Ownership of smart devices has more than doubled in the last two years, with households expected to spend £10.8 billion on smart tech in 2019.
Findings from a new disrupting utilities survey by consultants PwC, which looked at UK consumer attitudes to smart technology, indicate the growing market could be increasingly lucrative for energy suppliers.
PwC’s first consumer survey was released in May 2016, followed by a business focused survey in 2017.
Since 2016, the survey shows buying intentions are gradually improving with around 30 per cent of people (14 per cent in 2016) planning to purchase a smart device for the home in the next two years.
The survey also reveals almost 40 per cent of people are now entering the connected home market via smart entertainment devices. With the advent of central systems that can connect and control other smart devices, and more affordable technology, it appears the penetration rate of devices could double by 2020.
Ronan O’Regan PwC’s digital utilities leader, said: “The indifference we encountered in 2016 to the ‘Internet of Things’ energy revolution in the home has changed for many households.
“While smart home assistants are relatively new to the market, we believe they could potentially be the ‘glue’ towards wider adoption. You could say they are having an ‘iPhone effect’ in the market.
“Crucially for energy suppliers, smart home assistants are increasingly acting as a springboard to other smart purchases from heating and lighting to smart appliances.”
While tech giants are already creating products that capture data to provide differentiating insights and a seamless user experience, traditional suppliers are increasingly turning attention to converting smart home tech into a sustainable revenue stream. For example, British Gas’ Hive is challenging Google’s Nest, while security firm ADT is using smart devices to augment their services.
But consumer trust among younger customers could become a barrier for energy suppliers. Since 2016, levels of trust have almost doubled across the board, with energy companies (60 per cent in 2018 compared to 34 per cent in 2016) still the most trusted.
Crucially, as devices evolve and revolutionise the home, young people are not only more likely to adopt smart devices but they also trust tech companies (67 per cent) more than energy companies (60 per cent) to supply and install them.
“Trust could become a major battleground for traditional players over the next few years. While trust rates overall have almost doubled, our survey shows that young people, who are more likely to adopt smart devices, lean more towards tech companies. If energy suppliers are to maintain their most trusted position, they need to ensure their propositions engage the younger market,” explained PwC energy leader Steve Jennings.
“Traditional players are no longer able to win consumers hearts and loyalty by offering a standalone product. With a bigger shift toward customer experience and growing consumer expectations, they need to think more broadly around where threats can come from and how they can innovate, including the way they use data to deliver service offerings and better customer propositions.”