Consumers 'ho-hum' about home automation?

LOS GATOS, Calif.—Advances in connected home technology were all the buzz at ISC West 2015, and recent studies point to a boom, too, but an alternative report from Argus Insights suggests that the big buzz is overrated. The market is stalling and may even be shrinking, it says.

The June report, “Connected Home or Ho-Hum?” says that consumer demand for connected home products dropped 15 percent in May of this year from May 2014 and is continuing to decline. The report is based on analyses of online consumer reviews.

“Every category is slowing down, especially with security cameras,” John Feland, CEO of Argus Insights, told Security Systems News. The study also looked at energy monitors, sensors, locks, smartbells and smart lightbulbs, among other devices.

“Consumers are not seeing the value yet from these home automation devices,” he said.

Argus, a Silicon Valley-based consumer monitoring company that Feland founded in 2011, analyzes consumer reviews worldwide to measure how products satisfy market demand. For this study, Argus studied 80,000 consumer reviews for cameras and 200,000 consumer reviews for home automation data, all since January 2013.

“We're like a focus group that never goes home,” Feland said.

In looking into the IoT, Argus found that although the connected home market grew throughout 2014, it's now “on a downward slide. Every category is going down, especially with security cameras,” Feland said. That's because of connectivity and installation flaws and the “lack of innovation to intrigue new consumers,” he said.

Early adopters have bought what they want and may be satisfied, but consumers who received connected home kits over the holidays, in general, don't like them. “There are setup and design problems,” he said.

Even the entrance of Google, Samsung and other big players into the connected home market hasn't done much to pique consumers' interest, Feland said.

Consumer dissatisfaction with home automation goes beyond DIY kits, Feland said. It has been noted even with big-name installers. Consumers are stepping back from the products in the short term—those who are buying say they like the products, but not as much as they did before, he said.

So what's the lesson here for resi dealers? “So far the promise of home automation hasn't been kept. Fear and novelty drive short-term blips, but that's no way to sustain the market,” Feland said.

An aesthetically pleasing design is part—but only a small part—of the problem, he said.

“People want easier-to-use products. You have to give customers success in the first five minutes,” he said.

Feland, who has a degree in mechanical engineering from MIT and a master's and doctoral degree from Stanford University, acknowledges that his company's home automation study, based on nontraditional, consumer-based methodology, “may be a lone voice in the wilderness.”

Other studies come from traditional market forecasts, he said, and that classically leads to optimism.

“We may be wrong, I hope we're wrong. We want the smart home market to grow, but there are some serious issues to be considered,” he said.