Smart home product manufacturers must target customers in different ways

Smart home product manufacturers must target customers in different ways

Smart home product manufacturers must target customers in different ways
Credit: Pixabay

Smart home consumers can be divided into seven segments, according to new research from market analyst firm Strategy Analytics. 

Manufacturers selling smart home products to customers need to look beyond outdated demographics and embrace new customer segmentations that consider how different people view smart home products and their advantages.

According to research from market analyst company Strategy Analytics, consumers fall into seven categories, including ‘convenience seekers’ and ‘affluent nesters’.

Its analysts say that some smart home products and services have struggled to gain acceptance because they focus on issues  less relevant to certain customer segments. For example, some people are less interested in technology, but are willing to pay for products and services that will help them to better manage their homes.

“The idea of home management encompasses everything from energy management to budgeting to maintenance and repair,” said Bill Ablondi, director of Strategy Analytics’ Smart Home Strategies service. “To appeal to a mass market, companies should focus on solving real problems for consumers.”

Read more: Smart home revenue to top $190bn by 2021

Smart home segmentation

The seven segments, as identified by Strategy Analytics are strugglers, convenience seekers, retired renters, greens, affluent nesters, impressers, and early adopters.

The company said that strugglers are the largest group and the most challenging to reach, with lower incomes and very little interest in technology or concern about environmental issues. Most smart home products and services are unlikely to resonate with this segment.

Convenience seekers are later to adopt tech but could be attracted by service providers who focus on the convenience of smart home products and de-emphasize the technology.

Retired renters are a challenge to sell to, but may be persuaded by messaging that focuses on how smart home products can help with issues of pollution and global warming.

Greens are not the only segment concerned with environmental issues, but they are the only group prepared to pay a premium for eco-friendly products and services, so smart home providers focusing on environmental benefits should target this group.

Affluent nesters are happy to pay for products and services which help manage the home and are ready to adopt new technology, but are not particularly concerned about the environment, so marketers should adopt a different approach to reaching this segment.

Impressers readily adopt new technology and are also concerned about the environment, so this segment is a prime target for all sorts of smart home products and services.

While early adopters are technophiles and happy to pay for new products to manage the home, they are less concerned about their home’s appearance and environmental issues. A tech-focused marketing strategy is needed for this segment.

Read more: Flexibility will be key to dominating the smart home market

Latent Class Analysis methodology

“There are some consumer groups that will be easier to reach than others,” said Joe Branca, principal industry analyst at Strategy Analytics. “This research helps to identify some of the challenges associated with reaching customers outside of the early adopter segments.”

Strategy Analytics surveyed a total of 6,351 smartphone owners who own or rent their own residences across the following Western European countries: France, Germany, Italy, Spain, and the UK. The company used a Latent Class Analysis methodology to avoid the pitfalls of traditional age- and demographic-based approaches, which mistakenly assume that everyone of a certain age behaves the same way, according to the company.