What Should We Make of Smart Appliance Adoption?
Research firm Parks Associates is in the midst of drumming up all kinds of interest and excitement around its upcoming CONNECTIONS conference, which is scheduled to run May 21-23 out in San Francisco. The show itself, which is worthy of a discussion of its own, focuses on the connected home and all sorts of trends and strategies that brands can learn from and execute on. Either way, in its regular email promotions, I came across a stat that made me stop and think a little bit: According to a recent Parks study, 12 percent of U.S. broadband connected households report owning a smart major appliance.
What do we make of that figure?
So, roughly one-in-10 internet-connected households throughout the country has a smart fridge, connected washer/dryer, or the like. My initial gut reaction to that number is that it’s very low. Smart appliances have been appearing at shows like IFA, CEDIA, and CES for a number of years now, and we’re also starting to see them make waves at homebuilding and home furnishing shows like KBIS, ICFF, and more. That tells me that the industry is very aware of and educated on smart appliances, but they haven’t been able to translate that to actual sales with consumers.
On a smaller level, Parks has found that consumers are very aware of and willing to adopt other connected home devices. According to their “Technology Convergence and the Smart Home” report, the average consumer owns more than 10 connected devices, which could include things like connected health devices, smart speakers, smart switches, home security devices, and more. So there’s certainly an interest in the smart home space.
The problem with adoption in the major appliances space, though, may have nothing to do with interest or awareness. Rather, it likely boils down to the nature of the industry.
“Appliances typically have a ‘need in’ vs. ‘want in’ replacement cycle. Industry data suggests that the current ‘want in’ rate for appliances is at eight percent,” Patrick Maloney, Senior Vice President of Appliances for the Nationwide Marketing Group, told Dealerscope when asked about the take-up rate of smart appliances. “The offerings in connected appliances have yet to provide enough lift in demand to accelerate the growth of this segment of the business.”
Gerald Satoren, executive director of the NATM Buying Corp., agreed, saying that while smart appliances are gaining some momentum at the consumer level, it’s not to a degree that he would consider significant. What’s holding growth back, he said, is the fact that consumer’s aren’t seeing enough added value in the smart appliance range yet that would justify spending the extra money on these top-of-the-line products.
“I believe the manufacturer that can get ‘smart’ positioned correctly the soonest will be rewarded by the discretionary purchaser as well as by the duress purchaser who maybe deciding to jump up a price-point or two when replacing their broken appliance,” Satoren said.
So while the rate of adoption for smart appliances continues to lag behind the rest of the connected home segment, retailers and manufacturers should know that it’s not for a lack of awareness. Consumers are either waiting for the right time to make the jump up—likely when their current appliance putters out. But, as Satoren suggests, they may be able to help their own cause by expanding the “smart” capabilities to other products in their appliance suite, and not limiting them to the higher-end models.