Gartner Blog Network


Smart Homes: The Next CPG Battleground?

by Don Scheibenreif  |  November 24, 2015  |  Comments Off on Smart Homes: The Next CPG Battleground?

Will the smart home be the next battleground for CPG brands?

This is one of three impacts I write about in How Digital Business Will Create Consumer Growth Opportunities in Consumer Goods Manufacturing. 

Gartner estimates that 30 billion devices will be connected to the Internet by 2020 (see “Forecast: Internet of Things, Endpoints and Associated Services, Worldwide, 2014”). In the consumer sector, Gartner predicts that as many as 500 smart devices might be connected to a smart home by 2022 (see “The Future Smart Home: 500 Smart Objects Will Enable New Business Opportunities”). 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 (see “Internet of Things Scenario: When Things Become Customers”). 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 using something like Gartner’s Business Moment model. This should followed quickly  by the addition of intelligent devices to your technology innovation pipeline, and actively learn 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.

Category: 

Don Scheibenreif
Vice President and Distinguished Analyst
5 years at Gartner
5 years IT Industry

Don Scheibenreif is a Vice President and Distinguished Analyst with Gartner's Enterprise Architecture and Technology Innovation research group. He works with with enterprise architects and other IT leaders on how emerging trends and digital business will impact enterprise architecture and enterprise digital transformation. Read Full Bio




Comments are closed

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.