Who buys smart-home products?

Chicago -- Dan Arnold did something unusual for a presenter on the topic of the smart-and-connected home: He started with a thorough definition of the phrase "smart-and-connected device."

Here it is: "A product for home-device management that senses conditions and adjusts itself, captures data for greater efficiency, 'learns' your behaviors and adapts accordingly, and/or allows for monitoring and control while you are away from home."

Arnold followed that exercise with a more common pursuit -- measuring the growth of smart-device usage. And here, the managing partner for Asheville, North Carolina-based research firm Trifecta served some eye-opening numbers.

  • Sales of cell phones increased from $18 billion in 2010 to $51 billion in 2015;
  • 90% of adults own cell phones, most of them smart; and
  • Penetration of home Wi-Fi has increased from 55% of U.S. households in 2010 to 81% in 2015.

"There are tons of reasons, and tons of stats explain why smart and connected devices are here to stay," said Arnold, speaking here at the 2015 Home Improvement Research Institute Fall Conference.

While the trend exists, so do the barriers to purchase. Two of the primary obstacles, he said are cost of purchase and cost of installation.

Of course, obstacles and drivers vary depending on the customer, and in this regard, Trifecta has identified six segments along the spectrum of smart and connected homeowners.

  • Technocrati: These consumers want the latest and greatest digital toys for their homes. They also have the resources to buy them.
  • Home controllers: These consumers see technology as a tool to improve their lives.
  • Security seekers: Ambivalent about technology, this segment is interested in smart products mainly for personal safety and security.
  • Lean and green: These consumers are thrifty with strong environmental interests.
  • Austerity at home: Homeowners who are more focused on frugality than comfort, convenience or security.
  • Disinterested technophobes: Consumers with little interest in either technology or the benefits of smart and connected homes.

Clearly, the top of the list represents better sales opportunities than the bottom. More surprising, he said, is the way consumers move from awareness to installation. Cost of installation is an issue, but fear of installation is not an issue, regardless of the homeowners generational label.

Arnold added that he thought it was interesting that manufacturer's websites have been largely non-factors in the path to purchase. Instead, it's homedepot.com and lowes.com, along with reviews on Google and Amazon, among others, that lead the consideration stage of the purchase path.

Arnold's presentation was part of the 2015 Home Improvement Research Institute Fall Conference held here last month. For more information, visit HIRI.org.

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