According to industry analysis, the smart home device market is already significant, and it is poised to grow even larger in the years ahead. Fortune Business Insights estimated the global market value at $121.59 billion in 2024, with projected growth to $633.20 billion by 2032. These devices, like smart doorbells, thermostats, lighting and more, present an exciting opportunity for retailers, but understanding consumers’ motivations and proactively addressing potential concerns will be vital to make the most of this dynamic market.
Understanding Consumer Priorities
Assurant’s 2024 Connected Consumer Trends Report, which gauges consumer sentiment about their use of and attitudes toward connected technology, reveals that enhancing home security is one of the key motivators driving smart home tech purchases, alongside making daily tasks more efficient. The report expands on these findings with some revealing demographic data. Notably, geographical and gender differences play a sizable role in perception of smart technology.
Respondents in rural and suburban areas in particular place a greater sense of importance on home security when approaching smart home technology compared with those living in urban areas. Our research found that rural and suburban respondents cited security as the top reason for buying a smart home device over the next 12 months, while those living in urban areas tend to prioritize purchases that increase home efficiency or result in financial savings. Urban respondents are also nearly twice as likely to prioritize AI features in smart home tech upgrades than their rural counterparts. Understanding these subtle differences in customer sentiment can help retailers resonate more deeply with their customers, region by region.
Men are more likely to own devices, such as doorbell cameras, and perceive the positive attributes of smart technologies, even though single women are more likely to own homes than single men in the United States. With personal safety concerns ranking highest among consumers, retailers have an opportunity to emphasize the security benefits that connected technology can bring to the lives of consumers while addressing any data privacy concerns they may have.
Sharing Data Privacy Best Practices
Although these devices can simplify consumers’ daily lives and address consumers’ desire to protect their home, they also have the potential to introduce online vulnerabilities if users fail to exercise caution and follow best practices. Retailers that take these concerns seriously and tailor their offerings and guidance to address them can engender trust and build stronger relationships with their customers.
According to a survey by KPMG, 86% of Americans identify smart device data privacy as a growing issue. About a third of respondents in our research, too, expressed strong concern about data privacy and new technology.
With the number of connected devices in the average home across regions increasing rapidly, potential vulnerabilities also have grown. The average U.S. household now has more than 16 connected devices, and some of these devices are linked to sensitive personal data, such as family information, financial documentation, health records and other online identifiers.
Retailers can demonstrate to their customers that they understand their concerns by providing guidance up front on best practices for device safety at the point of purchase. These 10 tips for customers are a great place to start:
Smart Device Security Tips
- Change default passwords immediately
- Enable Two-Factor Authentication (2FA)
- Keep devices updated
- Use a strong WiFi password
- Segment your network
- Turn off features you don’t use
- Monitor network traffic for unfamiliar devices
- Avoid using public WiFi
- Check privacy settings to limit third-party personal information sharing
- Replace outdated devices
As smart devices continue to reach further into homes with increasing sophistication and prevalence, consumers are becoming more drawn to potential efficiency and security benefits, but also are increasingly aware of the privacy risks they can pose. By tailoring smart home offerings in a way that provides customers with peace of mind both for their homes and their personal data, retailers can capitalize on a rapidly burgeoning market.