROM CONNECTIONS EUROPE – AMSTERDAM, NOV 2016 Last week, mnubo attended the annual [...]


Last week, mnubo attended the annual CONNECTIONS Europe event in Amsterdam hosted by Parks Associates. Like in previous years, the event brought together some of the industry’s leading smart home and consumer product companies for two days of panel discussions, keynote presentations and meaningful networking opportunities. Many hot topics were covered over the two days… below is our thoughts on the top three takeaways from the conference.


  1. The product is the path to a new ecosystem

The smart home space does not have that one company which builds all the products for every smart home need. There are hundreds of companies entering the smart home space with somewhat disparate products, aiming to be the leaders in automation, security, energy management, etc. But the reality is, in isolation the value of these products is limited. There is a real opportunity to provide ‘smart-home-as-a-service’ to homeowners, but the fragmented ecosystem is limiting how quickly we deliver this value. Even ‘security-as-a-service’, a long standing entry-point to a smart home value-proposition, is still not achieving its overall goal because for that 40$-a-month… most homeowners are struggling to see the complete value – hence the high attrition for this service.

But what if we end up in this utopian era, where we enter or leave our homes, the home knows everything about what we do and fully adapts to our needs. When the home is truly intelligent, not just connected, then your willingness to pay 40$ a month would likely increase. All of a sudden that 40$ a month reduces my heating bills, optimizes my lights, gives me convenience and makes my home secure… the complete value is a lot more apparent.

Right now, we’re not at that stage because products have become connected, but they are not not yet ‘smart’. A truly smart home will be done in ‘pockets of ecosystems’, where products work together seamlessly, without interrupting the home environment. Unless you are a brand that is providing multiple products, it will be hard to enable that. What we foresee are ecosystems coming together, that will have similar data and application conditions around it – facilitating experience interoperability (not just technical). Unifying experiences across products, by leveraging applications and their data will become the path to a new smart home ecosystem.


  1. The Jetsons VS. Do-it-yourself – Where is the balance?

One of the many questions circulating the room was ‘why hasn’t the smart home taken off’? Sure we’ve seen growth, but not the growth that everyone expected. While consumer awareness and market readiness are huge barriers, one of the bigger barriers lie in the structure of the smart home.

Simply put, there are two types of smart homes – the Jetsons and the ‘Do-it-Yourself’ push button version. The Jetsons approach (what was previously called domotics) is fully automated, its pre-programmed/hardwired and very expensive. It’s an old concept that is highly disruptive and does not adapt to new innovations. On the other side, is the siloed ‘do-it-yourself’ approach that requires a push button strategy. While the siloed approach has been great at driving adoption thus far, it is limited by the number of applications one consumer can manage. Currently smart home applications are not synchronized, which inhibits the rapid adoption of a seamless experience. There are applications that attempt to bring all of the siloed apps together, that do not lock customers in or require expensive hardwiring, but they push the integration burden onto the consumer.

To drive rapid adoption, consumers need a balance between the Jetsons and the Do-it-Yourself. It is up to smart home product manufacturers and service providers to deliver a balance between ‘fully controlled’ and ‘fully remote controlled’ houses. The smart home experience needs to be as transparent as possible – not disruptive.


  1. User experience is the key differentiator

When it came to the user experience, there were many differing opinions that circulated the room.

First off, the reason for buying a connected product needs to be clear in order to drive mass adoption. Consumers will not go to the store to buy a connected product, but they will buy a smart experience that positively resonates with them. Often times consumers buy products because they’re cool, but justify the investment with rational reasons (ie: energy savings). Therefore product manufacturers must appeal to both rational senses (ie: insurance reductions, security, etc) and the ‘cool factor’ (ie: convenience, aesthetics, etc).

Second, was the value of connectivity. We will eventually enter an era, where any product that is not connected to the internet will be perceived as fairly useless. If we look at past products, you’ll notice customers were connected but there was poor engagement. There needs to be an additional layer of services/features on top of the connected product so that it’s more than just monitoring videos. This presents an opportunity to bridge insight with action. For example partnering with third party professional services, who can respond to an in-app alert when a customer identifies an intruder in their home while away on vacation.

Third, were the difficulties associated with installation and aftermarket support. There are not enough ways for consumers to install devices and access support when something goes wrong. The fact that a consumer has to call support to get their doorbell to work is a problem. If smart devices come with an overhead, it will slow down the adoption rate and disrupt the consumer experience. Product manufacturers need to think about the overhead they are creating and that has to be close to zero. Moreover, connected products, at a minimum, need to offer the same experience as a non-smart product (from installation, usage, to throwing it out, etc).


  1. Retailers are struggling to sell the experience

Retailers around the world are investing heavily in the IoT, but they have not been the most successful sales channel. Product manufacturers are still struggling to penetrate the retail space because retailers do not fully understand the value of a connected product themselves. And with less than 2% of the population knowledgeable enough to actively go out and buy a connected product from a retailer, the chances of achieving mass adoption are slim.

This lack of education has made it more expensive to sell a connected product through retail versus a ‘non-connected’ (traditional) product. The reality is, customers will not look for a smart solution through retail.

While many companies agree that the retail space will be a significant channel in the future, right now the most opportunity lies in strategic partnerships with distributors/ecosystem partners and direct sales. Product manufacturers need to create packages that have several products across ecosystems.


Looking ahead..

There’s no doubt that exciting times are ahead for the smart home space. The market is still in its early days and we will continue to see consumer adoption via siloed products and experiences – the mass market adoption of an end-to-end smart home experience is somewhere down the road. Many of the challenges plaguing the smart home space can be addressed by understanding the data generated by the connected products/equipment. The more we gather insights on how products are being used, the quality of connectivity, proactive customer service etc., the more influence the various stakeholders can have (including retailers) on improving and driving consumer adoption.

Congratulations to Parks Associates for another successful CONNECTIONS event!