Capturing the Smart Home Cost-Conscious Consumer

by Parks Associates | May. 8, 2020

Digital is in. Computing and communications devices are common in well over 70% of US households, eliciting no more excitement than a microwave or a TV. That familiarity does not translate to a perception of low value ? quite the reverse. These basic digital products are important daily helpers much like appliances. The purchaser’s question is not whether a basic product will be purchased or valued, but instead, what are the best features, to which brands am I loyal, and where are the deals. Connected entertainment and computing products themselves – smart phones, laptops, smart TVs – are mainstays.

Smart home devices have not reached this plateau. Smart speakers – multi-purpose entertainment and control devices – were introduced later (2014) and adoption soared. Smart thermostats, the mostly highly adopted smart home device, were introduced by Ecobee in 2007 and followed by NEST in 2011. Yet, smart thermostats, a smart home device, are in only 13% of US broadband households while smart speakers, a connected entertainment device, are present in 41% (4Q 2019) of broadband households.

Marketing is challenged. These devices do provide value, but many consumers, particularly those disinclined to complete time-taking research, do not understand or do not believe in their value. Parks Associates’ Smart Home Strategy: Capturing the Cost-Conscious Consumer analyzes characteristics of buyers with an eye to addressing more than specific features or even just price as dominant triggers to purchase. The research analyzes purchase patterns by a householders’ efforts at finding “best” or “lowest” price. Careful Spenders, as example, do their homework and then use a purchased product consistently once it is owned. That good experience leads them forward to additional purchases. This is not simply a matter of income or home type. Demographics do matter, but householder attitudes towards their homes and affinity to technology are also important to understanding which consumers to target first with new products and services.

A quarter of broadband households fall into the Careful Spenders category. These households consistently take advantage of opportunities to get good prices or good value. They are also the highest buyers of digital home products, including smart home devices. The difference between this segment and others is dramatic crossing attitudes towards the home and safety, the value of technology, and general engagement in lifestyles. Marketing to Careful Spenders must lead the way. These sales will be the trigger for other segments to push smart home devices to mass market adoption.

Parks Associates is dedicated to understanding the purchase habits of consumers. Visit our website for more information on our consumer research.

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