Communicating the benefits of a Smart Home

1© GfK 2016 | The Connected Consumer

Communicating

the benefits

of a Smart HomeGfK Arndt Polifke


Drivingyou forward

INVISIBLE

ANALYTICS1

TECH

TRENDS

2016

3D

PRINTING

CONNECTED

CAR

MOBILE

PAYMENTS

ARTIFICIAL

INTELLIGENCE2

VIRTUAL

REALITY3

VIDEO

CONSUMPTION4

WEARABLES5

8

7SMART

HOME

DRONES 9

3D

PRINTING10

MOBILE

PAYMENTS6


Communicating the benefits of a Smart Home

The connected

consumer

Status Quo:

Barriers for

making Smart

Home a mass

market

How to address

these barriers Summary

1

2

3 4

Our lives

will be reshapedas these generations

come of age.

Today’smovement

…halfway

betweenHalf a generation

removed from…

Global

financial

collapse

Advent of the

smartphone

Generations

Y & Z

Two worlds

(urban

migrations)© GfK 2016 | The Connected Consumer

Integrated= the new

connected

The movement from novelty tofunctionality will

define needs and behaviors moving forward.

© GfK 2016 | The Connected Consumer


2013 was the highpoint of technology fortechnology’s sake. Andwhile sales continue,the devices themselvesbecome lessimportant.

37%2013

28%2014

22%2012


Source: GfK Future Buy, 2014

3% developed APAC

3% China

22% emerging APAC

18% Middle East & Africa

8% Central & Eastern Europe

5% Western Europe

0% Latin America

4% North America

8% global

Mobile technologygrowing fastest in

emergingmarkets.


Fundamental

shifts in

consumer behavior

Acceleration IntimacyFreedom

The single mostimportant attribute of smartwatches to the consumer is convenience.

Freedom = convenience


Mobile phones arealready the no. 1 itemthat younger smart-phone users bringon the go… aheadof their wallets.

New forms ofconvenience



Source: GfK Consumer Life | Roper Reports® Worldwide, 2014 and 2010;

mixed mode trend; core 20 countries

54%of global consumers

agree, “If a newtechnology productis not simple to use,

I lose interest.”

Up 8 pts from 2010

Consumers’

patience is

fading fast.

90%expect similarsoftware betweensmartwatches andsmartphones.


Source: GfK Wearable Study 2014; online; covering China, US, UK, Germany, South Korea

Basis: smartwatch owner or non-owner with likelihood to purchase (n=3,973); first choices

Consumers

expressed strong

interest in controlling

devices through

wearables.

Consumers areinterested in usingsmartwatch as aremote controlfor…

Smart

home 49%

Auto-

mobile

47%

© GfK 2016 | The Connected Consumer© GfK 2016 | The Connected Consumer

Fundamental

shifts in

consumer behavior



The new social status

http://www.dallasnews.com/opinion/sunday-commentary/20140404-insanely-busy-schedules-are-the-new-status-symbol.ece)

© GfK 2016 | The Connected Consumer 18

19© GfK 2016 | The Connected Consumer© GfK 2016 | The Connected Consumer

Source: Statisticbrain.com

5 minutes sustained attention

span down from

12 minutes in 1998

8 secondsfocused attention

span down from

12 seconds in 2000

9 seconds

Pervasive

cultural

ADD

Source: Statisticbrain.com

© GfK 2016 | The Connected Consumer© GfK 2016 | The Connected Consumer

Fundamental

shifts in

consumer behavior



Rethinking our

relationship to

the home…


…to the

living home.


Key

takeaways

With integration

comes new calls that go

beyond personalization

to humanization.

The connected

consumer is evolving

from connectivity to

complete and seamless

integration with

technology.

Cultural and societal

forces are increasing

the acceleration felt in

their everyday lives,

and their expectations

of business.

Many consumers

are smart home

ready – but are

empty nesters and

elderly as well?

Consider the multiple

dimensions of freedom

and its impact on

this consumer.



