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Front runners lead the pack, but the race has only just begun.

Delta-ee brought 40 participants together for the first European ‘Connected Homes and Energy’ Roundtable in Windsor, near London. The day featured presentations, animated debates and lively discussion (following equally lively discussion at the bar the evening before) between utilities, telcos, the heating industry, controls companies, and other home energy aspirants. As well as sharing insights from our Connected Home Research Service, companies such as Orange, Eneco, Deutsche Telecom, EQ-3, British Gas, Danfoss, Tado, Vaillant, Netatmo and Quby shared their perspectives and experiences on the sector. In this blog I’ll share four of the key messages that came out of the day.

  • Key message #1: Partnerships will be essential, in order to create the market and unlock all its value. Getting to scale quickly will require bringing together the right product(s), with the right platform and the right infrastructure. Only at scale can some of the value be unlocked. And no one company can own all the services to each consumer.
  • Key message #2: There will be battles to own the customer relationship – companies need to decide what position they want in the value chain and fight for this.
  • Key message #3: There are already some committed front runners who have put connectivity at the heart of their business. They have the ambition to get to scale quickly and benefit from strategic vision, drive and support from senior management.
  • Key message #4: Engaging customers is critical – both for the product and the ongoing service. Getting product and infrastructure into customer’s homes can be challenging – working out the “entry point” or “need”, together with a simple and focussed offering is critical. Then ensuring customers are engaged with their product, and using services regularly will provide a way to add further services in the future. Finding the right combination of information, control and automation is critical.

Let’s expand on some of these messages and weave in highlights from the Roundtable. There was strong discussion about customers. What are their needs and wants, how do you get them sufficiently engaged to buy a connected home product or service, and once they have it how often, and how do they use these products? We heard from one utility who places a huge emphasis on building the customer voice regularly and deeply into their product development process. A common theme was to start with a simple and clear proposition, although some were frustrated about how to get relatively expensive ‘kit’ into customer’s home. And a couple of companies have found that 70% of customers use their heating app every day to interface with their heating.  At Delta-ee we’re about to dive more deeply into this topic through some focussed market research with customers… we’ll blog more on this so keep following us.

On owning the customer relationships, the conclusion was… well, there wasn’t a clear conclusion. We asked participants to vote on who would own the customer relationship for the connected home in 2020. We had a wide range of response – the two leading candidates are electronic / internet giants, followed by energy suppliers. Interestingly, telcos were fourth on the voting. Personally, I would keep a close eye on this sector. British Gas and Eneco both told exciting stories about their efforts in this space – both have buy-in from the top that the connected home could be a key part of their futures.

There was a fascinating discussion about the heating sector – a very traditional sector with two or three step distribution, and installers having the lion’s share of the customer relationship and power. Connectivity offers potential ways for new entrants to disrupt the sector for a number of reasons. Here are three. Control products have traditionally been designed more as building products rather than consumer products. The internet is already starting to disintermediate players in the value chain and increasing consumer power. Growth in sensors in homes will only increase this. And connectivity will very quickly become ubiquitous in heating appliances and controls.

Overall we received great feedback from participants – we’ll run the event again, bringing together our subscribers and selected other attendees. If you’d like to be kept in touch, please e-mail us.

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