Investment is pouring into the Smart Home. But is ‘the home of the future’ really viable when it’s just a bunch of Internet-connected appliances?
The so-called “Smart Home” market— that is, replacing your current in-home appliances and products with an Internet connected version—is ripe. At least, insofar as it is forecasted for significant and rapid growth—$121B in just five years (!) Meanwhile, the reality today is that only about 1 in 10 Americans report owning Smart Home device. Despite tremendous activity and investment amongst home product manufacturers, telecom providers, retailers, and other service providers, there lies a significant gap.
The lack of and requirement for INTEROPERABILITY is at once the greatest barrier and opportunity for adoption of Smart Home technology and lifestyle.
Respondents echoed this in a recent study, reporting that the fragmented nature of Smart Home technology is their greatest barrier to adoption. Indeed, restraints and adoption barriers are numerous, as outlined in my latest research report. This is the most critical area for all Smart Home constituents to address, because it is rich with impacts that touch every element of architecture and adoption—technological, sociological, and experiential. So why is interoperability so important to the Smart Home?
The answer to this lies in understanding its role throughout the lifecycle of customer-product interactions.
- Design & Installation: Where Interoperability Sets the Tone
The very design of connected products requires interoperability in terms of connectivity, communications, and integration protocol. Products should be simple to connect. Period. Despite the reality of a painful lack of standards across devices and industries, the need to equip physical products with connectivity and communications flexibility sets both an immediate and long-term value proposition in place:
- In the short term, users can easily and more rapidly ‘plug and play’ (or at least configure with minimal effort) new products. Installation isn’t just about the green light coming on, installation sets the tone for the entire product experience. In the Smart Home, a space driven more (today) by whiz-bang gadgets, comparatively high(er) price points, and myriad security and privacy apprehensions—versus relieving chronic user pain points— simplicity in implementation is even more important.
- Over time, embedding capabilities into the device that allow it to “play nice” with other devices enhances the compoundable value the product can receive via over-the-air updates and interaction with other devices.
This ability—to extend the product’s utility over time, instead of depreciate it—is central to data-driven business and service models made possible through connected products. Although such windows may not be open ‘out of the box,’ creating the windows for extensible, secure information exchange begins in the design phase.
- User Experience & Service: Where Interoperability is what Actually Delivers Value
Consider the potential improvement to user experience when objects and services work harmoniously. A water heater is showing signals of faltering—the mean temperature of the device has been decreasing three times it’s typical variation for 24 hours. The heater sends an alert to the homeowner’s mobile app as well as her Amazon Echo. Integrated with a central dashboard is an application providing a marketplace of pre-screened, local, professionals. With the click of a button, the user can select an available plumber, electrician, specialist, solicit a price quote, and order the service directly from the app. That the water heater’s sensor data is integrated with the app allows the technician to arrive equipped with data-driven context and (as best he or she can tell,) the appropriate tools for the job.
This is but one small example, yet illustrates the wide reaching value interoperability enables; not just to the manufacturer of that pipe, but to the homeowner, to the service provider, to the repair person, and so on. Ideally, the issue is repaired before damage or significant discomfort occurs, local service providers gain a share of the work, and the manufacturer supports an overall better, more reliable customer experience and ongoing relationship.
The lack of interoperability has a direct and distinct impact on user experience, both at the technical and emotional level.
At the technical level, consumers desire ease of use, seamlessness across platforms and services, with every interaction. As manufacturers offer devices with significant embedded technology, they must consider power source and lifecycle, connected and unconnected control, troubleshooting and other technology-related issues when designing connected products. When consumers have to use dozens of different applications to control each of their connected devices, the user experience of one device is muddled by the experience of the disjointed nature of the entire Smart Home experience. As modes of user experience and interaction evolve, from touch to voice to gesture recognition for instance, interoperability becomes even more important. Design for usability, not spectacle.
From an emotional standpoint, the Smart Home space is unique. Our homes are our most personal realms; they are also often the most valuable asset we have. In this context, connected devices face a dual challenge to be both reliable and ‘worth it,’ but also respectfully invisible. Interoperability enables both of these, but not without having to navigate (read: design for) some complex sociological concerns. Shifting from analogue to connected products for critical in-home services evokes uncertainty. If connected products only work when connected to the Internet, or need to always be plugged into the wall, what happens when the power goes out or Internet connection fails?
That our ‘traditional’/ ‘dumb’ in-home objects—our analog coffee-makers, door locks, thermostats, lamps, etc.— really aren’t all that awful or inconvenient today, means that there really has to be significant improvement in the experience to justify investment in “smart” versions.
Without interoperability, singular Smart Home devices are solutions looking for problems.
The ability for objects to communicate with each other helps justify the value because it provides users greater insight, control, and convenience across each of the areas in which we use (and have always used) technology in the home:
- Safety and protection
- Energy management
- Convenience, health and comfort
These needs are constant, and synonymous with the Home. The opportunity for consumers and providers alike is enhancing the service experience of each through deeper insight, reliability, and invisibility.
- Device Lifecycle & Ecosystem Innovation: Where Interoperability Drives Transformation
Interoperability isn’t just important for day-to-day user experience of connected products, but for the longer term experience and value relative to all devices inside and beyond the home. Information about the lifecycle of interactions between product and customer is what drives ongoing innovation, both at the device level and across the ecosystem that sustains it.
At the device lifecycle level, having a source of ongoing, real-time information often unlocks an entirely new universe of information for for manufacturers. A manufacturer of an analog garage door opener, for instance, knows little more about the product or the customer beyond the point of purchase—a purchase made once every 10-15 years. With the advent of product data, a connected garage door opener manufacturer gains unprecedented visibility…
- Frequency of product interaction
- Frequency of product malfunction
- Uptime and downtime
- Mobile app usage patterns
- Product service needs
- User context
- Customer/account relationship history
- Opportunities to upgrade, update, upsell
Of course, the innovation isn’t collecting these data, it’s in using them to improve and inform every phase of the customer’s journey. This is where the need to interoperate and communicate the right information to the right constituencies is strategic. After all, customers don’t just interact with single manufacturers; the modern customer journey necessarily involves ecosystem constituents beyond the manufacturer of the product.
Open integration and interoperability is really about curating a customer-first relationship.
Key questions to drive innovation must span the customer journey. How do we use product data to…
- Improve marketing strategy, collateral, spend
- Improve purchasing, transaction, registration experience
- Improve hardware and/or firmware design
- Improve functionality, eliminate unused features, or introduce new ones
- Improve software development process
- Improve service delivery infrastructure and experience
- Improve sourcing or distribution infrastructure
- Improve sales experience, customer retention, loyalty
- Inspire and incentivize new partnerships
Interoperability across these constituents is where compounded value emerges for consumers using the products, for service providers in search of new demographics, for connectivity providers wanting to grow market share, for business analysts mining the data…
Understanding how the product interacts, not just with users, but with other devices, appliances, power sources, platforms, applications, service providers, etc. is wherein lie the deepest opportunities for innovation.
Interoperability is key to Smart Home adoption because it is ultimately what sets any ‘analog’ in-home object apart from a ‘smart’ counterpart. ‘Smartness’ is not a function of adding a sensor to a thermostat or any other device; it is a function of the broader context this thermostat delivers and leverages for to improve its own function. Ultimately, it is what delivers value beyond the point of purchase and beyond the device itself, not just for the manufacturer and the ecosystem at large, but more importantly, for the consumer.