Selling Smart-Home Products: The Case for Connected-Point Solutions

An extraordinary amount of hype has swirled around the concept of smart homes for the past several years. The attention isn’t misplaced—connected-home products are a genuinely significant development that’s poised to change the way people live. That’s why smart-home products took center stage at this year’s Consumer Electronics Show. A study by Next Market Insights found that the number of U.S. connected households (homes where residents wirelessly monitor and control lighting, appliances, thermostats, locks, and other security features, etc., via apps) is expected to grow from nearly 1.5 million in 2013 to more than 15 million in 2019.

Demand for smart-home products is on the rise, driven by two distinct categories of buyers. One group represents early technology adopters—buyers of products like Apple watches and other cutting-edge electronics. Attracted to the concept of home automation and the latest technology trends, this group is more likely to purchase early versions of unified systems that integrate many different products to a central hub, even if the user experience is still rough around the edges.

The second group, however, is much larger and arguably more important. It consists of people who purchase individual connected products on a piecemeal basis to solve specific problems. They don’t dream of home automation. Instead, they seek replacement solutions for an issue, such as a broken garage-door opener or malfunctioning thermostat, and find that a connected product offers one or two key benefits over the traditional, unconnected versions they’re replacing. Since these consumers don’t consider their issue a home-automation problem, retailers struggle to sell them on a unified automation solution.

Developing Market Attraction

Persistently low retail sales figures for unified DIY home-automation solutions underscore the challenge of selling to the mass market. Unified systems are still too complicated for the average consumer, who either isn’t sold on home automation’s benefits or doesn’t want to deal with the challenge of installing a system.

One hybrid approach that’s gaining market traction is to sell point automation solutions built to work together with other point solutions. In this way, consumers can more easily solve immediate problems with simple, targeted solutions, while laying the foundation for a more comprehensive home-automation system. The key to reaching this target market is to sell easy-to-install products with price points similar to the “dumb” products they replace.

Chamberlain, the leading maker of garage-door openers and other home control products, provides an effective example of this hybrid approach by selling a branded garage-door opener that connects to Nest smart thermostats. From a single Chamberlain app, users can remotely control their home’s heating and cooling systems and garage doors.

Garage doors and heating systems may not appear to have much in common. However, it turns out that smart garage doors are in a great position to “know” when users are home or away, which makes them the perfect candidate to help the smart thermostat keep residents comfortable while reducing energy usage and saving money. Similarly, OSRAM LIGHTIFY smart LED lighting systems are designed to work seamlessly with Nest thermostats, allowing users to control lighting, heating and cooling, and garage door, all from a single Chamberlain smartphone app.

To market its connected garage-door openers, Chamberlain emphasizes simplicity and the power of connectivity. Installation is no more complicated than a traditional opener, and Chamberlain’s openers easily connect via Wi-Fi to operate with other connected products, like Nest and OSRAM’s LIGHTIFY system. The result—consumers get added benefits at an affordable price. Now they can remotely close a door that was mistakenly left open in the morning rush to work and activate heating systems and lights prior to arrival, all from a single smartphone-based app.

By selling affordable smart products that connect via the cloud, these manufacturers are providing customers with the best of both worlds—a simple and affordable solution to their immediate problem, plus a product that can work seamlessly with other connected products as the consumer activates additional smart-home features. It’s a great way for manufacturers and electronic product designers to demonstrate leadership in the smart-home revolution, one product at a time.