Prior to Parks Associates’ 13th-annual CONNECTIONS Europe: Strategies for the Smart Home and Consumer Iot conference, Jean-Marc Prunet, Managing Director – Security Business Group, Somfy shared insights with the analyst team to address the challenges and revenue opportunities with growing the smart home industry in Europe.

Jean-Marc will be participating on the Home Security: Proving Value panel on Wednesday, November 14 at 15:15. Panelists joining him on this session include:

Edwin Aartman, Benelux Sales Manager, Netatmo
Steve Shapiro, General Manager Security and Connected Home, Johnson Controls
Dave Ward, European Product Director, Ring

What are the biggest challenges rolling out new smart home products and services in Europe?
Biggest challenge in smart home is to become mass market which means getting out from the “smart” marketing, which raises questions about obsolescence, reliability, compatibility, etc from consumers. This is happening as the “smart” becomes a basic in product conception and value proposition, so it becomes really mainstream. This can happen when on a specific use case, in a specific channel, the above questions are no more questions. This time is about to happen, surprisingly maybe in pro channels before b2c channels, although the B2C channels will have paved the way for pro channels with products such as smart thermostats or smart cams or smart alarms that transformed their categories, and although the mass market UI will be provided by the GAFA (notably via voice assistants available via smart speakers, smartphones and tablets).

What channels to market are driving growth in the smart home industry?
Most growth will come from construction and professional channels that were slow to come to smart but as they become mature will make it become a basic. Why ? Because their operating constraints require that the technology happen to be mature enough until it can be widely adopted (while B2C channels can sell gadgets at the beginning), hence answering the above questions from consumers, and because the smart improves the efficiency and value proposition of pro channels (easier installation, distant and predictive maintenance, lower operating costs resulting in higher margin or lower consumer prices, transformed customer value propositions, …) in much more important proportion than in B2C channels where the smart adds costs (connectivity components, cloud and IT/cybersecurity recurring costs, …) without an increased willingness to pay more from consumers.

In respect of the questions and items focused on security, I would have the following comments :
Most customers that have no security system don’t know what exactly an alarm is, what exactly professional monitoring is, so the challenge is to simplify their life in answering their security needs. Hence we see two most successful models :
-- smart cams that are affordable, easy to install, and easy to understand
-- professional monitoring offerings that take charge of the whole concern by offering to provide the choice of the hardware, the installation, the handling of intrusion detections, the call to the police or to a security agent, etc. for a more or less affordable monthly fee

Once they get to have a security solution, when they are professional monitoring subscribers, they realize they pay a lot for a service that might not be worth it. But, most of them don’t see the alternative as they still want to be secured. That’s where comes the opportunity for DIY security solutions that in the end will maybe disrupt the dominant professional monitoring value proposition and force it to change (to the extent these player will be in a position to do so, as their operating model is very very expensive) ?