Smart home technology - Internet of Things or Indifference to Things? - PwC survey

• PwC survey demonstrates the need for attractive consumer energy offers to engage consumers in the connected home
• 81% of people with smart heating devices notice a positive impact in the daily running of their homes
• 72% of people say they are unlikely to introduce smart home technology in the next two to five years and are unwilling to pay for it

A new survey by PwC lays bare the general lack of consumer interest in smart home tech and the battle companies must face if they are to shift attitudes and spearhead the hotly anticipated ‘Internet of Things’ energy revolution in the home.

According to a UK survey of over 2,000 households, the majority of people (av.72%) are not currently interested in buying smart home technologies such as smart heating systems, plugs, appliances, lighting, renewable energy devices or automated cleaning appliances over the next two to five years.

However, the research shows that for those who already own a smart device, the impact in the day to day running of their homes is clear: 81% notice a positive impact from smart heating with over 95% already seeing the benefits from their smart appliances, such as ovens that download recipes and fridges.

Keeping up with the Joneses? Only if it pays.

The survey reveals that financial incentives, such as paybacks through a reduction in energy bills (35%) or free supply and installation (37%), are more likely to sway consumers to adopt smart energy technologies than a desire to manage energy usage via an app (9%) or to keep up with ‘tech-tastic’ friends and family (6%).

PwC believes it takes on average between six to eight years for a tech revolution such as broadband or smart phones to become ‘the norm’, meaning suppliers have a short timeframe in which to win the hearts and minds of consumers and turn smart energy tech into a sustainable revenue stream.

Steve Jennings, UK Power and Utilities leader, PwC, commented:

“Momentum is continuing to build in the connected home market and we believe smart energy will have a key role to play. However, it’s clear from our survey that if suppliers and new market entrants are to win over consumers, they will need to develop propositions that not only cut through what appears to be a perceived complex technology challenge but address the reluctance of consumers to fund the introduction of many of these smart energy tech products into their homes.

“Companies which can swiftly adapt their offers and marketing to meet the needs of this market, recognising the range of demographics and buyer behaviours, will be the front runners - not the also rans - as smart energy tech becomes significantly more commonplace over the next six to eight years.”

What’s hot and what’s not…and how can firms change perceptions?

Of the products now available on the high street or via energy/ tech firms, smart plugs, lighting or heating systems are the most likely tech tools to tempt householders. Conversely, smart air conditioning (79%), smart appliances (78%) and robotic cleaners (77%) appear to be the least likely purchases.

When it comes to renewable energy devices such as solar panels, three times as many people over 56 years old are likely to own systems than the 18-25 age group. However, 33% of 18-25 year olds and 28% of 26 – 35 year olds are considering investing in this technology, perhaps as they get on or move up the housing ladder.

Should our respondents be persuaded to invest in new smart energy tech in future, on average only three in 10 people (29%) are confident they could install or set the devices up themselves. And when it comes to which professionals they would ask for assistance, there is no strong frontrunner.

While 34% of people would rely on their energy company, 28% would call smart tech developers or telecoms firms with one in ten trusting a high street retailer to provide support. The only place to buck this trend is Northern Ireland, with 36% of people preferring to get help from data specialists rather than energy providers (32%).

Richard Hepworth, head of digital utilities at PwC, said:

“While people have been quick to embrace smart tech lifestyle products such as phones and tablets, many still don’t really understand the range of smart energy products on offer and the potential they have to ease their busy lives in a practical way or even reduce their energy bills. And therein lies the challenge – how can companies change this lack of knowledge into real know-how?

“In many cases, when data driven disrupters have hit other sectors, such as the mobile phone or home entertainment sectors, we’ve seen a change in market leader as the tipping point is reached. To date, the ‘big 6’ energy firms have managed to weather market storms, bring new technologies like Hive and Nest thermostats to market. With the respondents to our survey stating they would be just as happy to deal with retailers, telecom firms and smart tech developers, the gauntlet has certainly been thrown down.

“With real opportunities around smart thermostats, for example– a potential entry level to other smart energy tech for households – energy suppliers have clear ground they can build on in this market. How they react now could define their success as this growing smart energy revolution takes hold.”

Ends

About the research - PwC commissioned a survey of 2006 UK adults during February 2016, who either rent, have a mortgage or own their home outright.