When you think of bookcases or bedding, Ikea is naturally one of the first retailers that springs to mind – a testament to the brand’s domination of the home furnishings retail market.
In a way, Ikea has made home design accessible, with demographics ranging from students to families able to afford the brand’s fashionable furniture and accessories.
Now, Ikea is hoping to do the same with smart home technology, by investing further in its ‘Ikea Home Smart’ division. In a recent statement, Ikea announced that Home Smart is now its own business unit within Ikea of Sweden, with the end-goal of bringing more diverse smart products to more people.
But is there a demand for it? McKinsey suggested in 2016 that, while there’s been significant growth in the number of connected homes in the US, “many consumers still do not understand connected device value propositions, and early adopters face significant pain points that have yet to be addressed”.
Despite strong sales for smart assistants like the Amazon Echo, similar concerns are still likely to exist for other smart home technology like lighting and thermostats. A more recent survey by Judopay found that – while 52% of respondents intend to invest in smart home devices in the next five years – 55% say cost is a significant barrier to the adoption of this technology.
So, could Ikea help to make smart homes more accessible? Here’s more on the retailer’s new venture and its potential success.
Making the smart home affordable
Ikea’s first foray into smart home products began in 2015 with a range of tables and lamps that can wirelessly charge smartphones. Then in 2017, it added a smart lighting kit to allow consumers to remotely control lights in the home.
Earlier this year, Ikea added another product to Home Smart, announcing a new range of smart blinds. Like the aforementioned ranges, the Fyrtur blinds can be controlled through the Ikea Home Smart app (formerly called Tradfri), as well as through Amazon Alexa, Google Assistant and Apple HomeKit devices.
The fact that Ikea’s app has been rebranded to reflect the wider variety of smart tech available is a sign of the brand’s ambitions, with rumours of even more products on the horizon for 2019. The agnostic nature of the system, which works with other smart speakers, also means there is a higher chance of adoption.
So, what sets Ikea’s connected products apart from other brands in the smart home market? The biggest and most obvious point of difference is the price point, with parts of Ikea’s Tradfi lighting system, for example, being much cheaper than those from the Philips Hue range. Some of the prices for individual items are comparable, but the point of entry is definitely lower and larger bundles tend to be much more affordable. The same goes for the smart blinds, which are set to retail in the US for around $136 upon launch in October 2019 – much cheaper than most competitors.
Making the smart home affordable is a big priority for Ikea – a strategy which it undoubtedly hopes will increase interest and indeed sales in the range. We’ve already seen this with its partnership with Sonos, which aimed to lower the cost of entry to built-in home sound systems. Indeed, the Symfonisk smart speakers (which are integrated into furniture) start at a retail price of £99, which is again a much more affordable price point than even Sonos’ smallest and cheapest speaker.
The best sounding furniture in the world is available now! Crank up SYMFONISK, our new sonic furniture collab with @Sonos
SYMFONISK WiFi bookshelf speaker, black, $99 https://t.co/ZwcCYa5y1n pic.twitter.com/K5zFvxjeJJ
— IKEA USA (@IKEAUSA) August 1, 2019
A smart ecosystem
Some of Ikea’s smart home items are unlikely to be big sellers in their own right. Hence why the smart blinds, for instance, were not the first to be released.
However, the fact that Ikea is slowly rolling out a smart home ecosystem is definitely a draw, with customers perhaps more inclined to buy into an increasing number of connected products that work from single gateway.
Again, this is what sets Ikea apart from other brands within the space, as well as the fact that the retailer integrates smart technology into functional items such as lamps and bookcases. The brand is also promoting the fact that the leap to smart home items is not necessarily a big one, and for previous customers (who already own Ikea blinds for example), installation will be just as easy.
While Ikea’s target market is broad, its smart home positioning is likely to appeal to younger consumers who are not able to afford similar technology from higher-end manufacturers. Interestingly, PwC predicts that the biggest adopters of smart home technology this year will be 18 to 25 year-old aspirational homeowners, with 59% of this group having already invested in smart entertainment.
From Ikea’s statement, it also seems like the brand has plans to go beyond home furnishings, explaining that: “By working together with all other departments within Ikea, the business unit of Ikea Home smart will drive the digital transformation of the Ikea range, improving and transforming existing businesses and developing new businesses to bring more diverse smart products to the many people.”
There is certainly potential for Ikea to expand Home Smart to other categories or rooms within the home.
The brick-and-mortar advantage
Another advantage for Ikea is its physical presence, as well as the immersive nature of its stores. This is because consumers already visit furniture stores to gain a better understanding of how items look in real life or in the context of a home environment.
This will be especially useful for smart home technology, which has quite a low rate of consumer awareness and consideration. Research has shown that while consumers are aware of smart home technology, they do not feel particularly knowledgeable about it.
Brick-and-mortar stores will therefore allow Ikea to showcase its smart home technology alongside and integrated with its regular furniture, theoretically drawing in consumers who are interested in knowing more about how it might look or work – as well as those merely browsing furniture. This integration could also be all the more effective considering that few other retailers offer the same. Within department stores like John Lewis, furniture and smart technology tends to be kept separate, meaning the store is unable to capture interest from people browsing for furniture or vice versa.
Will it succeed?
Ikea’s slow and steady approach to the smart home market is shrewd. With the few items it has released so far, the retailer has generated surprisingly decent sales figures. Björn Block, Head of Ikea’s Home Smart division, told Wired that “sales have exceeded expectations, both in volume and variety of items customers have picked up.”
If Ikea continues to learn from each release – both in terms of what consumers want and how to deliver it – the retailer could continue to generate real success in the smart home market, and perhaps make this kind of technology more mainstream than ever before.