Smart Home Industry is Maturing, but Continued Growth Depends on Tech Support Access

NASHVILLE, Tenn. – August 13, 2024 – A new white paper by global tech care company Asurion and market research firm Parks Associates finds that smart home companies are losing millions on product returns each year, due in large part to insufficient post-purchase customer support. Even as the smart home industry matures along the adoption curve, challenges involving device setup, connectivity, interoperability, and more threaten revenue growth for individual manufacturers and progress toward mass-market adoption for the category as a whole. The research points to post-purchase support as a critical factor in driving customer satisfaction, brand loyalty, and revenue growth among a competitive field facing a pivotal point in consumer adoption.

More devices means more support needs. The average number of connected devices per U.S. Internet-connected households is now 17, up from 10 devices just five years ago. The increase is especially pronounced among households with children, which have an average of more than 23 devices. Naturally, more devices sharing Wi-Fi means more connectivity issues. For households with children, trouble getting products to connect to the Internet and other devices nearly doubles, with nearly 60% of households experiencing issues.

“In many cases, support for consumers’ digital lifestyles can be provided remotely or virtually but with the added challenge of extending support to multiple devices and services in the home,” said Jennifer Kent, VP, Research, Parks Associates. “Households with children are especially prone to technical problems, a clear target market for premium technical support and an opportunity for additional revenue through a service that stabilizes the home network and ensures reliability of service.”

It’s not just connectivity issues though.

The support gap starts immediately after purchase. According to Parks Associates’ research, a significant portion of smart home purchases (25-50%) are returned. Many of the reasons for return – issues configuring device settings, difficulty learning to use the device, trouble with the physical installation or issues connecting the product to other devices – could be mitigated with more thoughtful product support offerings.

These product returns have a significant impact on revenue, representing millions in potential losses to competitors (when consumers repurchase from a different brand) or losses to the category at large (when consumers don’t repurchase at all).

“For the many brands competing in the Smart Home OEM space, long-term sustained success depends on much more than exceptional products. It will also require exceptional customer experiences being developed around the products,” said John Leonard, SVP of Partnerships at Asurion. “Those that provide true, substantive value at each stage of the customer journey—from product discovery through onboarding and repairs—stand to win more customers and generate much greater customer lifetime value than competitors.”

Ultimately, customers want peace of mind, especially in this Early Majority stage of the adoption curve. Warranties that include tech support could be the solution.

Consumers want to know their products are protected if something happens, and they want to know they will be able to get help with their product if they need it. Device warranties that bundle technical support check both boxes. In fact, Parks Associates’ research found that when choosing between two brands, nearly half of respondents would choose the brand that offers the more extensive warranty – and 48% would prefer a warranty that is bundled with tech support.

“Now is the time for businesses to take thoughtful inventory of what people most need from post-purchase product support and work to deliver it,” Leonard said. “Asurion has decades of experience using insights like these to help partners develop high-value protection and support programs that drive loyalty, support revenue goals and ultimately improve how consumers experience their connected devices.”

For more information and to download the full white paper, visit: asurion.com/homereport