September 06, 2013

Amazon's Home Automation Entry - The DIY Approach


Though home management offerings trend toward complexity for the non tech-savvy consumer, Amazon has opened an online store full of products for those looking for a do-it-yourself alternative to cable and telco offerings, which provide professional installation and carry a monthly service fee.

Predictably, Amazon’s home automation store approach continues the e-commerce kingpin’s original strategy of selling products standalone or in groups provided by its merchant partners without value-added services. This will likely limit the company’s market opportunity in the more than plug-and-play home management arena.


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More for the Masses

Given that these service and products are being marketed to the wide-ranging demographic masses, I have previously emphasized the critical need for baseline education in analyzing Comcast’s Xfinity Home launch and outreach efforts which spanned TV ads, direct mail pieces and radio spots.

Given all the pieces that make up these services, cameras, sensors, gauges, locks, and gateways controlling most every important aspect of a home, selling the pieces with a few online mini-guides seems to fall well short of the needs of those consumer that don’t want, or know how, to play systems integrator.

Further, Xfinity Home and other like offerings provide 24/7 remote monitoring and are built into the relatively nominal monthly service charge. Amazon, not surprisingly, doesn’t do this. Comcast offers pay-extra installation, which is the most challenging part of this endeavor for many because, again, Amazon does not make a similar offer.

I know of people who haven’t yet figured out how to swap in new big screen TVs, and members of older generations that are still baffled by smartphone apps and features. I just don’t see these sizable constituencies bringing in a tower of boxes from Amazon off the porch and going solo with the contents.

Not to pile on Amazon, but what of the even larger group of consumers that just don’t have the time for significant home projects and far prefer to pay someone to take care of it for them? Mowing lawns, landscaping, plowing snow, car care and house cleaning have already been outsourced by many.

DIY Dream

The Amazon approach to home automation and control is a DIY dream, and there will be many consumers up for the challenge, whether they are tech-savvy or not. The components are becoming more robust and easy to use.

As long as the home has broadband Internet access, which Comcast, Time Warner, AT&T and Verizon have long offered, they should be off to the races as they don’t shudder when they buy products carry the phrase “some assembly required.”

To its credit, Amazon’s Home store provides a helpful video overview and several short videos on the components and their use. The online super-destination didn’t get to where it is by simply selling other folks stuff and having it shipped to your residence.

It will prove interesting to see how the e-tailer fares in selling packages of inter-related products.

Stated simply, the overall market opportunity is huge (see the Strategy Analytics chart and forecast) and even home shopping clubs are now pitching big pieces of the picture aggressively.

Comcastic

Disclaimer: living in Comcast territory, I have yet to see materials from other cable providers on home offerings and have yet to see them from rival Verizon. That said, I was pleased and impressed with the “assume nothing” approach Comcast took with its introductory direct mail explainer on Xfinity Home.

It’s a short version of what I suggested this past January that the cable industry produce and distribute to the masses, almost purely for educational purposes. It would hit the need for mass education spanning demographics hard, though the idea of a single guidebook for services from multiple cable operators may have been a tad naïve.

Again, fully believing education is the key to mass adoption, building on that mailing with similar TV and radio ads helps immensely. Success in the home management space is built on a rock-solid foundation of understanding.

The Bottom Line

Given the fast-evolving menu of home automation and control services available (well beyond just remote security monitoring), the foundation couldn’t be more important. Consider that what’s available today is still a subset of what’s defined as home management services. That group will eventually include home health offerings and more, all enabled by a broadband connection.

So whether you build it yourself or have another entity do it for you, get it right the first time so you can easily build upon it as additional offerings arrive.




Edited by Alisen Downey



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