Growing the Smart Appliance Market
Smart appliance makers seek to reach consumers
As more household appliances connect online, industry leaders are looking for convincing ways to introduce the Internet of Things to consumers, build general awareness and show that smart devices have more than bells and whistles.
To that end, makers and designers still have a lot of ground to cover. The market is still in its infancy — just 16 percent of U.S. broadband households currently own a smart home device, according to research from Parks Associates. But it’s starting to gain more interest among U.S. consumers — one-third of broadband households plan to purchase one device over the next 12 months.
In some respects, the industry is still in the “flip-phone phase” of smart appliance design, says John Ouseph, General Electric’s technology manager for software and connected appliances.
“We’re moving from ‘adding-on’ the technology to ‘designing-in’ the technology,” he explains. “The dynamics of consumer-friendly app development is being understood, and the underlying back-end infrastructure is being put in place.
“A successful smart appliance must be more than integrating the network technology into the appliance; it must encompass an entire system solution aimed at making the consumer’s life more convenient and enjoyable.”
New products from GE, LG and others already allow consumers to monitor laundry from their smart phone, check if ice is available or pre-heat the oven from the grocery store. The current smart home is not quite the kitchen of 2020, as pictured by Park Associates Director of Home Controls and Energy Tom Kerber, where every cook is a chef, and appliances “streamline the meal preparation process from start to finish.” But the vision is there.
For the new products already on the market, finding the right bundle of value-added services can help manufacturers drive price expansion, Kerber says.
“In the thermostat market, nearly half of consumers are willing to pay three times more for a thermostat with a bundle of advanced features,” he says. “A more consultative selling approach and a strong set of educational materials will help grow awareness and understanding of how connectivity provides value.”
Building the entire ecosystem
Further consumer awareness is also dependent on building the entire connected-device ecosystem, says Mike Beyerle, marketing manager at GE Appliances & Lighting.
“For example, in 2004, the first camera technology became available on cell phones in the U.S.,” he said. “The pictures were low quality, the screens were small and there were no additional features. Today, cameras are an automatic feature in cell phones. It was the development of the rest of the ecosystem that now allows us to text pictures, email them, post them, morph them and store selfies in the cloud to share with friends.”
He sees similar opportunities with connected devices. Smart thermostats “currently only allow users to adjust the temperature remotely,” he continues. “In the future, these thermostats could drop the house temperature a degree or two in the summertime or when the oven announces to the IoT that it has just been turned on. The thermistor, which measures the incoming water temperature in the washing machine, may tell the heat pump water heater that it needs to run in a high-demand mode during the winter when incoming water temperature has dropped.
“One day, it may be possible for dishwashers, washers and refrigerators to all compile a shopping list that can be quickly picked up after users press ‘buy now’ on their phones. The ecosystem is advancing every day, but it will take more time before the environment is fully developed.”
Beyerle believes that as the ecosystem is built-out, the idea that smart appliances are gimmicky will disappear. The cohesive environment of connected devices will provide consumers with more free time by making chores easier, simplifying weekly tasks or reducing time spent maintaining appliances in the home.
“The first electric washing machines were considered gimmicky, and have now become a standard part of most households,” he says.
Not just for the tech-savvy
Early on, smart grid capability was expected to be a driver of smart appliances, LG Electronics Vice President of Public Affairs and Communications John Taylor says. And while energy management is still a draw, interfacing with a smart meter is not enough to excite most consumers about smart appliances, according to Taylor. The devices must incorporate valuable functions that help make consumers’ lives easier by increasing communication between the product and the user.
Ease of communication — easy-to-use apps and programmable buttons on the devices themselves — is key to appealing to the everyday consumer and not just the early-adopters and tech-inclined.
“We know, for instance, that consumers are increasingly aware of and more frequently using smart thermostats — we now offer a product called the Dry Contact that allows third-party digital thermostat control of LG’s indoor air conditioner units, which just helps to expand the network of smart home connectivity,” he says. “If we’re able to connect any smart thermostat with LG’s AC units today, and the consumer becomes increasingly comfortable and appreciative of the industry’s ‘bridging’ efforts tomorrow, the possibilities for untapped growth and adoption within the appliances space — and beyond — are limitless.
“Bottom line, once consumers spend time with the products and see just how easy and convenient they are to use, they understand the incredible benefits of having these products in their home, easing the transition from traditional to smart appliances.”
A connected ecosystem and a streamlined interface can be two sides of a same coin — simplicity.
From an end-user standpoint, there is a lot of “visual complexity” associated with today’s feature-rich appliance products that is becoming more simplified through well-designed smartphone apps, Ouseph says.
“The multiple hard keys, LED indicators and displays that can overwhelm an appliance user interface will eventually migrate to elegant and visually-rich user interfaces, leveraging the processing power and high resolution screens found on even the most basic smartphone,” he says.
Assuring consumers that devices are secure from data thieves and other online threats is another important step for building the market.
“Forty percent of consumers are very concerned about privacy and security of smart products,” Kerber says. “Having a platform and infrastructure that is constantly updating security mechanisms to stay ahead of the hackers and detect unauthorized access to prevent control and restore operations is key.
“Security breaches will have a huge negative impact on a brand, so manufacturers must take strong steps to assure that all systems are constantly tested and evaluated for security holes.”
Appliances designers must also strike a balance between security and not limiting functionality.
“Concerns sometimes arise regarding whether it is possible to provide a secure solution that is also feature-rich, and we continue to find these solutions,” Beyerle says. “For example, door latches on refrigerators were outlawed in 1958, yet refrigerator doors still stay closed and our food stays cold.”