Smart home technologies may have become commonplace in homes and businesses across Europe, but their largely siloed nature has prevented them from delivering on their wider promise.
Imagine for a moment a permissions-based world where individual homes are networked together into digital neighbourhoods, where an incidence of crime or a social event can be shared among the people it most concerns immediately and transparently. Although the individual technologies exist aplenty at the current time, it is the framework that has been so far lacking - the missing framework is what is still reinforcing those individual silos. It is predicted that the expanding IoT ecosystem will have a $1.7 trillion annual economic impact in cities by 2025, and in order to gain first mover advantage it is crucial that enterprise is on the front foot and engaging with this new market on an active basis.
The fact that smart home technology has begun to align with wider social and community requirements should come as no surprise a full 50% of the world's population live in cities, and by 2050 that will rise to 70%. Fascinatingly though, this city-dwelling majority must contend with the fact that 99% of apartment buildings worldwide have no digital infrastructure, leaving those silos in place.
One example where these isolated technologies are being brought together in a win-win situation is a social community service rolled out in Germany in May 2017, that exemplifies the benefits of wider smart home connectivity for apartment tenants as well as highlights the business opportunities. For the first time, individuals are empowered to drive this long overdue innovation of connected community themselves - but it is not just individuals who stand to gain additional value from the concept.
The new community model
In just five minutes, and without any technical skill or requirements, any resident can start a private social platform for their building. By fusing together smart home technology, IoT and social network, neighbours and co-inhabitants of apartment blocks can enhance traditional smart home offerings by extending them beyond one consumer’s home, creating a vibrant new community and business opportunity.
The result is an exciting fusion of smart home technology, IoT and social network, where community IoT connects homeowners in building blocks or gated communities, enhance traditional smart home offerings by extending them beyond one consumer’s home for use within communities, grouping many users together and then linking them with facilities management and property managers.
Whether via shared smart sensors or by manual reporting, building faults and breakdowns can be easily logged and reported to the relevant authorities. For example, a broken lift or non-functioning communal light can be reported by one resident, logged, and a repair technician allocated. Other members of the community can follow the progress of the repair, rather than logging duplicate requests. Where apartments are non-serviced, a premium service with a home emergency repairs provider, could be connected instead.
Once connected to smart meters it is possible to monitor irregular usage and pre-empt damaging leaks, for example, by use of an energy measurement service, while receiving a community alert that an intruder alarm has been triggered enables fast response as well as enhancing security for the community as a whole.
This new social community business model offers added value to the smart home proposition, and also offers a whole new set of opportunities to property developers and maintenance contractors. Property developers stand to smooth the commissioning and snagging of new apartment buildings significantly, as building managers can log and track user-reported requests, as well as make significant savings across larger portfolios by aggregating issues and fixing them in bulk.
Meanwhile, building managers and contractors can also benefit, by smoothing workflows, aggregating specialist jobs across sites and also gaining the trust of tenants through regular interaction and clear communication as well as rapid response.
The wider business opportunity
Additionally, the potential for cross- and up-selling among peer groups is particularly strong. A seminal report from McKinsey way back in 2015 identified that marketing-inspired word-of-mouth generates more than twice the sales of paid-for advertising, and these customers have a 37% higher retention rate - a fact that has led to today’s burgeoning influencer marketing budgets. The power of peer recommendation and word of mouth is well recognised, and communities built on shared interest and or location are likely to see more engagement and loyalty than more disparate social networks.
This enhanced marketing can apply not only to increasing the range of smart home technologies per user or per home, but also to selling in premium services, potentially on a trial or other incentivised basis. Many smart home consumers begin with a single key technology proposition that solves a specific pain point - such as a home security system to protect their family, or a smart thermostat to minimise utility bills. Adding in more exotic but use-case based devices such as smart locks and smart lighting is a likely next step.
n terms of services, there is huge potential. Not only enhanced premium services - such as professional alarm response services, but also installation, maintenance and insurance offerings to boot. Then there are the data aggregator services, for example third-party energy measurement tools that offer tailored energy packages to suit usage and environmental tastes, sharing economy services for transport or storage, the opportunities are endless.
Not only these, but with a rapidly aging Western population in-home care for the elderly is particularly attractive, and smart home technologies enable relatively low-cost solutions to aggregate into robust yet unobtrusive systems to monitor wellness.
There are of course softer benefits to the community system too, from the purely social to more practical help, such as watering plants or pet-sitting while on holiday, or local tradesman recommendations.
This new, democratic, social based movement for city dwellers is just the first in a new wave of services that will break down the established silos of smart home products, enabling them to deliver on their wider promise. It should be heard as a rallying cry to IT and service enterprises, that now have the opportunity to enter a disruptive but mature smart home market business model - the future is for sharing.
Thomas Rockmann , VP Connected Home at Deutsche Telekom
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