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The Connected Home: Inc Impact of COVID-19 - UK - June 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Products covered in this Report
EXECUTIVE SUMMARY
The market
Growth in interest in voice control
Privacy breaches could impact sales of smart home devices
Zigbee Alliance starts connected home partnership with Google, Apple and Amazon
Impact of COVID-19 on the connected home
Figure 1: Expected impact of COVID-19 on the connected home, short, medium and long term, 19 May 2020
Companies and Brands
Google releases Nest Hub and Nest Hub Max
Facebook launches redesigned Portal, Portal TV and Portal Mini
Amazon announces third-generation Echo range
Amazon Echo maintains dominance of voice-controlled speaker market
The consumer
Growth in voice-controlled speakers 
Figure 2: Ownership of connected home devices, March 2020
Smart security ownership stays level despite consumer intent
Figure 3: Interest in purchasing smart home devices, March 2020
Over four in 10 smart speaker owners keep their devices muted
Figure 4: Privacy and shopping with a voice-controlled speaker and ownership of speakers with a display, March 2020
Over eight in 10 smart security owners feel more secure
Figure 5: Feeling more secure due to smart security devices, March 2020
Consumers also show interest in monitoring deliveries into their home
Figure 6: Buying smart security bundles and monitoring deliveries into the home, March 2020
Privacy and cost are barriers to adoption of smart home products
Figure 7: Factors restricting smart home purchases, March 2020
What we think
IMPACT OF COVID-19 ON THE CONNECTED HOME SECTOR
 Short, medium and long-term impact
Figure 8: Expected impact of COVID-19 on connected home, short, medium and long-term, 30 June 2020
Opportunities and Threats
Developing use cases for mindfulness apps and smart speakers
Facebook Portal ideally placed to capitalise on the video chat boom
Smart speaker growth could provide opportunities to boost voice commerce
Using tracking features to monitor device usage
Deeper integration between voice assistants and other smart home systems
Impact on the market
COVID-19 to drive bigger gap between voice-controlled speakers and other smart home items
Shifts in consumer behaviour
Move to ecommerce should not have a significant effect on smart home purchases
Impact on consumer segments
Younger generations could hold off on purchases
Older generations could choose now to buy smart displays
How a COVID-19 recession will reshape the market
Consumers’ concerns over their finances continue
Figure 9: Changes in financial situation since the start of the COVID-19 outbreak, 21-28 May 2020
Impact on the marketing mix
Manufacturers offer discounts to increase smart home adoption
Facebook could offer an entry level smart speaker to compete with Amazon and Google
Highlighting the use cases for voice-controlled speakers during lockdown
COVID-19: Market context
ISSUES AND INSIGHTS
Developing mindfulness programs for voice-controlled speakers during the COVID-19 pandemic
The facts
The implications
Potential growth in smart delivery boxes for the home
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Growth in interest in voice control
Privacy breaches likely to reduce sales of smart home devices
Zigbee Alliance starts connected home partnership with Google, Apple and Amazon
MARKET DRIVERS
Growth in interest in voice control
Privacy breaches could impact sales of smart home devices
Xiaomi and Google devices under scrutiny
KeyWe smart lock
Zigbee Alliance starts connected home partnership with Google, Apple and Amazon
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Google releases Nest Hub and Nest Hub Max
Facebook launches redesigned Portal, Portal TV and Portal Mini
Amazon announces third-generation Echo range
Ring unveils Ring Alarm, Indoor Cam and Stick Up Cam
IKEA and Sonos partnership continues with bookshelf and lamp speakers
Amazon Echo maintains dominance of voice-controlled speaker market
LAUNCH ACTIVITY AND INNOVATION
Google releases Nest Hub and Nest Hub Max
Facebook launches redesigned Portal with new Portal TV and Portal Mini
Amazon announces third-generation Echo range
Ring unveils Ring Alarm, Indoor Cam and Stick Up Cam
IKEA and Sonos partnership continues with bookshelf and lamp speakers
Google unveils Google Wi-Fi successor in Nest Wi-Fi
Master Lock releases biometric padlock for garages and sheds
Hive releases Radiator Valve to manage heating in different rooms
ADVERTISING AND MARKETING ACTIVITY
Facebook invests heavily in advertising Portal line-up in 2019
Apple’s advertising spend drops
Ring leads spend for smart security
Figure 10: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, by category, 2017-19
Figure 11: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, Top 10, 2019
Figure 12: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, by share, 2019
Nielsen Ad Intel coverage
BRAND OWNERSHIP – VOICE-CONTROLLED SPEAKERS
Amazon Echo maintains dominance of voice-controlled speaker market
Figure 13: Type of voice-controlled speaker owned, March 2020
THE CONSUMER – WHAT YOU NEED TO KNOW
Growth in voice-controlled speakers
Smart security ownership stays level despite consumer intent
Half of consumers with voice-controlled speakers open to using it for shopping
Over four in 10 smart speaker owners keep their devices muted
Over eight in 10 smart security owners feel more secure
Consumers also show interest in monitoring deliveries into their home
Privacy and cost are key barriers to adoption of smart home products
Almost half of smart home owners save money on utility bills
OWNERSHIP OF SMART HOME DEVICES
Growth continues for voice-controlled speakers
Smart security ownership stays level despite consumer intent
Smart fridges, vacuum cleaners and washing machines remain niche
Figure 14: Ownership of connected home devices, March 2020
Over a third of consumers with a voice-controlled speaker received it from someone else
Figure 15: Buying or receiving a voice-controlled speaker, March 2020
INTEREST IN BUYING SMART HOME PRODUCTS
Consumers still most interested in smart security
Interest in other smart home items stays level but potential for smart plugs
Figure 16: Interest in purchasing smart home devices, March 2020
VOICE-CONTROLLED SPEAKER BEHAVIOURS
Half of consumers with voice-controlled speakers open to using them for shopping
Voice assistants proactively asking to re-order an item could be appealing
Over four in 10 voice-controlled speaker owners keep their devices muted
A quarter of voice-controlled speakers have a touchscreen display
Figure 17: Privacy and shopping with a voice-controlled speaker and ownership of speakers with a display, March 2020
PURCHASE MOTIVATORS FOR VOICE-CONTROLLED SPEAKERS
Consumers value ease of use in voice-controlled speakers
Portal’s cross-platform support likely to be appealing to switchers
Figure 18: Most important factors when purchasing a voice-controlled speaker, March 2020
ATTITUDES TOWARDS SMART SECURITY
Over eight in 10 smart security owners feel more secure
The majority of people interested in smart security prefer bundles to individual products
Consumers also show interest in monitoring deliveries into their home
Security cameras and delivery boxes
Figure 19: Feeling more secure due to smart security devices, March 2020
Figure 20: Buying smart security bundles and monitoring deliveries into the home, March 2020
CONCERNS OVER SMART HOME DEVICES
Privacy and cost are key barriers to adoption of smart home products
Some also concerned about having too many devices
Figure 21: Factors restricting smart home purchases, March 2020
Smart home owners share concern over data privacy
Figure 22: Attitudes towards privacy and data for smart home, March 2020
ATTITUDES TOWARDS SMART HOME PRODUCTS
Around half of people see smart home devices as a gimmick
Making life easier is most likely to be the appeal of smart home products
Extending the personalised recommendations for voice-controlled speakers
Offering discounts to older consumers
Figure 23: Appeal of smart home devices, March 2020
Almost half of smart home owners have saved money on utility bills
Figure 24: Saving money on utility bills with smart home devices, March 2020
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

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