Brands are the Battleground in the Fight for the New Smart Home User

The smart home market is crowded with numerous brands vying for attention. This is especially true for several of the most adopted categories such as video doorbells, networked cameras, and smart thermostats. It is also the case that most buyers across categories are buying a smart version of a given device for the first time, with some exceptions such as smart plugs and smart light bulbs.

Parks Associates research shows that 75% of US internet households that purchased a video doorbell did so for the first time. Almost half of all households that purchased one bought a Ring, and there is a long tail of competitors. The challenge, then, is how to stand out as a brand against Ring and the crowded field beyond the leader and understand how consumers factor brand into the decision-making process.

Brand reputation plays a crucial role in the buyer journey, although the most important factors are price, compatibility, and research reviews. Trusted smart home brands command a loyal customer base because of historical performance, quality, and reliability. Data privacy and security for any connected device are paramount and the trust factor can heavily influence decisions.

Generally, user reviews are important for smart home shoppers unfamiliar with certain products. Parks Associates data shows that behind price, compatibility with smart phone use, and best user reviews, 33% of consumers consider brand familiarity and brand value to be important considerations, and almost as many consumers say that a brand known for premium quality is important. This is why it is crucial for smart home players to track brand perception, NPS, and user reviews.  Customer service becomes an important factor too for brand loyalty.

In addition, business decisions like ending support for a new device model or a data breach can have a profound impact on the purchase consideration.

Consumers find brand ecosystems appealing. Even with the adoption and effort around standards like Matter, the allure of a single-brand ecosystem remains strong. Brands that offer a wide range of interoperable products within their ecosystem provide a seamless and integrated user experience. For instance, a user might prefer to buy smart lights, thermostats, and security systems all from the same brand or service provider to ensure they work together smoothly without the need for multiple apps or setups.

This integration extends to user interface design, where a unified approach across different devices can significantly enhance usability and satisfaction. One way that brands incentivize customers to stay within brand is through offering bundles. Households adopting smart home devices are often buying multiple products to create a complete solution and/or to take advantage of the cost benefits of buying or installing multiple devices in a single instance, with 33% of internet households reporting that they purchased products bundled by a smart home seller.

Brand loyalty is also cultivated through product updates, customer service and loyalty programs. Perks like extended warranties, exclusive updates, and premium support services are often available to customers within a brand's ecosystem. These benefits can make a significant difference in consumer satisfaction and loyalty, influencing long-term relationships between the brand and its customers. Premium support can also serve as a source of recurring or single transaction revenue opportunity, making the customer that much more valuable.

Parks Associates research shows that as of 2022 almost half of those resolving technical issues did so through either a one-time payment or as enrollees in a paid monthly plan.

Parks Associates extensively covers the smart home and security market, as well as all other areas of the connected home. For more information, please contact me or any of Parks Associates team. Visit www.parksassociates.com for access to additional details.