The connected

consumer

Status Quo:

Barriers for

making Smart

Home a mass

market

How to address


1

2

3 4


smart homeWhat is ?Controlled via

a mobile device

or remotely

through the cloud

Connected

devices and

home automa-

tion services


Communication

and control

devices

Home automation

& security

Smart

entertainment

Smart small

domestic appliances

Smart major

domestic appliances

GfK connects

all pillars of

the Smart

Home …


… as a horizontal data cut across our POS panel reports

1 Not all product groups are available in all countries

By looking at all ‘smart’ products

Washing machines

Tumble dryers

Dishwashers

Cooking

Cooling

Freezers

Hobs

Hoods

Microwaves Ovens

Steam Ovens

Wine Cabinets

Air Conditioner

Vacuum Cleaners

Hot Beverage Maker

Kettles

Electrical Cooking Pots

Power Lawnmower

Deep Fryers

Baby Monitors

Kitchen Scales

(coming soon)

Visual Cams

Alert Detectors

Movement Detectors

Tubular Motors

Intruder Security

LED Lamps

Door Communication

Programmable Thermostats

Electrical Heating

Electrical Belt drives

Garage Door Automation

Switch Programs

(coming soon)

PTV

Audio Home Systems

Tuner

Amplifier

Receiver

Set-top Boxes

Video Player/Recorder

Telephone Systems

Comm. Cards

Comm. Devices

Gateways

Plugs

Kits (coming soon)

Home

automation

& security

Smart

entertainment

Smart major

domestic

appliances

Smart small

domestic

appliances

Communication

and control

devices


GfK POS Tracking DE, FR, GB, NL Jan/Feb 2016 vs J/F 2015

The market shows nice growth – but is far away from being

a mass market (Share of smart)

Home

automation

& security

4%

Smart

entertainment

50%

Smart major

domestic

appliances

<1%

Smart small

domestic

appliances

1%

Communication

and control

devices

31%

+61%

Smart Home growth excl.

Smart Entertainment (Sales Value)

Jan – Feb 2016 vs.

Jan – Feb 2015


All categories

grow vs prev. year

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

200.000

F/F 2015 M/A 2015 M/J 2015 J/A 2015 S/O 2015 N/D 2015 J/F 2016

Comm. And Control Devices Smart Small Domestic Appliances

Smart Major Domestic Appliances Home Automation and Security

Ths. EUR


GfK POS Tracking DE, FR, GB, NL Jan/Feb 2016 to J/F 2015


GfK POS Tracking DE, FR, GB, NL Jan/Feb 2016 vs J/F 2015

+42%

3.427

Number of Smart

Home Products

+43%

439Number of Smart Home

Brands



GfK POS Tracking DE, FR, GB, NL Jan/Feb 2016

Consumers are

ready to spend

significantly

more money for

smart devices

Alert

DetectorNetcam

Standard

Product

Smart

Product

€ 131€ 83

€ 69€ 13



On top,

Smart Home can generate

customer loyalty for

stationary retailers

Bundles with

services like insurances,

security, health services,

are possible and add

turnover

potential



Smart devices allow to create new business models based on services.

Big data

PoS After sale

service

Maintenance

MDASDA

Consumables


GfK POS Tracking DE, FR, GB Jan/Feb 2016

The number of

selling outlets

shows the

potential for

Smart devices

Alert

DetectorNetcam

Standard

Product

Smart

Product

11.580850

18.50018.300



What are the key barriers

for adoption?



