Smart homes are getting mainstream: 85% of Americans bought a smart device in 2020

Humans have dreamed of smart homes for decades and, when Amazon’s Alexa became widely available in 2013, it became clearer than ever that the concept of smart home wouldn’t stay in the science-fiction territory for much longer. Finally, we would be able to go to bed without getting up to turn off the lights and lock our homes while we’re away. Over the years, the CAGR of the smart home market has been growing steadily, but it wasn’t until 2020 that smart home technologies truly became mainstream.

Two factors favored this meteoric growth: on the one hand, the COVID-19 pandemic forced people to spend more time at home, and this was an incentive for them to raise comfort levels in their living space. On the other hand, the entire world underwent a massive digital transformation process, and the demand for tech solutions, in general, reached astronomical proportions. The United States, which is currently the biggest smart home market, generated $28,86 million in 2021 so far.

Contrary to expectations, financial challenges did not prevent Americans from investing in home tech in 2020. According to an independent study conducted on 1000 Americans by review platform Safewise, the pandemic did not lower tech spending. In fact, for 75% of participants, tech spending increased or stayed the same.

According to the US Census Bureau, almost 89 million people are now working from home. For better or worse, the pandemic has forced people to rediscover the relationship they had with their homes and invest in things that made them more comfortable. During the pandemic, furniture and self-care sales skyrocketed, so it was only a matter of time until smart home sales caught up.

According to the Safewise study, 85% of Americans bought a smart home device in 2020, and three-quarters of them were 44 or younger. What’s more, for 76% of them, this was the first time they purchased a smart home device. Most purchases were made by people working from home.

And it wasn’t just spending that increased. 60% of Americans also said that they spent more time using smart home technologies. Considering that the US was subject to travel restrictions, these figures come as no surprise.

Looking at the sales numbers for smart home devices, we can see two major trends: on the one hand, we have the people who invested in smart devices for entertainment purposes and, on the other hand, the ones that invested in smart devices for security and comfort reasons.

When it comes to entertainment, the clear winners were smart TVs, which can now be found in almost every American household. According to Grandview Research, the global smart TV market size is on track to exceed $292 million by 2025, as traditional TV will make way for larger screens, higher resolutions, and high-end features.

Second, on the list were smart speakers. In 2020, nearly half of all purchased smart home devices were smart speakers, and, for 2021, experts forecast that over 163 million units will be sold. Amazon, Google, and more recently Apple, have been busy perfecting their product lineup, and virtual assistants can do more things than ever before. Apart from setting alarms and playing music, smart speakers are also used to order groceries, call cabs, and interact with other smart home devices, such as lights, locks, and thermostats.

But it wasn’t all just entertainment. In 2020, people discovered that smart technologies could boost home safety and comfort and did not back away from investing in solutions that could make their lives easier. As it turns out, these solutions have evolved a lot in the past years and cover surprising appliance categories.

Take water, for instance. Most of us don’t necessarily think of smart technologies when twisting the tap, but tech and water are closer than we think. According to Filtersmart, people are becoming increasingly concerned with the quality of the water they drink, which has led to a rise in the popularity of smart whole house water systems. In addition to improving water quality by removing chlorine, chloramines, and other contaminants, these systems are also environmentally-friendly, because they reduce the need for PET bottles. As a whole, the water industry is moving towards digitization, and $6.3 billion are expected to be invested in specialized AI solutions by 2030.

Next up on the list, we have smart lights and smart plugs, which were purchased by 32%, 28% of consumers respectively.

Home safety was a priority in 2020. What started as a trend became mainstream last year:

During the pandemic, smart home safety devices served two purposes: on the one hand, they’re practical and boost home automation. On the other hand, they may discourage burglars from entering the property. For example, package theft was a major problem in the US, and many homeowners chose smart security cameras not just because they made it easier to receive packages, but also because they helped with thief identification.

The same thing happened with smart lights: their main purpose is to create a comfortable ambiance at home, but many people used them as a deterrent for burglars.

2020 created new consumer habits that will not go away anytime soon. From smart speakers to advanced home security systems, people discovered that technology can improve their lives and that the cost of a smart home isn’t all that high. Most Americans spent between $100 and $500 on tech, which is less than the $700 provided through stimulus checks. Less than 10% spent over $1,200 on smart tech. In the following years, smart home tech spending is expected to rise and reach a projected $157 billion in 2023.