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Smart Home and Smart Appliances is Next Battleground for CE Sector, but Consumer Confusion Widespread
New Consumer Research Study
26 OCT 2016 - Smart home automation, smart appliance ownership and smart home surveillance could be primed and ready for growth, though progress is being hindered by widespread confusion, according to a comprehensive new consumer research report from Futuresource Consulting.
The study, which interviewed more than 4,000 people across the UK, France, Germany and the USA showed that nearly half of consumers are reasonably, very or extremely likely to choose a smart washing machine on their next purchase, with a similar response for refrigeration goods.
More good news for the industry is that 94% of current smart appliance owners said they would replace their existing smart appliance with another next time around, demonstrating that once consumers are immersed in the experience they cannot imagine losing the functionality.
"But it's not all fanfares and feasting for the CE industry," says Simon Bryant, Associate Director at Futuresource Consulting. "Although ownership of smart appliances is moving beyond the innovators, many consumers are still confused by what constitutes a smart appliance, and that's a serious problem.
"To demonstrate the full extent of this confusion, 21% of consumers told us that they owned a smart appliance. However, when we drilled down into the detail many people were classifying their smartphone or smart TV as a smart appliance. The concept of smart appliances does not yet resonate with the vast majority of consumers."
Many elements of the Futuresource smart home study underline the need for consumer education regarding the benefits of smart appliances. Those who have purchased smart appliances see the value of them and are pleased with the tangible benefits of ownership. By 2019, the value of the global household appliances industry is expected to exceed $300 billion. If the industry is able to educate a wider majority on the benefits of smart appliances, it will extend this market's technology road map, provide consumers with opportunities to save money and micro manage their homes, as well as offering vendors an additional revenue stream from value-add services and subscriptions.
Brand loyalty in both washing machines and refrigeration is strong, with Samsung leading the pack at 11% penetration and 7 in 10 Samsung owners most likely to buy Samsung again, closely followed by LG, with 6 in 10 LG owners likely to buy LG next time around.
Within the washing machine sector, Whirlpool has the highest penetration, at 12% within the respondent base, followed by Bosch at 10% and Samsung and Hotpoint with 7%. Future brand loyalty is also strong in this segment, particularly for Bosch and Samsung, with close to 7 in 10 saying they are likely to buy the same brand next time they purchase.
Samsung stood out again when consumers were asked who they trusted most in the smart appliance and smart monitoring services market, with just over 1 in 5 citing this brand. Bosch was the second most frequently mentioned, although it was some way behind with a mention of 10%.
Outside the traditional appliance manufacturers, several other players were also mentioned by consumers, including Apple, Sony, Microsoft and Google, so some respondents are thinking beyond the traditional white goods manufacturers, though these tech brands did not achieve widespread mentions and have some way to go. Beyond smart appliances, the smart home is being shaped through entertainment distribution & control, security, lighting and climate control. "With the scale of the opportunity, it's not surprising that a vast array of companies from a diversity of sectors are getting involved," says Bryant. The smart home is becoming a strategic battleground where just over 1 in 5 respondents in our survey are using some type of smart home service, with security and remote monitoring leading the way, predominately in the US.
"We believe that once the education gap is plugged we're going to see an influx of interest in the sector. Watch out for remote monitoring, house control systems and the rise of voice interaction. Amazon Echo, now launched into the UK market two years after its US debut, comes with intuitive voice technology and 3,000 apps or 'skills' which could prove to be the catalyst for the entire smart home revolution. Google and Apple have since played their hand in this space and will add significant momentum."
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Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com
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