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Smart homes are becoming the norm. Smart home technology made headlines at the Consumer Electronics Show earlier this year, and the investment could pay off for consumer electronics companies that have focused on connecting everything to the internet.
Ownership of internet-connected smart home devices, from video doorbells to thermostats to light bulbs, increased significantly throughout 2023, according to research from New Morning Consult. Specifically, ownership of internet-connected cameras and door locks increased by 7 and 9 percent. Each has received one point since December, highlighting the importance of safety as a factor in these purchasing decisions.
There is reason to believe that this increase in adoption rates will continue. Smart home devices are getting smarter with the rollout of Matter, a new connectivity protocol that allows devices to work more seamlessly and communicate with each other. This means it will become increasingly easy for consumers to connect new cameras, doorbells, smoke detectors, and other smart speakers to a central hub that integrates their smart home.
Desire for convenience and safety drives adoption of smart home technology
Today's smart home device owners are generally satisfied with their purchases, especially those devices that provide some level of physical security, such as door locks, smoke detectors, surveillance cameras, etc. Owners of internet-connected large appliances (a growing area of smart home technology) are less likely to report satisfaction, perhaps because they see less value in internet connectivity for these products.
This may be rooted in the trends people are looking for when purchasing smart home devices. When asked about their top three reasons for considering purchasing or upgrading to a smart home device, 32% of consumers cited the convenience of smart home technology and 28% said they felt safer with smart devices in their home. I answered that I feel it. Spending more time at home is a key consideration for 25% of consumers, especially as remote work has increased in recent years. Specifically, 30% of remote workers said spending more time at home was the top reason they were considering purchasing a smart home device.
Safety is an important feature of the particular smart home device that consumers are looking to purchase next. A quarter of U.S. adults say they are “absolutely certain” or “very likely” to purchase an Internet-connected security camera within the next 30 days. A similar percentage (24%) gave the same answer regarding doorbells. Purchase consideration for smart home technology is understandably highest among younger consumers (Gen Z adults and Millennials), who are more likely to be early adopters of new technology than older generations.
Gen Z shows a relatively greater interest in security cameras and smart light bulbs, while Millennials lead the pack in considering door locks, thermostats, and large appliances. Compared to younger generations, Millennials are more likely to live in homes and have more space, and even early in the technology adoption cycle, where and how people live will be the next We emphasize that it influences the types of devices that go on your shopping list.
Data privacy and cost are the biggest barriers to purchasing smart home technology
Adoption of smart home technology is on the rise, but there are still significant barriers to purchase. Consumers are reluctant to have devices in their homes that are constantly receiving, monitoring, and transmitting data over the Internet. Data privacy concerns are at the top of the list of reasons why people don't consider purchasing internet-connected smart home devices.
This creates an interesting tension. One of the main reasons why people consider purchasing these devices is that they make them more secure, but they also prioritize the safety of their data. According to Morning Consult analysis, how people feel about data privacy is largely determined by what they do and how their data is used. And while people feel a great deal of ownership over their online data, they make trade-offs every day if they see value in doing so. In this case, consumers must weigh not only literal value, but also the value of convenience and physical security over data privacy. Because cost is the second biggest barrier to purchase consideration.
Underscoring the importance of cost as a barrier, income is a key differentiator in intent to purchase smart home devices. The average purchase consideration rate across devices asked in the survey was 27% for households with annual incomes of $100,000 or more, compared to 20% for households with annual incomes of $50,000 to $99,999. The affordability of smart home devices is likely to increase as internet connectivity in everyday items and appliances becomes the norm, but in a climate of continued inflation and economic uncertainty, compared to more essential purchases. The perceived value of these devices remains an important consideration.
Consumers are not yet supportive of AI integration
The growing popularity of smart home technology has been overshadowed by the ubiquity of artificial intelligence in technology conversations. Excitement about AI reached a fever pitch a few months ago, but optimism about the technology's potential is now rising over its potential impact on everything from jobs to democracy. seems to have been superseded by concerns about AI is already subject to regulation right out of the gate. Consumer concerns about this technology could spill over into other categories as well.
Overall, U.S. adults are not convinced that integrating AI into smart home devices will bring most benefits. In fact, a slightly higher percentage say most have a downside. However, as adoption of these devices increases, we may become more open to the idea that AI could have a positive impact on our smart homes. Owners of at least one smart home device are more likely than non-owners to say that the integration of AI into their technology primarily benefits them. In many cases, virtual assistants like Alexa, Siri, and Google Assistant will inevitably incorporate generative AI models to improve their services, so owners of already popular smart speakers may not even have an option. I don't know.
Consumer electronics companies aiming to become a part of everyone's smart home need to communicate the convenience and safety benefits of these devices that outweigh their perceived drawbacks. Data privacy and cost remain key barriers to further adoption of smart home devices, but economic uncertainty and the emergence of generative AI integration have further complicated the potential privacy and cyber Security risks are becoming more apparent.