smart-home

Smart Homes: A New Marketing Paradigm

  |  June 2, 2014   |  Comments   |  

The rise in popularity of the smart home presents exciting opportunities for marketers to better understand their customers and improve the customer experience.

Imagine you are on vacation and suddenly realize that you left the stove on. You panic for a minute, and then pick up your smartphone and switch off the stove from an app. Welcome to the home of the future, available in the present.

In my last column, I touched on the potential impact of the Internet of Things (IoT) on our lives. The interconnected or smart home is a key component of the IoT revolution. Surprisingly, our homes are more connected than we would think. A recent Forrester study shows that 20 percent of adult American Internet users already have a device at home that connects the physical environment to the Internet. The key reasons people considering using these devices are to cut energy bills (Internet-connected thermostat) and to improve home security (via webcams cameras providing a live video feed from your home to your phone or your computer).

Google's purchase of Nest Labs for $3.2 billion has kicked off a gold rush into the smart home. Apple is rumored to reveal its smart home offering this week that would allow users to turn their iPhones into remotes to control lights, security systems, or even household appliances. No wonder these mega-corporations are betting on this opportunity. The smart home market, according to a recent study by Juniper Research, is estimated to increase from $33 billion in 2013 to $71 billion by 2018!

Although it seems esoteric, smart homes offer marketers very exciting opportunities to understand their customers and improve the customer experience across a number of industries:

1) Real-Time Insights: Its every marketers dream to acquire real-time data about the use of their products and customer preferences. Smart home devices collect a vast amount of data, in order to provide information that will be immediately useful to homeowners. With a clear marketing objective, this data can lead to valuable insights about customer behavior. An example is the Screen-Fridge with an integrated bar code scanner, which can be programmed to send orders to a retailer to reorder a product. Such a device would offer a marketer direct access to individual consumers' consumption patterns, without having to wait for the next Nielsen home-scan report!

2) TiVo-ing Shopping: The integration of "smart" devices will have an impact on people's shopping habits. With preference-based automatic replenishment, the chore side of shopping will be further minimized especially for staple items. For consumers, it would mean less stress from driving to the store. However, it would also mean that visits to physical stores would decline, thus reducing the opportunities for merchandising and delivering an in-store customer experience. Today, Tesco and Duane Reade are testing Bluetooth-enabled devices that can communicate directly with your smartphone to offer coupons for products in-store/online based on your preferences and purchase history.

3) Uber-Personalization: If you thought media fragmentation was high now, in the future it will become even more extreme. That could be the final nail in coffin of mass media or the 30-second commercial. In my opinion, media fragmentation will be an advantage for advertisers since it will allow the "long-tail" concept to realize its full potential. With targeted messages to individuals, not only would the conversions would be higher, but also there would be less waste of advertising dollars.

The smart home market is just beginning to heat up. This trend will change the way consumers shop and will force marketers to relook at the existing marketing model. The question is, are we prepared for this change?

Image via Shutterstock.

Subscribe to ClickZ Asia to receive your weekly dose of the region's latest trends, tips, and insights straight to your inbox.

ClickZ Live Chicago Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!

ABOUT THE AUTHOR

Mandeep Grover

Mandeep has over thirteen years experience of building brands with blue-chip organizations like Johnson & Johnson and Pfizer across FMCG & Medical Device categories. His latest assignment is to launch a newly acquired medical technology start-up business across Asia-Pacific.

Mandeep is a recognized expert in integrating emerging media to drive business results. In 2007, he led the launch of one of the first branded apps on Facebook. The app was a finalist at Cannes and won the highest recognition for marketing excellence in J&J. In 2009, he pioneered the launch of the first iPhone app in J&J, which was featured in the Sydney Morning Herald as an example of innovation.

Mandeep has spoken widely on social media, mobile marketing & multichannel marketing at conferences across Asia-Pacific. He writes regularly for ClickZ and has been a judge for the Australian Marketing Institute (AMI) Awards for Marketing Excellence.

COMMENTSCommenting policy

comments powered by Disqus

Get the ClickZ Marketing newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

IBM: Social Analytics - The Science Behind Social Media Marketing

IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising
If you're considering implementing a marketing attribution model to measure and optimize your programs, this paper is a great introduction. It also includes real-life tips from marketers who have successfully implemented attribution in their organizations.

Resources

Jobs

    • Recent Grads: Customer Service Representative
      Recent Grads: Customer Service Representative (Agora Financial) - BaltimoreAgora Financial, one of the nation's largest independent publishers...
    • Managing Editor
      Managing Editor (Common Sense Publishing) - BaltimoreWE’RE HIRING: WE NEED AN AMAZING EDITOR TO POLISH WORLD-CLASS CONTENT   The Palm...
    • Senior Paid Search & Advertising Manager
      Senior Paid Search & Advertising Manager (Smarty Had A Party) - St. LouisCompany Description: A warm, loving, [slightly wacky] startup, we view...