Why the UK is trailing in the European smart home battle

So far bricks and mortar stores have made little impact on consumers in the UK as far as smart home products are concerned, but this may be about to change with 02 announcing its new concept stores. In our recent survey only 8 per cent of consumers feel that Retailers have done a good job of explaining the Smart Home concept.

O2’s recent announcement of its new concept stores in Manchester and London is a welcome example of a UK retailer looking to undertake a bigger role in reshaping consumers’ experience of, and appetite for, innovative smart home technology.

The concept includes ‘Inspiration Zones’ – partnering with other businesses to accurately demonstrate how the smart home fits together - technology tutorials, lounge areas and O2 Gurus who do more than just sell products but actually educate customers.

UK retailers from traditional high street firms to DIY stores and utility companies, have largely let the smart home take a back seat. To this end, telecommunications companies such as O2 could set the benchmark in the UK, but even so, we still have a lot of catching up to do compared to our European counterparts.

Education

The virtues of smart home technology are most apparent when they are demonstrated to consumers, so they can see how it fits in to their daily lives. Yet few UK retailers have gone beyond simply stocking the individual devices on their shelves, doing little by way of marketing or promoting the smart home as a concept or experience.

Our recent study of 2,500 consumers across Europe found that only 16 per cent of Brits felt they have seen the smart home mentioned, promoted or advertised ‘all the time’ or ‘very often’ in the past year. As a result, it’s no surprise that over half (51 per cent) of UK respondents claim not to be currently interested in the smart home. By introducing more experiential ways of presenting smart home products, retailers can play a key role in changing this attitude.

Catching up with Europe

In Germany, Deutsche Telekom is leading the way, having recently commissioned extensive market research on the subject of the smart home, revealing last year that consumer spending on smart home products and services will hit €122.77 billion by 2020. It sells complete smart home packages and has invested in a dedicated website solely for this market. This has clearly had an impact on consumers’ viewpoints, with only 16 per cent of Germans claiming no interest in the smart home.

Meanwhile, in France, both Orange and SFR released connected home services back in 2014. A number of stores have also begun to embrace the need for an educational aspect to the sale of smart home products. French retailer, Lick! serves as a prime example, having introduced a very different format of store, which allows customers to test out the systems on a connected network.

Learning Lessons

The time has come for us to learn a lesson or two from our European counterparts, as O2 has started to do.s

UK retailers with a vested interest in tech need to sit up and take note of these examples. However, it is not only traditional high street and telecom companies, but utilities and DIY stores too, who are in a strong position to take advantage of high levels of consumer trust when it comes to the smart home. This is a potentially profitable opportunity to install new technology and gain repeat business as consumers add devices, and purchase value-added services.

Despite the fact that purchasing intent for the smart home is fairly low, Europeans are becoming increasingly more optimistic about the smart home as suggested by the fact that 57 per cent are open to learning more - especially in areas of cost savings, security and convenience. In fact, a quarter of Europeans are willing to spend up to £500 in the next twelve months on the right products, UK consumers are most willing to spend more on smart home products: 11 per cent would spend up to £1,000. The category is growing and is there to be seized.

So… What’s Next?

In our view, retailers need to consider how they display smart tech in-store and whether they should invest in or form partnerships, so they can sell a complete package of devices, software, network connectivity as well as generating ongoing revenue from service and support contracts. The first brands to invest in educating and supporting consumers will build trust and thus, be best placed to benefit from this fast growing new technology opportunity.

O2 is raising the bar with its new concept stores and the recent announcement that it is set to launch a smart-home platform this summer. Other telecom companies need to follow suit, as indeed do all other retailers who could have a lucrative slice of the smart home pie.

Adam Simon, Retail MD, CONTEXT

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