Craig Melson from techUK OPINION

July/August 2021

The connected home: Retailers get involved


Last year saw strong growth in ownership of smart home products. But issues remain. Craig Melson, Head of Digital Devices, Market Access, Environment and Sustainability at techUK, outlines how retailers should respond to new consumer insights into smart and connected home device ownership.


or the past five years, techUK and GfK have mapped out how the market for connected and smart home products has performed, and the 2021 edition makes for especially interesting reading as it covers the period of the UK lockdowns.

The report draws from insights from a representative survey of 1,000

consumers combined with GfK’s sales data, which it collects weekly from retailers. Together, the data provide some powerful insights into the state of the market – what is driving sales and barriers to further growth. Last year and into 2021 saw strong growth in connected home products

as we adjusted to lockdown living and working from home. This was mainly down to spending shifting from leisure to durable products and more than a few of us experimenting with the smart home. Overall, there was a 22 per cent rise in sales across all connected home

categories and 21 per cent of consumers bought purchases forward, while others tried out new products, such as smart security, that they hadn’t considered before. 80 per cent of consumers are now ‘aware’ to some degree on what smart home tech is and nearly a quarter of us now have more than three products. So how should retailers react to this data? Firstly, it is clear that with more

and more ‘smart home’ categories emerging (smart cooking anyone?), the technology is going to get more complicated before it becomes simpler. With so many ecosystems and manufacturers to choose from, consumers

now have a lot of choice on how to approach this category and many will feel disappointed if tech does not work together. Consumers want to feel confident about how to use the tech and for the first time this year we have seen ‘interoperability’ become a genuine mainstream concern, particularly among those who have several devices. People want devices that are complementary, easy to set up and configured to work together. If this doesn’t happen, it is very likely to leave consumers frustrated.

Therefore, helping them understand and navigate smart product ranges

should be a strategic priority for retailers. Helping customers really understand the limitations of different devices and choosing a range of tech that is compatible is something in-store retailers can differentiate on. Secondly, retailers should move away from talking about “the tech” and

focus on talking about the benefits that the tech can bring. Cost and privacy remain a concern to buyers – both have consistently

been featured as barriers to growth in the last five years – so communicating the tangible benefits of smart and connected home devices remains as important as ever. Retail can profit from this maturing by talking about how it can really make a difference. Equally, along with ease of use and interoperability, consumers need to be reassured around privacy. Thirdly, retailers should expect price rises at all levels of the supply chain

and have messaging and objection handling in place. COVID-related capacity constraints has seen component and shipping costs rise dramatically and this is already being seen in the market. A China-Europe shipping container now costs 10 times what it did before the pandemic, and the well reported semiconductor shortage has seen supply fall behind demand. So, it’s clear retailers have a key role in supporting consumers embrace

and adopt more smart devices and could provide a key point of differentiation for bricks and mortar stores. In particular, retailers should focus on communicating to consumers the premium living experiences offered by smart home tech and how it can make life easier, keep them entertained… and save money in the long run – this specifically applies to smart appliances and smart energy products. You can read techUK’s latest report looking into current consumer

attitudes towards the Connected Home Market, drivers and barriers of adoption, and the Smart Home Ecosystem – just search for ‘State of the Connected Home 2021’ on the techUK website:

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