Shifts in consumer purchase behaviors show signs of a maturing marketplace
According to The NPD Group, 22 percent of U.S. Internet households reported owning a smart home device in Q4 2018, up from 17 percent in Q4 2017. Alongside ownership growth, 2018 saw an 18 percent dollar sales growth in home automation devices compared to 2017, and NPD’s latest Future of Tech forecast expects the category to reach $2.5 billion dollars by the end of 2019.
According to the Connected Home Automation Report from NPD’s Connected Intelligence, smart home device awareness has reached 42 percent among non-owners; but growth in awareness is beginning to slow, indicating that the marketplace is maturing. Additionally, the report shows the largest increase in ownership occurred in the 35-54 age bracket, from 16 to 22 percent, a sign that the smart home concept is shifting from early adopter to mainstream consumer.
This is further evidenced by the broader scope of retailers through which purchases are being made. In fact, consumers are increasingly buying smart home devices from cable/telco providers, home improvement stores, and pure play online retailers. Out of the more than 5,000 consumers surveyed who own a smart home device, 13 percent indicated making at least one smart home purchase through their cable/telco provider in Q4 2018, up 6 percentage points from year ago. The home improvement channel also realized sales growth, particularly in the smart entry category; where 27 percent of consumers reported purchasing in this channel in Q4 2018, up from 16 percent a year earlier. Finally, sales through pure play online retailers saw increases in smart power and smart lighting, with 51 and 38 percent of respondents indicating purchases were made in those categories through this channel in Q4 2018, up from 38 percent and 30 percent year ago.
“As consumers become more familiar with smart home products we are seeing that they are more open to purchasing through a wider variety of channels,” said Weston Henderek, director, industry analyst for NPD Connected Intelligence. “This demonstrates the importance of having strong retail distribution across a wider number of retailer categories for smart home OEMs.”
 Source: The NPD Group, Inc., U.S. Weekly Retail Tracking Service. Sales are adjusted for 5wk Jan. 2018 vs. 4wk Jan. 2017. Home automation devices include the following categories: system controllers, security and monitoring, power and sensors, home automation kits, smart entry, and smart lighting. Smart speakers are not included.