Smart home market is growing and maturing

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05/29/2019

The smart home continues to grow in awareness among homeowners, with approximately 22 percent of U.S. Internet households reporting owning a smart home device in Q4 2018, up from 17 percent in Q4 2017, according to The NPD Group. Alongside ownership growth, 2018 saw an 18 percent dollar sales growth in home automation devices compared to 2017, and NPD’s latest Future of Tech forecast expects the category to reach $2.5 billion by the end of 2019.

According to the Connected Home Automation Report from NPD’s Connected Intelligence, smart home device awareness has reached 42 percent among non-owners; but growth in awareness is beginning to slow, indicating that the marketplace is maturing. Additionally, the report shows the largest increase in ownership occurred in the 35-54 age bracket, from 16 to 22 percent, a sign that the smart home concept is shifting from early adopter to mainstream consumer.

This is further evidenced by the broader scope of retailers through which purchases are being made. In fact, consumers are increasingly buying smart home devices from cable/telco providers, home improvement stores and pure play online retailers, according to the NPD Group. Out of the more than 5,000 consumers surveyed who own a smart home device, the research firm found that 13 percent indicated making at least one smart home purchase through their cable/telco provider in Q4 2018, up 6 percentage points from year ago.

The home improvement channel also realized sales growth, particularly in the smart entry category, where 27 percent of consumers reported purchasing in this channel in Q4 2018, up from 16 percent a year earlier, NPD Group found. Finally, sales through pure play online retailers saw increases in smart power and smart lighting, with 51 and 38 percent of respondents indicating purchases were made in those categories through this channel in Q4 2018, up from 38 percent and 30 percent year ago.

“As consumers become more familiar with smart home products we are seeing that they are more open to purchasing through a wider variety of channels,” said Weston Henderek, director, industry analyst for NPD Connected Intelligence. “This demonstrates the importance of having strong retail distribution across a wider number of retailer categories for smart home OEMs.”

The NPD Group Connected Intelligence Connected Home Automation Survey is based on consumer panel research that reaches over 5,000 U.S. consumers, aged 18-plus from diverse regions and demographical backgrounds.

Connected Intelligence provides competitive intelligence and insight on the rapidly evolving consumer’s connected environment. The service focuses on the three core components of the connected market: the device, the broadband access that provides the connectivity and the content that drives consumer behavior. These three pillars of the connected ecosystem are analyzed through a comprehensive review of what is available, adopted, and consumed by the customer, as well as reviewing how the market will evolve over time and what the various vendors can do to best position themselves in this evolving market.

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