Smart devices take over but some products lag

Smart speakers, smartwatches, and smart TVs have captured a healthy share of category sales. But smart fridges run cold, and it's been lights out for bulbs.

Consumers are embracing smart devices. For some, though, the hugs are coming more quickly than for others.

That represents the findings from Adobe via its digital insights group, which is charged with analyzing aggregated anonymous consumer data from sites using its web analytics products. Adobe claims these are used by the vast majority of, nay, virtually all online retailers, at least in the US. The company recently broke out data on smart device sales that fall within what it calls its digital dollar project.

Take, for example, smart TVs: Adobe has found that the sales rate of such products have accelerated and now represent almost two-times the volume that they did back in 2014. Following massive growth in 2016, growth has dropped off dramatically. But part of that is due to saturation. Almost 90 percent of TVs sold online in the US.in the first quarter of 2018 had Wi-Fi connectivity.

And after years of companies trying to launch the kind of wide app selection we see on smartphones, the killer app for such connectivity has been confirmed as video, particularly the high-resolution video that is becoming available on broadband services such as Amazon Video and Netflix faster than it is on traditional pay TV services. Adobe identifies the 2016 as the year 4K TVs began outselling HDTVs in the US online. With prices continuing to fall, 4K TVs now represent about 90 percent of TV units sold online in the US.

Television isn't the only product where smart variants have made rapid gains versus traditional products.

While companies other than Apple continue to seek the right path to sustained smartwatch success, the category is nonetheless gaining on traditional timepieces. According to Adobe's analytics, smartwatches accounted for just over eight percent of total watches sold online in 2014. However, the total has inched up about three percentage points per year since then. And in the first quarter of 2018, more than one out of five watches sold online were smartwatches, more than a doubling of the 2014 share.

While there's no doubt that the revenue share of such connected devices would be even higher, smartwatches are likely faring relatively well online as many of the more expensive traditional watches are sold offline.

While smartwatches continue to encroach on their forebears on forearms, smart speakers have blasted their way past traditional speakers in a relatively short amount of time. In 2016, their first year on the market, smart speakers (for which the Amazon Echo was essentially the whole category at launch) grabbed 28 percent of online speaker unit sales. That's no small feat given that there's still a lot of market activity around Bluetooth speakers in general, many of which were less expensive than the Echo. But Amazon soon attacked that disadvantage with the Echo Dot, and the market share of smart speakers more than doubled in 2017 to overtake other speakers with 57 percent of the market.

But not every smart category has seen such an explosive takeover. Adobe also looked at sales of smart refrigerators, the object of significant derision on HBO's Silicon Valley, and found that their share of category revenue hasn't moved beyond 10 percent. Again, though, the picture likely looks better for such products when looking at offline sales given the high price and shipping costs of such products. Another such troubled category is smart bulbs that can be vulnerable to breakage when shipped. Smart bulbs haven't captured more than about 10 percent of revenue over the past since 2014.

While Adobe's data says something about the implications of the online channel when it comes to smart device sales, it also reinforces how utility, convenience, and value can play a role in determining the success of smart devices versus their entrenched categories. For devices such as speakers and watches, there's a large increase in functionality that comes without the need for much concern about installation. For products such as refrigerators and lights that are tied more deeply to a home's infrastructure, there's a higher bar in terms of both the kind of homes and the level of integration needed to take full advantage of the connectivity.

SOURCE BY ZDNet