Marketing Smart Homes: How to make home automation meaningful and relevant to masses

Smart Homes is not really a new thing. Home Automation is being marketed under different names for many decades now. ‘Soon Homeowners Will Be Able To Control All Home Appliances Through A Central System’ was the title of a Chicago Tribune article released in 1989. In fact the term ‘Smart House’ was coined as early as 1984 by the American Association of House Builders. Prior to that, In 1966 Jim Sutherland, an engineer working for Westinghouse Electric, developed a home automation system called “ECHO IV”; this was a private project and never commercialized. There are several reasons why home automation technology could not become a commercial success. The first and foremost reason is technology adoption among the masses. Before the evolution of smart phones, it was unusual for the masses to adopt the technology of the time. The human machine interfaces were complex and the system design required technical know-how. The invention of touchscreen changed that overnight. It provided simple and intuitive human machine interface and led the technology adoption through the development of ‘apps’. The second reason was the machine to machine communication and information technology of the time. The cost of technology was so high that it could not permeate the grass-root level appliances used by the masses. This significantly reduced the utility of the automation systems. Another aspect was standardization of communication technology. Prior to the adoption of Ethernet and IP protocol, the communication technologies for machine to machine communication were being developed in silos. Even today, the challenge of standard technology for home automation has not been resolved but we have still covered a lot of distance. Having partially resolved the two major challenges of technology adoptions and standardization, the industry should now be read to the third and most formidable challenge of home automation – marketing it to the masses!

For decades now, the smart connected homes were being developed by niche players and were being targeted to the tech savvy upper echelons of the society and the companies soon realized that that segment cannot offer a sustainable mainstream market. The commercialization of internet of things technology has made smart homes affordable to middle class but the problem of marketing still persists.

This articles offers segmentation, targeting and positioning (STP) methodology to the home automation industry. I have used the VALS (Values, Attitudes and Lifestyles) framework for the STP analysis of smart homes. VALS framework has been used because home means different things to different people depending upon their values, attitudes, lifestyles, emotional drivers and resources and VALS framework captures it beautifully. The picture below explains the motivational drivers for different segment of people under VALS segmentation.

VALS segmentation for Home Automation
VALS segmentation for Home Automation

This framework also make the distinction between smart lifestyles and smart communities depending upon whether the segments prefer exclusive or shared resources. Smart Homes in its colloquial meaning refer to smart lifestyle solutions for high-income, high resources class of people. For the low-income, low resources class, smart communities will be more appealing because of its lower total cost of ownership. Based on this distinction, the home automation preferences for different segments are described below.

Home Automation preferences for VALS segments
Home Automation preferences for VALS segments

Based on these smart home/community preferences, the home automation industry can develop smart home concepts that appeal to the individual preferences and desires of different segment of people. This approach will make smart homes not only more acceptable for the masses but also more meaningful and relevant to their lives.

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