Who is Buying Connected Home Solutions Today?
At present, the biggest adopters of smart technologies are consumers aged 30-44 (GenX) and Millennials. They are the early adopters: almost half of them already have some type of smart product at home, although the first group almost doubles adoption rate over the latter one. The main reason for this difference is mainly financial: people between 30 and 44 have higher incomes and more stable positions than their younger counterparts. However, as Millennials grow older they will become the fastest growing smart home adopters, given their familiarity and affinity with technology. Also, as Millennials age, the first digital native generation that comes right after them will embrace connected home devices naturally.
In fact, almost one in every four Americans will incorporate a connected device in their lives this year. It is interesting to note that one third of the people who already own some form of connected home technology or plan to invest in one soon do not see themselves as early adopters. Most of them cited enhanced home security as their primary motivation to acquire smart connected products.
Indeed, home security has proven to be the main key to success for connected home technologies. Traditional home security is a stable, mature market in the United States. At present, consumers of traditional monitored security systems are older adults with higher incomes and a house of their own. One in four people over 60 own a monitored security system, while only 18 percent of those between 18 and 44 have professional security at home. With the development of smart security systems that are more affordable and flexible, this market scope is set to expand and reach new population segments, like younger people with lower incomes and renters.
Besides, people who already own traditional home security systems have also expressed an interest in smart security. They find new technologies appealing and are aware of its benefits and advantages. Traditional security requires professional installation and often implies a commitment of several years that ties the homeowner to the security company. Smart security brings a new approach with more flexibility both in terms of contract and installation, together with new functionalities and improved connectivity, such as 24/7 remote control and monitoring via smartphone app. Also, it enables the incorporation of connected home features that offer homeowners further convenience and comfort.
Connected home features not only appeal to security system owners, but also to non-security consumers. The most popular devices, the ones that are selling best, are connected cameras, smart thermostats and lighting, followed by smart locks, not only for security, but for peace of mind and convenience.
The interest in connected technologies and the purchase intention is bigger in those households that already own smart devices: 56 percent of people who already own at least one smart connected device intend to buy more, while 12 percent of those living in homes without any internet connected device say they intend to add a connected home device in the next year. If these purchasing intentions are fulfilled, adoption rates will double the overall market penetration of connected home technologies in just one year, which we find to be a very good indicator of the market’s health.
At present, the connected home market is right on the edge of the early/mainstream adoption curve which every new technology goes through. Turning the corner will take place as the main barriers to adoption are overcome, demand grows as users get familiarized with connected home technologies and the benefits they offer, and as younger generations grow up to lead the market, easily incorporating smart technology into their homes.
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