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Smart Homes: The next CPG battleground?

02 Dec 2015

Will the smart home be the next battleground for CPG brands? Gartner estimates that 30 billion devices will be connected to the Internet by 2020. In the consumer sector, Gartner predicts that as many as 500 smart devices might be connected to a smart home by 2022.

A majority of these things, such as connected coffee machines, lawn irrigation sensors or wearable technology, will create demand for a wide range of consumer products and change the dynamics of consumer decision making when intelligent things become part of the mix.

This means more opportunities for CG companies and other industries to leverage intelligent things in the consumer’s decision-making process through direct communication and engagement. What makes this unique for the CG industry is the sheer number of items a household acquires and consumes.

We think that digital business will accelerate marketing to a 1:1 level — where all the interactions you have with CG companies will feel like they are just for you. With 500 potential smart objects in your smart home, it will become an important battleground for brands and retailers who want to sell you consumer goods.

What’s more, we are even seeing the beginning of Internet-connected things ordering items on behalf of their owners. For example, inkjet printers, washing machines and smart pill bottles can initiate simple transactions that are set by the human user. The launch of Amazon.com’s Dash Button — which allows consumers to reorder items by pressing a button on a small device mounted on an appliance, for example — presents many interesting implications for how consumers will interact with devices in the home when making purchasing decisions.

While many smart home, consumer appliance, and other consumer energy technologies are in the early phases of adoption, this does not mean that CG manufacturers should wait. The smart home will offer many innovative digital business opportunities (products and services) to those CG manufacturers that can adapt their products and develop new services to exploit them.

A good first step for CG companies would be to simply make time for thinking and brainstorming with colleagues about how intelligent things can factor in to your consumer’s decision-making journey and possibly change your business. This should be followed quickly by the addition of intelligent devices to your technology innovation pipeline, and active education about how the IoT and the smart home ecosystem will surround your business.

So the answer is yes – the smart home will be the next battleground for CPG brands. Don’t wait. The number of internet-connected things hitting the market certainly won’t.

Article by Don Scheibenreif, Gartner research analyst

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