Charlotte Ashley reports on a somewhat crowded home automation industry pulling prospective smart home customers in numerous directions, and asks: how do custom installers continue to, and nurture their appeal to consumers?
There’s a change going on in the home automation industry of a late. The change may be gradual, but it’s happening. Five years ago the thought of Amazon, Google or maybe even Facebook (if they go ahead with its plans) have a presence in the home – listening to certain conversations, sitting on your nightstand or perhaps even being the first person you speak to in the morning may have seem a little far-fetched, but today’s it’s a given – though understandably, it’s not for everyone. This wave of change signals an era in which you don’t even have to be a technology manufacturer to target the everyday smart home consumer – still somewhat befuddled by what works with what and what product is actually right for their needs – these days (even IKEA are here).
“I think any kind of awareness to technology in homes is positive, however I feel these kinds of products are very ‘limited' in their capabilities and with many of them working purely on WiFi it could spell trouble,” says Rich Heppell, director of UK-based installer Art of Smart.
He recognises the value of well-made and marketed products, however; “Quality IoT products such as Ring, Nest, Alexa, and Sonos I find fantastic and think have and will continue to fantastic things for the industry. Heppell adds: “They are what I call ‘gateway’ products – of course they don’t create a fully integrated home, but they are giving the homeowners a taste of what they can have, and maybe on their next self-build or next home move when they see a home advertised with fully integrated tech it will make them more inclined to make the next step.”
Heppell notes that in addition to multi-room audio – fuelled in part by the popularity of Sonos and the huge rise in the use and availability of streaming services – it's lighting and security which are driving his business, which he started up in 2017 after working as an electrician. “I believe people are really focused on using technology for their own protection, so aside from clever use of lighting scenes to transform spaces, ‘mockupancy’ when away or at work is often top of clients’ list,” says the installer. Others, such as director of India-based integration firm Sound Sense, Ankur Bhatt, are also finding security to be a big ‘in’ to customers’ homes; “Providing security (at various levels) is common work for us, as well as simplifying home automation to ‘one-touch’ as many find having numerous control devices from multiple vendors for multiple devices confusing, even when dealing with the tech-savvy.”
Room for two
There is certainly room for both consumer-focused and pro-targeted products to live in harmony in the custom installation world, but does a threat exist when it comes to cutting out the installer in the first place? Amazon has been busy in the US – whether that be acquiring security manufacturers (such as Blink and Ring), assembling a team “experts” or neatly packaging the two together in “home security installation packages” (the steepest coming in at $840/€725). It's even taken a leaf out of the CI market and opened up its own Experience Centres/Alexa-powered show homes (currently only in 8 US cities) earlier this month, following on from its partnership with home builder Lennar.
“We want customers to experience a real home environment that showcases the convenience of the Alexa smart home experience, great entertainment available with Prime and Home Services,” said Amazon’s Nish Lathia in a statement. The retail powerhouse has still partnered with CEDIA and even exhibited at its show, in a bid to maintain its collaboration it's focused on, not taking an installer’s business – but time will tell.
Regardless, these experience centres coincidentally arrive on the scene at the same time home automation provider Control4 is steadily acquiring more and more ground in the industry through custom technology neatly packaged with an intuitive interface. These 140 showroom locations benefit by not being limited by location and critically, not limited by technology that isn’t scalable and doesn’t offer margins. “Partnerships have potential, but sometimes fall short,” says Hintze, the company's senior director of product marketing. “Control4 has developed a different approach to show off the smart home; we’ve worked with our international dealerbase to bring certified showrooms to the US, Canada, Europe, South America, China, and Australia.” With the programme, the company hopes to facilitate more collaboration between the installer and builders, designers and homeowners, whether a new build or a retrofit project.
The difference between your Amazon and Control4’s of the industry? Attention to detail. “Control4 has an ecosystem of over 11,700 devices, from hundreds of companies. These partnerships help us to provide the orchestrated smart home experience that works with almost any device, from audio and entertainment, to security, comfort, and even the extraordinary like fireplaces, landscape speakers, hot tubs, and even dog doors.”
On the Amazon and Lennar’s partnership (recently followed by a similar partnership in India), Bhatt says it’s not something to be feared, but embraced – although the question of quality still remains. “Such partnerships can only be beneficial to all that are involved in the industry. Let’s face it, it’s always going to beneficial to make technology cost effective and accessible to more people, but of course, we’d love the focus to be on more skilled installations rather than on price comparisons.” Luka Persic, CEO at ComfortClick, is slightly more sceptical of the outcome; “There have been a lot of different partnerships between big players over the years, none of which resulted in anything really noticeable.”
Taking things up a level
How intrinsic of a part home automation plays in the early stages of home build complex is very much dependant on geography – for example, it may be a given for any new large residential apartment block Dubai, but less so where new builds are few and far between. Yet for those projects that are happening, how can custom installers be on the radar of key decision makers?
