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Smartwares: Get Smart!

The home furnishings industry is seizing the opportunities presented by smartwares
Posted on November 5, 2015 by David Gill

By David Gill

Nest thermostatNest is one of the key hubs that controls smart products, including thermostats (seen here), appliances, lighting and security products. nest.com
Smartwares, or the Internet of Things, have become both the present and the future of our lives.

An abundance of consumer research has shown that consumers are already participating in the smartwares revolution. In exclusive research conducted earlier this year by HFN, 6 percent of consumers said they currently monitor their home’s smoke and carbon monoxide detectors through their smartphones. Three percent control their coffeemakers through a mobile device, and another 1 percent use a smartphone or tablet to operate their slow cookers, vacuum cleaners, toasters or espresso makers.

Other surveys show that these figures are only going to grow in the years to come, and fast. Over the next five years, according to business research firm IHS, the global smart connected white-goods market is expected to grow at a five-year compound annual growth rate of 134 percent—from fewer than 1 million units shipped in 2014 to more than 223 million units by 2020.

That unit number covers just major appliances. Factor in coffeemakers, robot vacuums, rice cookers, microwave ovens, air purifiers and even electric toothbrushes, and that shipment number will reach 700 million by 2020, IHS said.

Perry Reynolds“We have indications that the housewares industry is moving ahead to develop products employing these technologies.” - Perry Reynolds, IHA
One more set of numbers: In its 2015 State of the Smart Home Report, Icontrol Networks, a provider of connected-home security products, found “a rise in the level of excitement about the smart home, with millennials (79 percent) and parents (76 percent) leading the pack, and 50 percent of the overall population excited about the technology.” Some 54 percent of consumers say they plan to buy at least one smart home product in the next year, Icontrol said.

Icontrol is the provider of Piper, the network hub for home security products. There are a multitude of hubs now available for control of a variety of smartwares—some of the more notable ones being Google’s Nest, which works with lighting, appliances and garage doors; Wink, owned by Quirky, which recently filed for Chapter 11 bankruptcy protection and which has agreed to sell Wink to Flextronix; Insteon, which controls climate, lighting and security systems in both homes and offices; SmartThings, a home monitoring hub and application; Logitech Harmony, which controls home entertainment devices; Homey, a voice-activated system that controls all smart devices; Lutron Smart Bridge, which controls lighting and shades; Revolv Smart Home Solutions, which controls home environment products and which was acquired by Nest last year; Phillips Hue, a smart lighting system; and Iris, Lowe’s proprietary smart home control system.

Currently, according to a Harris Poll conducted on consumer awareness of smart products, the most popular smart devices consumers own are wireless speaker systems, smart thermostats and home security and monitoring systems. At the same time, manufacturers of housewares have entered the category with cooking products and home environment products. “We have indications that the housewares industry is moving ahead to develop products employing these technologies,” said Perry Reynolds, vice president of global business development for the International Housewares Association. Reynolds added that the association expects many new smart products to be on display at the next International Home + Housewares Show in March 2016.

Dan Fulmer“Now we’re seeing prices come down. Manufacturers have been developing products at less cost with newer systems.” - Dan Fulmer, Fultech
Manufacturers are clearly aware of the extra business smartwares can bring to them. In cooking, “there is great potential as more connected products enter the kitchen,” said Todd Larrabee, senior business development manager for the Behmor brand of Boyd’s Coffee. “Recipes, sharing, even maintenance and product support can increase with connected products.”

This is not to say that the industry as a whole is moving helter-skelter into the Internet of Things. “Everybody’s racing to jump on the bandwagon, but we’re taking a more cautious approach,” said Evan Dash, CEO of StoreBound. “We’re developing products and features that help people make simple meals, and smart features tend to complicate the technology, so we’re developing the means to keep it simple.”

Retailers have also been moving toward the smart revolution at a measured pace. “At retail, smart products seem to be still at the early adopter or hobbyist stage,” said Andre Lalande, director and general manager of the subscription broadcast division of URC, a manufacturer of home automation systems. Lalande credited Best Buy for taking a leadership position among retailers in merchandising smartwares (see “Best Buy: Smart Connections,” page 22). Others seem to be trying to catch up.

There are also issues to resolve before both manufacturers and retailers swing fully into action on smartwares, the first of these being cost. HFN’s research showed that while many consumers would like to have control over home products, most consumers would not pay extra for them. Fifty-three percent of the consumers surveyed said they would not pay more for a smart coffeemaker or espresso maker, 64 percent would not pay more for a smart toaster and 57 percent would not pay more for a smart vacuum cleaner.

The resolution to the price issue may well be in sight, according to Dan Fulmer, founder and CEO of Fultech Solutions, a maker of residential and commercial automation systems. “This is our 20th year in the business, and smart features have been available, but they have been pricey,” Fulmer said. “Now we’re seeing prices come down. Manufacturers have been developing products at less cost with newer systems.”

A much more serious issue is consumers’ perceptions that a smart home may not necessarily be a safer home. Two concerns that emerged from HFN’s research, based on comments from responding consumers, were “people being able to hack into your personal life and the need for Wi-Fi or electricity for it to work” and “I would worry about someone else being able to access my information.”

“There are a huge amount of pitfalls from the safety and security standpoint,” Dash said. “People could gain access to your home network and do a lot of damage. Turning on an appliance early in the day can cause a fire, but the issue is bigger from the damage hackers can cause. We are working to develop the means to keep these products simple and make them secure.”

Fulmer, who serves on the Technology Home Board of the Consumer Electronics Association (CEA) said, “People are aware about the dangers of hacking from all of the news stories about websites getting hacked into. Now we’re even seeing places getting hacked into for practical jokes, not just for profit.”

The CEA Technology Home Board is working to resolve this issue. “We’re developing a best-practices white paper,” Fulmer said. “It boils down to basic stuff, like having a professional installer doing this in your home. These best practices will apply to both consumers and manufacturers.”

Ben Artis, senior category manager, connected home for Whirlpool Corp., said his company ensures customers know exactly how their data is used and, more importantly, how it is used for their benefit. “For instance, information from the appliance can help reduce or eliminate service issues,” he said. “If the appliance detects a simple issue, such as an out of balance load in the washing machine, consumers will receive a helpful notification on their phone that not only explains the issue but also shows them a short video on how to resolve it, thus eliminating the need to call the support line for help. In the event that consumers do need to call for service, Whirlpool’s smart appliances support remote diagnostics which help call centers identify the problem remotely, leading to faster resolution of the issue. “(Turn to “Large Appliances Get Smarter,” page 18)

Nevertheless, the issues of both safety and convenience need to be addressed by manufacturers developing smartwares, according to Cheri Wright, senior marketing director of home environment products and consumer relations at Helen of Troy. “Those involved in smart product design need to apply careful thought to how the products will be used in the home,” Wright said. “Safety and ease of use must be at the forefront of all product design. Anticipating unmet needs and developing solutions to address those needs is important with any design effort, regardless of whether we are creating traditional or smart products.”

So—aside from the extra issue of whether or not someone can hack into a home network and steal all sorts of personal data—developing smartwares isn’t all that different from developing non-smartwares. It comes down to what consumers want and need.

This may be something that some vendors may have to work hard to keep in mind. “Manufacturers are so zeroed in on the technology that they forget to focus on individual consumers’ needs and wants,” Lalande said.

And what do consumers need and want from smartwares? Convenience? Security? Safety? Lalande replied: “All of the above.”