Gone are the days where making your home into something any bit more intelligent than an alarm clock is restricted to only the fabulously wealthy. In 2018, it is easier – and cheaper – than ever for the average consumer to add some element of smart tech to their home. This level of democratisation is thanks in no small part to TP-Link, with the company playing a vital role in the growth of the category to complement a growing demand across the nation.
“TP-Link has been involved within the smart home space for about 2 and half years now, says Lino Notaro, the company’s retail sales director. “During this time we have gradually increased our store distribution across all of the major UK retailers and e-tailers. As a consequence, this category has grown in importance to us.
It’s not difficult to see why. According to a recent report from Statista, household penetration of smart home tech is currently at 19.9 per cent, with it predicted to hit 39 per cent by 2022. Smart tech in a home is rapidly becoming an expected norm, rather than a quirky novelty. And there’s plenty of money in the market too. The report goes on to say that revenue in the Smart Home market amounts to a staggering £2.017 billion in 2018 in the UK, with the US leading the pack at £14.16 billion. The category is exponentially growing every year, with revenue rising from £967 million in 2016 to a predicted £4.172 billion in 2019 within the UK alone.
For TP-Link, a lot of that growth is down to education and a strong relationship with retailers.
“First off, all the time we have taken the opportunity to educate and demonstrate the benefits and convenience that smart home products bring to everyday people,” points out Notaro. “We have executed some impressive in store POS with the likes of Tesco, Maplin, Dixons and Sainsbury’s, which enable customers to understand how our products work and the lifestyle benefits they provide.
“These displays include product demos and videos, which are very strong, intuitive ways to engage with customers, rather than just having educational POS header-boards or blockers which ‘tell’ but don’t necessarily ‘show’ them how our products will work in their home.”
If you have been in a large retailer that has any sort of tech in it over the past couple of years, there’s a strong chance you would have seen a TP-Link POS kit. When you’re introducing a new category to consumers, making sure they can understand what it is and what can be done with it is essential, Notaro argues, and TP-Link is heading up the charge.
“As mentioned earlier, one of the reasons why we have successfully grown smart home in retail is because of our considerable investments on ‘interactive and informative’ in-store POS.It’s essential that we provide the opportunity for customers to ‘touch and feel’ our products, along with explaining how our products work and the benefits and convenience they can bring.”
The proliferation of the tech, while impressive, is still in its early days and there is plenty more to be done in order to raise awareness and education outside of a core enthusiast and largely young demographic. (According to Statista, 49 per cent of the smart home market is aged between 18 and 34, with only 9.1 per cent of the market made up of over 55 year olds.)
“Even though the smart home market has shown considerable year on year growth, my view is that we are still in the ‘early adopter’ stage. Generally speaking we have not yet penetrated the ‘mass market’, so we’ll need to continue to help our retail partners reach the ‘next level’ of consumers who are not so confident
This will take time, but I am positive that an increasing number of ‘new consumers’ will be tempted to begin their journey with our smart plugs and bulbs and gradually add more complex devices, following their good customer experience with TP-Link,” adds Notaro.
He also thinks that though the POS kits play a key role, there is more that retailers can do to add to the category. “I do believe retailers ought to consider dedicating some space for live smart home demonstrations.
“Live demos could really accelerate the customer decision making process, once they understand how easy set up can be and seamless user experience is.”
On the topic of easy set up and seamless user experiences, one absolutely cannot discount the monumental effect that the birth of Alexa has had on the category.
Alexa, along with Google Home and other similar AI assistants, have played a huge role in the adoption of smart home tech, with many consumers viewing it as an excellent way to dip their toe into the smart home.
Notaro comments: “Google Home and Amazon Alexa are having a hugely positive effect on the market. Switching lights on and off and operating other electronic devices ‘via voice’ really does give them the ‘wow factor’, which has contributed to accelerated adoption of not only Amazon Alexa and Google Home, but all of the associated and compatible products which TP-Link produces.”
While a lot of the smart home spotlight has been shone on voice control, consumers largely prefer using their smartphone instead of a voice assistant as a smart home controller. A GfK study from April found that 89 per cent of consumers see their smartphone as their smart home controller.
Fortunately for the consumers who prefer their phones, TP-Link has that covered, as Notaro explains. “Our KASA App, the central control system for all our smart home products, is very easy to use and has one of the highest ratings of all smart home Apps and the integration with voice activated smart assistants makes it even easier to control.”
With the growth of the smart home being, in a way, thanks to Amazon, it is ironic that one of the biggest benefactors could be the bricks and mortar retailers that we are largely conditioned to view as the underdogs these days.
“There are absolutely opportunities for bricks and mortar retailers to capitalise,” Notaro states. “TP-Link is always discussing with our retail partners better ways of communicating the benefits of our products to the consumer. Clearly there needs to be a viable ‘business case’ to justify any investment, but if any retailer would like to discuss this matter in more detail, they should contact me.”
But with the potential for physical retail to grow as a result of the smart home, it is inevitable that the topic of Maplin – one of TP-Link’s largest customers – must be addressed. “Above all,” Notaro reflects, “it is very sad that such a well-established electronics retailer has been unable to find a way to continue trading or find a new buyer.
“Maplin has long been one of our closest retailer partners and we helped them launch many impressive in store executions, not least for smart home. Some would even argue that Maplin offered some of the most knowledgeable and enthusiastic staff with CE and I was always impressed when attending many of their roadshows in the past.”
The other big news in the retail world of late is the proposed mega merger between Asda and Sainsbury’s – another of TP-Link’s big clients. “Clearly the food sector will see the biggest effect from this proposed ‘merger’, although I do see some benefits which may ‘spill over’ into CE”, weighs in Notaro.
“Firstly, Asda may benefit from the already established ‘economies of scale’ which Sainsbury’s and Argos have, along with hundreds more stores to place an Argos concession within.”
Notaro’s own personal experiences give him an optimistic view of the deal: “I would like to share a very positive experience, which I had within a recently launched Argos ‘concession’ in my local Sainsbury’s. I purchased a lawnmower which was not in stock at the time. Despite this, it was arranged for me to get free delivery of the lawnmower from another Argos store on the same evening. This meant I didn’t even have to carry it to my car!
Regardless of how many retailers decide to merge over the next few years, it’s this ‘immediacy of supply’, which will be the most powerful tool to fight back against the largest players from ecommerce.”
For TP-Link itself within the smart home category, things are looking rosy going forward. Notaro however prefers to keep his cards to his chest. When asked what’s in the pipeline going forward, he coyly gives us a “Now that would be telling”.
He does give us a little bit more detail, saying that “I can tell you we are looking to launch new product categories (along with developing existing ones), which will add to the customer experience for their smart home.”
Whatever TP-Link has up its sleeves, the growing smart home category will no doubt continue to be a plentiful source of revenue for the company.