Encouraging incremental smart-home purchases may be tech retail’s most valuable opportunity as sales of smart speakers continue to grow, new research from The NPD Group suggests.
Sales of voice-activated speakers are expected to grow 50 percent by 2019, NPD said in releasing its two-year “Future of Tech” report, helping the streaming-speakers segment reach nearly $2.7 billion in that time. Smart speakers will account for $1.6 billion in that period.
Sales of home automation devices, meanwhile, will reach $1.7 billion through 2019, with 19 percent of consumers planning to purchase a device in the next 12 months.
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“While many new households will explore the smart-home experience in the next two years, propelled by the growing ownership of voice-activated speakers, the biggest and best opportunity for retail may remain in encouraging the installed smart-home base to make incremental device purchases, and to then provide services to help consumers fully leverage the technology in their smart home,” said Stephen Baker, VP, industry advisor for NPD.
“For example, upgrades in networking equipment are a crucial incremental sales opportunity,” Baker noted. “As the number of connected devices on the home network increase, consumers will come to the realization that they need better equipment to support those devices.”
Home wireless networks are becoming strained by the increase in smart-home and video-streaming devices, NPD said, motivating consumers to upgrade to mesh Wi-Fi networks. U.S. mesh networking sales are expected to grow 88 percent from 2017 to 2019, with about half of every dollar in the consumer networking category spent on mesh Wi-Fi, according to the market research firm.