Representative of online audience in each country

7,000+ Consumers

Online InterviewingVia smartphones, tablets, laptops and PCs

7 Markets

Brazil

Consumers interviewed in:Germany Japan UK USChina South Korea


Leading Edge

Consumers

17%

Category

PassionateEarly

Adopters

within the

category

Influentials

recommend/

influence

40


9/10consumers are aware

of the term “smart home” Consumers

Leading

Edge

Consumers

Mobile Payments

Smart home technology

3D Printing

Wearable Technology

Driverless cars/Autonomous driving

The Internet of Things

Connected Car

Virtual/Augmented Reality

Smart Cities

55%

50%

41%

35%

33%

29%

26%

24%

24%

74%

78%

62%

63%

51%

50%

52%

46%

48%


Consumers feel

that smart home

technology will

have an impact on

their life over the

next few years

75%

China

Brazil

South

Korea

US

UK

Germany

Japan

57%

55%

51%

47%

43%

19%

Global

50%


Base: C02. How appealing is smart home technology to you? Base: All markets= 7149

15%

25%

38%

7%

16%

Appeal

of smart

home

concept

Extremely

appealing

Very

appealing

Fairly

appealing

Not at all

appealing

Not very

appealing

78%of consumers agreed that “smart home” was

an extremely, very appealing or fairly appealing concept

China 91%

Brazil 89%

South Korea 86%

US 75%

UK 66%

Germany 72%

Japan 59%


19%

28%36%

12%

5%

Millennials (16 – 34)

Fairly appealing

Not at all

appealing

Not very

appealing

Smart home appeal:

Influence of life stage

36%

27%

14%6%

16%

Generation X (35 – 54)

Very appealing

Extremely appealing

Not at all

appealing

Not very

appealing


Smart

Home $$


Global only

16%

of consumers say they know

“a lot about the smart home”

China 25%

South Korea 11%

Japan 7%

“Know

a lot”

Brazil 26%

US 22%

UK 11%

Germany 9%


Base: C18. What products, devices or services do you think of when thinking of “smart home”? [Open end]

Base: All who know at least a little about the smart home term

What products,

devices or

services do you

think of when

thinking of

“smart home”?

“Refrigerators

monitoring stock ...

that can independently

shop for items themselves”

(DE)

“TV, computer, telephone,

refrigerator, stove, washer,

dryer, microwave, DVD,

cable television, air

conditioner, Automotive,

radios, doors, fan”

(BR)

“‘Watches, fitness

trackers.”

(UK)

“Including smart appliance

control, intelligent lighting

control, electric curtain

control, anti-theft alarm,

access control intercom,

gas leaks and other.”

(CN)

“Devices that you wear and

connect to other machines

and monitor things like

your pulse and BP.”

(UK)

“Smoke detectors, locks,

garage doors, windows,

lighting.”

(US)

“Synchronising

multiple TVs.”

(KO)

“Apps control the

heating, lights.”

(DE)

“Light bulbs that turn

on with your phone.”

(US)

“I think of heating

and air conditioning.”

(US)

“Energy devices; lighting;

socketed appliances.”

(UK)



Security & Control

Smart Energy & Lighting

Smart Entertainment & Connectivity

Smart Health

Smart Appliances

53%

50%

47%

44%

43%

82%

80%

81%

67%

75%

Appeal of smart home category

Consumers

Leading

Edge

Consumers

Extremely appealing

Very appealing


of consumers claim

they will purchase a

smart home product in

the next two years

58%

Interested in

purchasing

Note: Smart home product as defined on slide 28

(excluding Smart TVs, health and connectivity devices such as routers)

A validated

prediction

of consumers claim

they will purchase a

smart home product in

the next two years

14%

Validated

intention

to purchase

49


Key barriers

for adoption

23%

Knowledge

of products

24%

Concerns

personal privacy

33%

Cost

to purchase

19%

Concerns about

security in my home


of consumers expect

devices made by diff

vendors to be able

to communicate

with each other

66%

… and it’s even higher

amongst those already

owning a smart device

78%

51


Players are from various industries – which should join the forces now

Mobile

Operators

Start Ups

IT SmartphonesElectrical

installation

Drive

Technology

Phone

Devices & Routers

Consumer

Electronics

Heating,

Lighting, Security MDA/SDA

Energy

Providers


19%

12%

12%

10%10%

8%

8%

5%

5%

12%

Multiplicity

of vendors

trusted to deliver

smart home

Electronics Manufacturer

Multinational Tech Company

High Street Retailer/

In street (US)

