IoT Best Practices for Home Appliance Manufacturers

by Dina Abdelrazik | Oct. 3, 2016

Last week, Appliance Design magazine hosted a webinar focused on best practices for appliance manufacturers to consider when incorporating IoT features in their appliances. The discussion included speakers, Brad Russell, Research Analyst of Parks Associates, and Justin Ruiz, Product Marketing Manager of Ayla Networks.

Before exploring the smart home arena, manufacturers who consider designing, building, and selling IoT connected appliances must understand the current landscape of smart home major appliances. Brad Russell illustrated the current market with a few key elements using Parks Associates data:

  • Adoption: The current state of adoption for smart home major appliances is still relatively low. Since 2014, the adoption rate has been roughly 3%, increasing slightly to 5% in Q4 2015.
  • Brand Fragmentation: Over the years, there has not been a clear brand leader for smart appliances demonstrating the fragmentation in the market. While General Electric leads the space, no one brand has more than 15% of the market.
  • Demographics: Larger homes are more likely to adopt smart appliances.  The correlation is stronger between home size and adoption as opposed to age and adoption. Still, younger consumers are more likely to own a smart appliance as demand for smart appliances broadly correlates with age and is strongly correlated with consumers aged 18-34.  Furthermore, households with children are more likely to report an intention to purchase a smart appliance. This may be due to factors of age, home ownership, and actual appliances used.
  • Sales Channels & Purchase Behavior: Retail stores account for the bulk of purchases, but online sales channels appear to be gaining strength. Amazon is the leading retailer for smart appliances at 24% of the market, followed by Home Depot, Walmart, and Lowe’s. Interestingly, the purchasing cycle is relatively short – nearly 60% of buyers spend less than 1 week considering a purchase.

Given the nature of the market, there is still a demand for smart appliances. Almost one-fifth of broadband households express a desire for a smart major appliance when asked about their intentions over the next 12 months. In Q4 2015, 10% expressed a strong desire for a smart major appliance (i.e. rated their intention to buy a 6 or 7 on a 7-point scale). Purchase intention has risen from 9% in early 2014 to 18% in late 2015, nevertheless actual adoption and purchase have remained low due to high cost of smart appliances and low availability of products currently in the market.

Though adoption of smart appliances is relatively low, there is demand and intention to purchase such products in the future. For manufacturers to capitalize on the anticipated rise in demand and succeed in the industry, they must incorporate and consider a few important aspects during product development. Justin Ruiz highlights the best IoT practices for home appliance manufacturers as follows:

  • Prioritize Security & Scalability: Manufacturers must practice good industry standards for security in terms of having data encryption, multi-factor authentication on devices, and having layered access control. In terms of scalability, the manufacturers’ back-end solution must scale to the number of devices in field. Smart home users expect quick responses from their devices, scalability is a way to ensure speed, or low latency Furthermore, scalability is needed to optimize for ongoing writes of usage data to the database, and to leverage a single platform across regions globally.
  • Design for End-to-End Configurability: Manufacturers can unlock usage information for a variety of business purposes. To scale the analytics for actionable insights, there needs to be a flexible back-end model. Building an interactive development model that is flexible to change device behavior in the field also will be very important in adapting to consumers’ behaviors.
  • Need Role-Based Access Control (RBAC): Manufacturers need to customize roles and privileges for accessing the back-end solution. This can be done by designing a back-end solution with an architecture that segments and splits data to grant access to those who need certain data and to safeguard privacy and security concerns. Providing granular control will allow for more appropriate sharing and use of the information provided.

Further Reading:

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