Consumer preferences shape the future of Smart Home technology

A year of revival

After two years of stagnation, 2024 marked a turnaround for the technology and consumer durables market, which slowly returned to growth globally. Despite subdued economic growth and volatile political conditions, the smart home product portfolio in 13 major European markets grew by +8%** in value terms. This highlights the consumer’s sustained interest in smart home and premiumization potential that smart home products offer. The smart portfolio of major domestic appliances (MDAs) saw a remarkable +21%** increase, becoming a key driver of overall market growth. Small domestic appliances, health categories, and home automation also contributed with an +8%** growth each.

Factors influencing Smart Product Adoption

Smart product adoption varies significantly across regions. This is partly due to the affordability of the products but also due to factors like internet speed, affordability, and privacy concerns. For instance, looking at two countries with a similar privacy attitude, Germany with high-quality fixed internet speed and moderate monthly costs, holds a 38% value share of smart products. In contrast, Turkey, with comparatively lower fixed internet speed and lower cost of internet per month, has a 23% value share of smart products.

Consumer Preferences and Benefits

Leading-edge consumers are willing to pay for smart products that offer convenience and ease of use. For 57%* cite convenience a key reason to buy. This is especially true smart home appliances that simplify daily tasks like cleaning and cooking. Products such as smart robot vacuums and dishwashers are particularly popular, with smart shares of 94%** and 32%**, respectively. Smart dishwashers have grown substantially in the past 3-4 years.

Consumers are also increasingly focusing on energy (46%)* and long-term cost savings (36%) when choosing smart products. This shift is reflected in the impressive growth of “Energy Class A rated” major domestic appliances (MDAs), which surged from 12% in 2022 to 29% by the end of 2024. Smart thermostats have also gained traction, reaching a 77% adoption rate. 

Beyond energy efficiency, consumers value compatibility with existing smart products, seamless integration, and robust security features. From 2019 to 2024, smart security products such as intruder alarms, motion detectors, and smart door communication systems saw steady growth. However, significant growth potential remains, as 54% of consumers in NIQ-GfK’s Consumer Life study indicated if they buy a smart security product it would be their first purchase in this category.

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AI as an Enabler

AI integration marks the next evolution in smart products. While not always the top purchase criterion, AI enhances key smart features- which also happen to be the key purchase criterion– by optimizing performance for better energy savings and providing personalized routines. From robot vacuum cleaners to washing machines, AI-powered products deliver superior navigation algorithms and improved user experience.

Challenges and Opportunities

Despite the positive momentum, high costs (45%)* and privacy issues (41%)* remain major barriers to wider smart product adoption. To reach the mass market, more brands, a broader product range, and affordable options are needed. Most of all, a strong use case offering tangible benefits is crucial for driving consumer interest. For example, Smart TVs —with an 84% market share—offer AI upscaling, streaming access and smart features that directly appeal to consumers. Manufacturers can leverage these insights to meet the growing demand for products, ensuring they address consumer needs for convenience, security, and cost-effectiveness.

Sources

*NielsenIQ Smart Home Monitor Study Netherlands

**NielsenIQ Market intelligence Sales Tracking Period Jan-Dec 24 vs PY, Countries: EU12+TR

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Based on a partnership between NIQ/GfK, gfu and IFA Management, we regularly inform you about market developments and trends from the home & consumer tech sectors. You will receive interesting insights, current market figures, consumer trends and much more professionally prepared from the sources of the three competent partners.