Five Smart Home Business Models that are Transforming the Industryby Adilin Beatrice January 22, 2021
Five Smart Home Business Models that are Transforming the Industry
The smart home industry has become the hot topic in recent years. The decade’s long dream of building a fully automated home with advanced smart home technology is already around the corner. When the sector is seeing a dramatic bloom, it is mandatory for companies working with smart home technology to construct efficient business models that will further trigger people to adopt the futuristic views.
A smart home is a home that is equipped with highly advanced automatic systems that enable occupants to remotely control or program most of the automated devices installed in the house. It also facilitates owners to monitor and manage smart technologies even when they are not around. The smart home market is growing at an exponential rate. According to IDC, an estimated 854 million smart home devices were shipped worldwide in 2020 alone. Earlier, PwC has predicted that the market as a whole could be worth almost US$150 billion globally by 2020, representing 35% average annual growth over this period.
However, the truly interconnected smart home where devices interact with each other is a long way from here. The smart home market often addresses issues like data security and interoperability, but less is spoken about the smart home business models. The traditional business models in smart home sector won’t cover consumers the way it works in other industries. In order to attract more users, smart home technology providers have to acknowledge the customers’ needs and leverage relative business models which best suit them. Alexander Osterwalder in his book ‘Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers’ defined business model as the rationale of how an organisation creates, delivers, and captures value. In smart home products, focusing on capturing and delivering value and leveraging unique characteristics to fulfill customer needs are a couple of mandatory things that a business model must carry. The emerging business models come with new innovative strategies that point the way for the most dynamic of markets. Analytics Insight has found a list of smart home business models that will make smart home technology providers win the race.
The IoT and SoT effect
Support of Things (SoT) helps shape the future of smart home industry. Support of IoT-related products, as well as the services and apps that enable smart things to function in smart home networks are revolutionizing smart home in many ways. IoT devices trigger a new range of challenges over the complexity of data. It creates a need to install a staggering quantity of connected devices and resolve multi-layered technical issues. Henceforth, SoT business model acknowledge the setbacks and innovative technologies like visual support, deep learning-powered automation, smart sensors and predictive support to better engage in customer service operations.
Linking home devices to green energy tariffs
With smart home technology at its core, the market plans to dissolve climate change, global warming and renewable energy issues. To leverage the facility to an advanced level, smart home technology providers are working on linking connected home products with new green energy tariffs. For example, the service providers will make consumers sign a special energy tariff, while also giving a voucher for a smart home starter pack.
Personalisation at the core
Experts alarm smart home technology providers to be prepared for a future that has personalised devices. These customised products create a unique user experience through engaging content and social media with smart devices. By merging data into smart home appliances, the companies will get the opportunity to provide specific service as per the customers’ need. Companies can also provide access to social network-powered communities that generate positive experience feedback and share helpful tips and product recommendations.
A futuristic IoT business model that will take over the smart home industry in future is the pay-per-usage way. Smart home technology providers will imply sensors on the home appliances and monitor the customer’s environment and how much they use the product. This opens the opportunity for smart home technology providers to charge consumers for the time they are actively interacting with the device. This business model will be effective, economic and consumer-friendly.
One of the major issues that smart home technology providers are working on is to reduce customer churn by leveraging optimistic connected home products. The opportunity to create new possibilities by aggregating new data points and sources is also considerable. For example, a major European unity has achieved a significant drop in churn after providing smart thermostats to existing customers. By availing the consumer data in the right way, the smart home technology provider gets a chance to facilitate the most disruptive connected home business.