Connected Home: Two Thirds of Interested Consumers are Also Willing to Buy
European consumers are increasingly interested in Connected Home Services, and those interested have a high willingness to buy, says a consumer study commissioned by Solon Management Consulting.
The combination of these two factors turns Connected Home into an interesting growth market. Both telecommunications companies and utilities are well-positioned to develop Connected Home into a mass market by bundling new services in the areas of home entertainment, home monitoring, home energy and health with their existing products.
The Solon survey has found that willingness to buy is highest for home entertainment with 40 percent of consumers surveyed, while ranging between 25 and 35 percent for the other three service areas. The difference between the highest and lowest willingness to buy services is likely to be partly influenced by the marketing of such services to-date with entertainment products receiving wider marketing attention than other products. When you consider the conversion rate from "interested" to "likely to purchase", between two thirds and three quarters of consumers are willing to buy.
"This proves the strong market potential for Connected Home Services as well as demonstrating clearly that vendors still have to educate the consumer on possible applications and benefits of the Connected Home. The gap between already existing usage and general interest in such services is widest in the 35 to 54 age group. That is right in the bracket that also has the highest spending power," said Marc Sier, Managing Director at Solon Management Consulting.
While home entertainment with online video services and music streaming is being used by up to 26 percent of respondents and is already clearly developing into a mass market, health services, energy management and home monitoring still need to be established as Connected Home applications: their current usage in the markets surveyed is only half or even a quarter as high as for home entertainment services.
According to the Solon study, telecommunication providers and utilities are in a particularly strong position to take advantage of the emerging market opportunities, as consumers prefer to buy Connected Home services from them (55 and 32 percent respectively), while putting less trust into pure play online vendors (10 percent).
"Clearly, consumers rather rely on companies that combine strong brands with a local service infrastructure that can take care of installation and troubleshooting if required. The interesting thing is that purchase intention is almost twice as high for consumers who already use bundled products. This shows the potential to build on established customer relationships in order to sell Connected Home Services as an additional product and part of a multi-play offer and thereby increase the average revenue per user and customer loyalty at the same time", comments Sier on this result.
For the study, representative samples of 1,000 consumers each were surveyed in Germany, the United Kingdom, Poland, Spain and, for comparison, in the United States.