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Is Amazon Set to Dominate the Smart Home Market?

There are few areas of our lives that Amazon has failed to take a foothold in, so it should surprise no-one that a business that started out selling cheap books online is on the cusp of transforming our homes into Amazon-branded Smart Homes. The only real surprise is that it has managed to steal a march on some of the more established names in the technology market, with Google’s Google Home device struggling to keep the pace. But can it hold onto its place in our homes and hearts as competition heats up?

Amazon

The Amazon Echo has transformed the Smart Home market, bringing with it so much more than just a speaker that you can talk to. The hardware’s Virtual Assistant Alexa has the ability to offer news, weather, games, jokes and hundreds of ‘Skills’ to inform and entertain, including linking with various smart devices so you can use voice control for your central heating, lighting, and more. This sci-fi premise has become a reality for millions of homes around the world since the Echo launched in 2015.

Amazon doesn’t seem set to rest on its laurels either, launching the smaller Echo Dot in 2016 to offer the same functions in a cheaper package with less emphasis on the speaker side of the technology, while the Amazon Tap offers a portable alternative to the Echo. Most recently launched are a couple of devices that aim to to expand Alexa’s reach into other rooms in the home, including the bedroom. No, not like that.

The Echo Look is a hands-free camera that can be used to take selfies and act as a ‘fashion consultant’ to help users decide which outfit to wear, along with all the usual Alexa functions. Then there’s the Echo Show, a touchscreen video-player version of the Echo that will play YouTube (with promotional material focusing on using it for recipes) and Amazon Prime Video content, make video calls, and even check on home security camera footage.

Another recent development has been Amazon’s relaunch of its Fire Stick USB media players with a new Alexa-powered remote control that allows users to talk to their TVs and tell them what they want to watch. This certainly demonstrates Amazon’s faith in the technology and our desire to integrate it (and Amazon itself) into almost every aspect of our lives. So far we seem to be confirming that faith: over 8 million people now own an Amazon Echo, according to a recent report.

Of course, Amazon is a retail business first of all, and so all of its Echo products are intended to make it as easy as possible for us to order products from Amazon itself. If that wasn’t simple enough, since 2015 Amazon has also encouraged us to add its Dash buttons into our homes. This means we can re-order items like detergent and toilet roll from Amazon with the touch of a button, putting the company in a position where it can take the place of supermarkets and convenience shops via technological advances.

Competitors

By being ahead of the competition, Amazon has managed to establish itself in the Smart Home market, but Google is always in its rear-view mirror. The Google Home smart speaker has many of the same features as Amazon’s range, but it comes with access to the tech giant’s incredible search engine capabilities, giving it a real advantage over Alexa in terms of answering queries. At its launch last year, critical comparisons tended to favour the Echo, but such things can change quickly as both companies attempt to corner the market.

Another big beast of the tech world, Invoke, has belatedly announced its intention to launch its own smart speaker with Microsoft Cortana (and Skype) at its core, but there are potentially problems. For Invoke to be seen as a market leader, it needs to innovate, but in an already stuffed marketplace what can it do to set itself above its competitors? Then, of course, there’s Apple, which has been surprisingly slow to react to Smart Home technology, but will launch HomePod (complete with Siri) in time for Christmas. Will that be too late? Time will tell…

What Does the Future Hold?

For now, Amazon continues to sit pretty at the top of the table for Smart Home technology, but the future remains wide open for how the marketplace will change and what factors will influence it. These products will only have longevity if they can continue to offer their customers what they want and need, and if brands can find the balance between delivering something useful and marketing/selling successfully.

This means a new focus for marketers and agencies trying to find ways to utilise Smart Home technology, with Greg Hedges, director of strategy at digital agency Rain summing up the new area of opportunity: “A lot of what we had done before was so visual in nature—creating videos, websites and apps. [Voice] is now part of what we do—it’s the evolution of how we interact as consumers with things.”

However, so far there is little sign that branded Skills are finding a large audience on Echo, with Patron Tequila’s Skill (which offered recipes and bartending tips) downloaded by just 7,000 people last year. Only 1,200 used it more than once. The opportunity is there to use voice and the Internet Of Things, but as of yet few brands have fully capitalised on it.

These are early days though and the technology is still relatively young. As more products come onto the market and more developers try out new apps and Skills, we will see what the potential of the Smart Home market for brands really is. As to which company will dominate the market in the years to come, at the moment Amazon is still on top, but as Google Home gains more traction the gap will close, with both Microsoft and Apple also ready to start competing.

In other words, watch this space, because these are exciting times for the Smart Home marketplace, which can only be a good thing for consumers.

What do you think of Smart Homes? Do you have this technology and do you think Amazon will control the market for the foreseeable future? Start the conversation online @mporiumgroup and subscribe to our newsletter for more fascinating articles and insight.

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