Understanding the bigger picture - Gus Desbarats, Chairman of The Alloy

Interview with Gus Desbarats, Chairman of The Alloy - a speaker of the Smart Home stream in the upcoming Smart Summit Frankfurt
Published on: 9th April 2016
1. How popular are smart home products in your home market and how does this compare to the last 1 to 2 years?

Still very early days, but starting to get traction mainly thanks to saturation advertising by Hive. We are also seeing rapid growth in connected health devices – e.g. scales. However the real immediately compelling use cases remain elusive. They will mostly come from services.

 2. What more can be done to take smart home products and services to the mass market?

Plenty. They need to be better tailored to the detail of mass market consumer lifestyles in every way, from smarter ‘service based’ headline propositions (ex. preferential ‘context based’ insurance pricing to get sensors in) to easier installation and ownership. At the other extreme they just need to be invisible and happen ‘automatically’ when devices get upgraded.  

3. Which do you consider to be the most popular products for smart home consumers?

Because of Nest, smart thermostats have the highest profile, then security cameras, but I can see this changing fast as the most popular ‘products’ actually become services.
Gus Desbarats
4. Which distribution channels are the most successful in your market?

Right now, retail seems to be working well, but longer term, as sensors multiply and hubs consolidate, I believe that online will be the dominant channel, perhaps working in tandem with high street ‘showrooms’.

5. How important are industry partnerships to grow the Smart Home market?

All IoT propositions are delivered by a system. No one can be expert at everything, so partnerships are critical, and the lack of them is probably one of the main causes of take-up lag. I see  4 main partner profiles although some organisations will have multiple roles: pure services (e.g. insurance co’s) – sensors (and sensor platforms)  – hubs – software / data platforms. ‘value chain’ partnerships are already common but there will also be more brand partnerships  Insurance Brand A offering locks by brand B on platform brand C. 

6. What product/service will become “can’t live without”?

Effortless Presence/identity detection is a ‘gateway’ service that most others will build off.

7. How are standards encouraging or hindering Smart Home growth?

What is hindering growth is the vain hope that standards will emerge. While Europe hopes for standards, the US will, once again, VC fund de-facto standards via 1st mover scale advantage – e.g. Nest. What is needed is strong brand alliances- these will shape the eco-systems and more ‘semi open APIs ‘  

8. How important is the brand for customer loyalty and buy-in?

Brands and brand experience thinking is essential on many levels. All innovation adoption is about human behaviour change. Trusted existing brands will present a key benchmark against which an IoT offer can the positioned as ‘better’. E.g. what is happening in insurance.  Established ‘non tech’ device brands have a key role to play at the sensor end as more and more sensors get built-in. (eg. Doors with built in sensors) Consumers won’t want a house full of clip ons.  Hive also shows that new brands can help make the case for new ‘umbrella’ services.

9. Are security and privacy still a concern for customers and potential customers?

Yes – the current IoT incumbents, even the likes of Nest, are wide open to severe disruption from new entrants with more ‘up front’ transparent data usage agreements built on platforms that take a bullet proof approach to security. 10. What can retailers do to boost Smart Home sales?

High -St retailers need to push their suppliers to produce better packaging - with clearer lifestyle benefits – they should also give strong presence / joint promotion to ‘collection’ brands like Hive that represent a tangible guarantee of interoperability. IoT retailers could learn a lot from the way Hozelok and Gardenia are merchandised in garden centres.
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