“The home builder market will feel the effects of the change toward smart home adoption, especially because, according to the NPD Group Connected Intelligence Home Automation Advisory Service, millennials are twice as likely as the total population to have a smart home product installed in their residence,” says Hintze. “Going forward, every home will have to be smart, as having grown up with technology as a ubiquitous presence in their lives, millennials expect their new homes to be adequately equipped – this is translating to the builder market.”
Persic says it’s not quite as easy as that given that home automation is still very much seen as a luxury. “The main issue here is the return on investment. Currently the costs for home automation are still high, especially in the case of quality systems such as KNX,” he says. “Often home builders are reluctant to go down the home automation path because the initial investment is just too high and won’t pay off in a sense of selling more units faster and for a higher price. Installers can’t do much to help solve this issue as it’s a case of the equipment becoming more affordable so deployment in multiplexes can be more widespread.”
Bhatt says although housing developers are constantly on the lookout for ways to differentiate their homes from the next they “are not willing to dish out additional funds to avail such features” at the moment. But when the market does get there, it’s “cookie-cutter” solutions to suit a number of factors (i.e. geographics, demographics, payscale/savings, children) that are going to be most well-received. “If the worth of such add-ons is appreciated, buyers will pay. Builders will also be able to recognise cost efficiency based on the volume of sales and therefore focus on the technology and installation process.”
Sound Sense project, India
Art of Smart’s Heppell says in the UK particularly he groundwork just isn’t there for companies like his to fully take advantage of opportunities. “Awareness is key. Home builders are oblivious to the needs and demands of the modern home with many still just installing master telephone points – infrastructure into modern homes isn’t difficult to achieve, but is essential for the connected world we live in.” He suggests: “A basic minimum infrastructure standard needs to be developed so an homeowner can move in and contact a professional and choose the technology they desire, or even better, give them choices off-plan and pre-wire homes for these services.”
Michael Short, global residential marketing manager at Crestron, agrees that all parties joining forces early on is necessary: “It’s about entire chain, from start to finish – builders need to be working with installers, designers working with architects.” He adds: “Of course, there are economies of scale when working on MDU projects and huge opportunities to pre-wire for future expansion and upgrades. For integrators to compete it’s about showing you skills and abilities as a trusted partner. Most of the time these projects are huge so having the ability to scale and also support for a long period of time is vital.”
Telecoms add to “confusion”
Telecom providers such as Deutsche Telekom have had a presence on the fringes of the sector for a while, and newcomers such as Vodafone evidently think they can capitalise on growing awareness of home technology products by bundling IoT devices (from Samsung SmartThing’s portfolio) with TV and phone services. It may be convenient, but can these options really compete with a custom system? “Currently, we don’t see telecoms as a threat,” says Hintze. “While these agencies are helpful in driving consumer awareness about the smart home, they cannot provide immersive smart home experiences. Many offering the smart home as a bundle, offering a hub and a few devices – these stick-on devices don’t provide a true smart home experience, and lack the integration of core features.”
ComfortClick’s Persic agrees; “Telecoms’ add to the confusion to the market. One of the main problems of the industry is standardisation, and with so many different systems available and with telecoms launching their own (usually not compatible with standardised systems such as Z-Wave, KNX, etc.) it will only add to the fragmentation of the industry.” How can installers combat this? “They should communicate that good home automation system firstly requires equipment based on one of the industry standards and secondly, that only a good installer can bring together different systems and devices in client’s home.”
How do we propel adoption?
A stat about how much the smart home sector will have grown by 2022 may be music to the ears to be most, but how do we get there? When it comes to price and accessibility, certain worldwide names that will forever stick to ‘cheap and cheerful’ can win out, so the point of clear distinction can only be quality. “The world of CIs remains, for the time being, rather inaccessible to most. They are considered in the minds of most to be expensive and therefore must impart customised services and make the client feel extra special,” affirms Bhatt.
“You would not try to fit a boiler yourself, you use and pay a professional to do so same as your electrics or plumbing. Education is so important and once consumers understand the value in a service they are paying for, they no longer see the cost,” says Crestron’s Short. Hintze adds ongoing maintenance and troubleshooting for devices and the network must be a point of difference when targeting clients, not just the system design and install.
Installers Heppell and Bhatt stressed the importance of greater awareness of what they do so they can stand their own in against other services in the home whilst fighting the reality that a) the upfront cost of hiring them is higher (than that of an electrician, for example) b) the work of a CI covers an extensive timeline and involves the successful collaboration of a number of parties to come to fruition.
“Awareness really is key,” says Heppell. “CEDIA are putting lots of effort in this year and attending all the key home building shows with a consumer facing presence and educating on why people should use a CEDIA member and what benefits that may bring. This is great, but it’s an uphill battle as the homeowner doesn’t know enough about the organisation.” He continues: “If you want a plumber or an electrician you look for members of certain organisations, but if you’re looking for a Home Technology Professional homeowners need educating on why they should be using a CEDIA member.”
“CEDIA members should be proudly displaying their membership and differentiating themselves from the crowd, we may not get the message to the masses of the homeowners for a long time, but we could get it to a point where it’s specified by architects or builders regularly,” he concludes.