Utilities must grab the smart home revolution by the horns
With CES 2018 now in the rear-view mirror, it’s clear smart home technologies are here to stay… and flourish. Deployed to accomplish everything from monitoring energy use all the way to making sure there’s enough milk in the fridge, they’re slowly transforming the home into much more than a place where we hang our coat at night.
Revenues in the home automation market are expected to grow significantly between 2016 and 2021, especially in China (57%) and Europe (43%), according to Statista. In that context, Utilities have an opportunity to become much more than simple providers of electricity, gas, and water. They must take steps now to leverage the smart home revolution or face becoming irrelevant to their customers looking for connected devices that make their homes more energy efficient, safer, and easier to run.
Smart home trends
The smart home market “has exploded in the last few years and was the name of the game at CES 2018, where smart home tech spilled way beyond the exhibit space dedicated to that sector,” reports Digital Trends. Among the hot topics were voice assistants, of course, but also smart water monitoring and home security systems.
Underlying these trends is the constant need to use energy more efficiently. “Smart thermostats and smart lighting help conserve energy and keep the bills down, which will be another big reason more and more people turn to IoT powered devices in 2018,” predicts GlobalSign.
Energy control and monitoring
While it’s not the first thing that comes to mind when consumers are thinking about smart home technology, energy control and monitoring is probably the most important. After all, the dazzling array of high-tech gadgets, devices and appliances that now promise to turn our humble abodes into techno hubs, need electricity, water, or gas to power most, if not all, of them.
As a result, smart technologies are increasingly being installed in homes to manage energy and water, monitor its use, and detect and report any anomalies. HomeServe’s Leakbot for example, can alert homeowners when a change in air or water temperature suggests a leak. This can save customers, and insurance companies, a lot of grief and money.
Home safety is no longer the purview of the wealthy and professional security companies. Thanks to smart home technology, which includes sensors, cameras inserted into everything from peepholes to light fixtures, locks and doorbells, consumers can now monitor and control access to their homes directly from their smartphone. “Home security is projected to be a $47 billion market globally by 2020,” reports Digital Trends.
While this segment may not appear relevant at first, it actually opens up doors for hybrid products that increase the reach of Utilities. Since a home equipped with smart security is already monitored by sensors and cameras, why not use them to warn homeowners of any anomalies like an overflowing bathtub, or broken or burnt out lights inside and out. Not only would the homeowner receive an alert but they could also be directed to possible expert repair services in the area. Since they can control the system at a distance, they could even give access to their home remotely and get home with the problem already fixed.
Connectivity is the thread that makes it all possible and two devices at the forefront of that revolution: the smartphone and voice assistants. Almost 60% of the world’s population will be using a smartphone by 2022, according to Strategy Analytics, a number that already stands at 44% today. As for voice assistants, Gartner predicts that 75% of households in the US will have a smart voice assistant by 2020, up from 7% in 2017.
Both smartphone and voice assistants multiply smart home possibilities for consumers. Using their phone, customers can control their tado smart thermostat for example. The device keeps track of the weather to ensure the temperature at home is just the way they want it. If they feel a little colder than normal on their way home, they can simply use the app to crank things up a notch. As a bonus, HomeServe estimates the system could save consumers up to 31% in heating costs.
These devices also present opportunities Utilities can’t afford to miss. The smartphone and voice assistant give consumers the immediacy and simplicity they crave and give Utilities the opportunity to become even more relevant in their customers’ lives.
Utilities: Essential partners in making homes smarter
The smart home of the future opens up tremendous opportunities for Utilities. As the main providers of gas, water, and electricity, they control the “pipeline” that feeds all of today’s consumer smart home conveniences. Even in a changing environment, where customers are looking at alternative ways of consuming and producing energy, utility providers will remain key players in the smart economy.
What to consider when entering the smart home space
When thinking about where to invest their resources, Utilities should first consider consumer preferences and habits. With their trusted smartphones never far away, it seems consumers have become “empowered and emboldened by information,” explains Lisa Gevelber, VP Marketing at Google. They’re prone to “impatience, immediate action, instant gratification, even some impulsiveness.”
Utilities can tap into the technology to give their customers more control, an added sense of security, and most of all, peace of mind. PwC’s Smart home, seamless life survey already points to a connection, with almost three quarters of consumers saying “they use their smart home device more frequently because it connects to their mobile device.”
When looking more closely, HomeServe’s Engagement Opportunity for Utilities survey shows that homeowners have preferences when it comes to which home operations they would be interested in controlling via an app.
At the top of their list are home security (49%), lighting controls (43%), and heating and cooling (41%), three areas where Utilities can play a significant role.
A key advantage for Utilities and their partners
When it comes to the installation of smart products in their home, consumers continue to trust their energy suppliers the most, more than a manufacturer or retailer, according to PwC. This, in combination with HomeServe’s finding that 70% of homeowners are satisfied with their provider, means Utilities have a serious advantage in the race to make homes smart.
That said, while some Utilities have the knowledge and/or resources to develop smart technology devices, most are more comfortable focusing on what they know best, which is to provide the energy and water their customers need in a reliable fashion and at a reasonable price. This leaves them at a disadvantage in the smart home revolution.
Partnerships present the best of both worlds for Utilities: a chance to bank on their brand and established relationship with customers and an opportunity to introduce quality smart technologies that will multiply connections.
Toon is a great example of successful partnership. The smart thermostat, developed by Quby, which was then bought by Dutch utility Eneco, comes with a flexible and comprehensive app that lets customers monitor their consumption, control lighting and smart plugs, and even check the amount of energy that’s being generated by solar panels.
Leakbot mentioned earlier, also comes with an app but goes one step further to offer customers the option of booking an approved expert plumber directly from the app. This shows how products can be integrated into larger smart home systems that benefit customers but also Utilities, their partners, insurance companies, and expert repair people. The smart home revolution will require a lot of flexibility and adaptability from Utilities and partnerships can alleviate some of the pressure, as consumers will no doubt continue to expect convenience and peace of mind at the push of a button or, even better, without noticing it’s happening.
Home Services offerings can become successful strategies for Utilities wanting to strengthen and lengthen relationships with their customers.
With the size of the smart home market expected to quadruple by 2023, we have outlined some success factors to consider in order to capitalise on this opportunity.
Utilities have a prime role to play in this revolution, if they can embrace change and keep pace with their customers’ needs. To that end, here are 5 global customer trends Utilities can positively leverage.