A smart home is where the bot is
Within
a decade, our living spaces will be enhanced by a host of new devices and
technologies, performing a range of household functions and redefining what it
means to feel at home.
The promise of devices that not only meet our household needs but
anticipate them as well has been around for decades. To date, that promise
remains largely unfulfilled. Advances such as the Nest thermostat by Alphabet
(parent company to Google) and Amazon’s Alexa personal assistant are notable,
but the home-technology market as a whole remains fragmented, and the potential
for a truly smart home is still unrealized.
The rise
of the homebots
How business can prepare for the next wave of
innovation.
A tipping point may be
at hand. Increased computing power, advanced big data analytics, and the
emergence of artificial intelligence (AI) are starting to change the way we go about our busy lives. The vision we present in this article may seem “out there,” but it simply represents
the confluence of those technological developments and realization of existing
trends. Those trends, along with what’s just on the horizon, according to our
research, suggest to us that within a decade, many of us will live in “smart
homes” that will feature an intelligent and coordinated ecosystem of software
and devices, or “homebots,” which will manage and perform household tasks and
even establish emotional connections with us.
A smart home will be akin to a human
central nervous system. A central platform, or “brain,” will be at the core.
Individual homebots of different computing power will radiate out from this
platform and perform a wide variety of tasks, including supervising other bots.
Homebots can be as diverse as their roles: big, small, invisible (such as the
software that runs systems or products), shared, and personal. Some homebots
will be companions or assistants, others wealth planners and accountants. We
will have homebots as coaches, window washers, and household managers,
throughout our home.
We are already entering this new era. In
two years, we expect to see more items in our living space become
interconnected—the formative first stage of a new home ecosystem. In five
years, numerous tools and devices in the home will be affected. And in ten
years, smart homes will become commonplace and will regularly feature devices
and systems with independent intelligence and apparent emotion.
That level of home improvement presents
significant opportunities, threats, and changes for appliances and devices that
have been part of our home life for generations. The new home will be built on
a foundation of platforms and ecosystems, whose producers will need to
establish new levels of trust with their customers. Competition will take place
not just for the consumers who inhabit the smart home, but for the interactions
between consumers and homebots that increasingly will shape buying behavior.
It’s not too early for a wide range of players to start laying the groundwork
for success in the home of the future.
The new
homebot landscape
When we envisage smart homes to come, two
core features are starkly apparent.
Platforms
Platforms will provide the foundation to
integrate different devices while providing a consistent interface for the
consumer. Frontrunners include Amazon, Apple, Google, and Samsung; start-ups at
various points in the development cycle will be part of the mix, as well. The
winners will deliver omnipresence though ubiquitous connectivity and
go-anywhere hardware, as well as integration, with bots collaborating among
each other and linking to third parties’ products and services. If the recent
past is any indication, it’s likely that multiple platform standards will
evolve. That will present complexities both for consumers and businesses but
will foster new, niche opportunities, as well.
Product
and service ecosystems
Developers will create bots that plug into
the new and various platforms. In short order, this combination of platforms
and bots will mature into an ecosystem of products and services. Platform
companies are likely to develop their own AI-driven bots (the descendants of
Amazon’s Alexa and Apple’s Siri, for example). Many other creators will develop
unique homebots that integrate into different platforms, much as the apps of
today have been developed for Android and iOS, which support the impressive
mobile-device ecosystems we see now.
Likely, too, a hierarchy will emerge: we
can expect a “master bot” that acts as general manager, juggling many services;
“service bots” that handle a set of functions related to a more complex task
such as managing media; and “niche bots” that perform single tasks, such as
window cleaning. For now, put aside grand visions of a single, Jetsons-style
Rosie the Robot replacing a human maid in toto; think instead of multiple bots
performing separable, specific tasks. Well-defined scope presents much less
risk of error. “If you have a robot at home,” notes Gary Marcus, a futurist and professor of psychology at New York
University, “you can’t have it run into your furniture too many times. You
don’t want it to put your cat in the dishwasher even once.”
Trust
will be a must-have
To better understand the homebot
opportunity and potential obstacles to its realization, we conducted in-home
and mobile diary studies in Japan and the United States with dozens of
consumers who are already using AI products or services where they live. We
found that satisfaction with individual smart devices runs high. Today, people
are quite willing to invite homebots into their lives to address a broad array
of specific use cases: from doing individual chores to completing a more
complex set of tasks to managing even certain elements of child and elder care.
But we also found there’s a crucial
variable that will determine the speed and extent to which consumers truly
embrace smart homes managed by homebots. The overwhelmingly determinative
factor for consumer acceptance that emerged from our research was trust. Trust
is initially based on the bot’s ability to perform its task, as might be
expected. That does not always go as planned. But once trust is established,
people are willing to cede more responsibilities to devices and systems powered
by AI. One key to creating that trust will be creating bots that are more than mere automatons.
After all, humans are wired for emotions. Our research confirmed that consumers are satisfied
when a bot gets a task done, but they are
delighted when there is a more personal, emotional element to how the bot does
it.