Utility Company

Would not trust any company

Other

Financial Service Company

Mobile Phone Network

Telecoms Provider

Online Retailer


Source: Roper Reports Worldwide 2014 and 2010 (mixed mode trend, core 20 countries)

Consumers’

patience is

fading fast

Global consumers agree

“If a new technology product is not

simple to use, I lose interest”

up 8 pts from 2010

54%




The connected

consumer

Status Quo:

Barriers for

making Smart

Home a mass

market

How to address


1

2

3 4

How to make smart home more successful?


Important to get it

right from the start …

consumers have

high expectations

It’s all about

communication

To create

awareness

To address

concerns


BUS-

Systems

Ethernet/

LANPowerline

Success requires

low installation

efforts

Wireless

connection helps:

systems are

mobile and can

easily be installed

LCN

Radio

Systems

Standard/

Open

Proprietary


Take any technical

details out from

communication but

address motivations

Discussions on

Standards is around

for 15 years:

Consumers don't

care about

standards



Peace of

mind & feeling

secure

GfK France Smart Home local study

Comfort

Saving

time

Saving

money

Ecofriendly

behaviour

Care for

elderly



Retailers need to dedicate some extra

shop space to Smart Home: communicate

the horizontal and vertical product

benefits without overwhelming

with the amount of opportunities

Example: Smart Display by Navstar



GfK France Smart Home local study

Keep

it simple

Communicate

the low costs

needed for initial

start due

to modular

systems

Alliances are

future proof as

built by strong

partners

Point out the

flexibility to grow

it later without

making it a must


Dedicated Sales

staff, that is able

to explore

customer's

motivations

Special skills

needed: Coaches

and training

concepts, have

to address the

sensitive topic

Floor staff has

to be familiar

with the products,

the installation &

possible

concerns


Don't forget the

importance after

sales service

Make your

customer a happy

and a loyal clientConsider service

packages, bringing in

security, delivery,

health services


Who can help

when an owner of a

starter kit wants to take

the next step, by adding

garage door drive,

shading and

irrigation control?

Should retailers

and installers in the

local areas do PR

together, promoting

a local Smart Home

partner network?

Consider

co-operation

between

retailers and

installers:



Slowly we’re

seeing brands

begin to

“get it right”

Creating a hub for

all things to work

together

seamlessly

1Creating AI that

makes the device

really “Smart”

2Creating simple

solutions that are

incredibly easy for

consumers

3



The connected

consumer

Status Quo:

Barriers for

making Smart

Home a mass

market

How to address


1

2

3 4


Communicating the benefits of a smart home

How to close the chasm between early adopters and a mass market

The overall Smart Home concept

may sound overwhelming. So

focus needs to remain on initial

customer motivation.

2Thin line between

‘Wow’ and being

scared

Exploring purchase motivations is

a sensible topic. Dedicated floor

staff, that received special

training covering both technical

and psychological aspects is a

must.

5Training

There is some awareness, but

consumers are lacking

information. Yet they like the

benefits, once it is explained.

1Knowledge is low,

while benefits are

appreciated

To communicate the horizontal

benefits of SH devices concepts

like dedicated stores or smart

displays are recommended

4 New shop

concepts required

Be aware of history. Retailers

have made some negative

experience in the past.

.

3 Avoid Déja Vu for

retailers

Co-operation to create a network

of local partners, to drive

communication and leverage

different capabilities of installers

and retailers can create a push

6Co-operation


Find out more about our global smart home study

and detailed market reports:

http://www.gfk.com/insights/report/making-the-smart-home-a-reality/

@Contact us:

Arndt Polifke

[email protected]

69

THANK YOU

http://www.gfk.com/insights/report/making-the-smart-home-a-reality/

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Communicating the benefits of a Smart Home

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Transcript of Communicating the benefits of a Smart Home