Competing
through homebots
At the same time as competitors in the
smart-home space are figuring out how to create trust, they also must learn how
to compete in a new landscape where the winners are influencing the homebots
themselves. As consumer–bot interactions become a new nexus of competition, a
variety of players will need new skills in designing bots, marketing products
and services to them, and building business models that exploit their position
at the center of the home.
Designing
bots
Increasingly, designers will tap into and
even advance data science to develop solutions that go beyond addressing static
insights. Likely, that will entail solutions that are at least in part
AI-driven, in order to react instantly and evolve constantly for the needs of
customers. By understanding customers through a variety of approaches including
ethnographic research and AI-generated insights, designers can help guide
businesses through the complicated tangle of interactions and diverse
engagement models. We expect solutions will migrate from screen-dominated
interfaces to more physical and even atmospheric interactions. Companies that
have more compelling and intuitive engagement models between bots and
consumers—and can achieve significant market penetration first—will hold the
competitive advantage.
To become machines that are truly integral
to peoples’ home lives and to establish genuine trust, bots will need to
connect with and relate to humans. That’s hard, and it goes beyond AI to the
realms of artificial emotion (AE). AE encompasses attributes such as tone,
attitude, and gestures that communicate feelings and build an emotional
connection. Consider Alexa. Several of our interview subjects told us that they
think of Alexa as a friend. That doesn’t develop from merely providing the
train schedule when asked. It comes because Alexa evokes a sense of support,
through its sensitive omnipresence and nuanced voice interaction. Interacting
with Alexa really is like talking to a friend.
Marketing
products and services to bots
As consumers trust bots more and in turn
cede to bots more control over their home management, people will become less
involved in the active decision making that goes on in daily home life. For
providers of home goods and services, this means that bots will increasingly
become the customer— or at least an important intermediary between a selling
business and a human purchaser.
Marketing for bots certainly gives new
meaning to the term robocalls. But it also poses a serious challenge: How can
businesses position their products and services to a bot so the human consumer
will passively allow, or actively ensure, a purchase. We expect that the
marketer’s mission will be comparable to the steps one takes to rank one’s
product or service at the top of an Internet search result. Just as companies
focus on search-engine optimization, they will need to develop metadata and
tagging systems that are optimized for homebots.
Given the simplicity of automated
purchases and refills for many household products, sellers will need to focus
on getting into a homebot’s “consideration set” and optimize features to win
the likely comparisons embedded in a purchase-decision algorithm. That calls
for an approach that is much harder than “one and done.” Given the speed and
reach of AI, providers will have to monitor bot purchasing behaviors
continuously and be vigilant in tracking competitors’ moves going forward.
The stakes are real; a shift in AI
preference toward a competing product could reduce demand to zero. The once
all-powerful intangible power of a brand may now be reduced to a tangible sum
of its parts. As AI gathers inputs across consumer networks, unpleasant
consumer experiences or negative feedback could have near immediate impact on
bot purchasing preferences. As a result, analytics and marketing will need to
be rapid, responsive, and agile. Consumers who can’t be bothered to search for
the right purchase or are overwhelmed by the complexity of choice can have a
homebot scan constantly based on variable individual preferences (such as cost,
appearance, and durability).
Evolving
business models
We expect that a wide range of homebot
business models and use cases will emerge. Not only could homebots be purchased
or rented for a specific task, people may share or rent them out to others.
It’s conceivable that networked bots will work together across households, for
example, to increase processing power, share expenses, or even partake in buyer
co-ops to benefit from bulk pricing. Each of these models creates opportunities
for new revenue streams.
The greatest source of value may come from
the data. Bots will acquire and generate reams of information, and these data
points will be critical for increasingly data-driven projects and services.
Data will be sources of insight and even products in their own right. And
understanding the implications, opportunities, and information about the smart
home won’t be someone’s part-time job. It will require a dedicated team to
parse the data, develop strategies, manage partnerships, and drive experiments
that will become integral to creating value.
Laying
the foundation
Businesses that seek to compete in the
smart home can begin their housework early. A network of functioning bots is,
in effect, an ecosystem of capabilities. Each bot will need to follow standard
protocols to communicate with one another. But while a house may be bounded by
four walls, a homebot ecosystem extends into the ether; it has to, as bots will
need to interact with markets and networks around the world. Smart cars,
wearables, and mobile devices are but a few examples. How all those systems
“talk” to one another will be the core IT challenge for the foreseeable future.
On the technical side, mastery demands an intimate
understanding of AI technologies and how they work with one another. On the
strategic front, it’s worth the effort to identify what your company’s
competitive advantages are or may become and then imagine how these advantages
could align with the homebot value opportunities that are likely to emerge.
Remember: the smart home will require different parties to work together. It’s
not too soon to take note of players developing complementary—or potentially competitive—capabilities,
and consider opportunities for potential partnerships. Most important, keep in
mind that the success of homebots and smart homes is not wholly about
technology. Rather, smart homes and bots are about how technology makes us
feel. The objective is to meet the needs of human consumers and to make a house
feel like home.
By Jean-Baptiste Coumau, Hiroto Furuhashi, and Hugo Sarrazin
http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/a-smart-home-is-where-the-bot-is?cid=reinventing-eml-alt-mkq-mck-oth-1701
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