The cost of living crisis affects participation in the smart home technology market in Germany, as high prices slow down device purchases, as well as usage. This calls for smart devices to assist consumers in energy and cost savings.
Smart Home Technology Market Germany – Current Landscape
Despite many Germans owning smart TVs, ownership of other smart devices remains limited. The cost of living crisis has caused the cohort of 16 to 24-year-olds (the most interested consumer group in smart devices) to decide against the purchase of a smart home device. Moreover, rising gas and electricity prices are also affecting smart home device usage, calling for a need for smart devices to assist in energy and thus cost savings for consumers.
Smart home devices have the opportunity to save consumers time and money in the realms of grocery shopping, health diagnostics, and even fitness pursuits. Despite lower interest in such devices, older consumers in Germany may find increasing value from devices which can help automate tasks, allowing them to age gracefully and live a more independent life.
Smart Home Market Germany – Market Statistics
- German Smart Home Market Participation: 72% of German consumers have neither bought new electrical equipment in the last three months nor plan to do so in the next three.
- Smart Home Technology Market: 44% of smart home device owners find it frustrating getting smart home devices to work together.
- Smart Home Market Germany: 57% of Germans find it hard to know which smart home devices could be useful for them, creating the need for clearer, simpler messaging.
German Smart Home Market Report – What’s Inside?
Key Topics Analysed in this Report
- Smart home technology market drivers for the future of tech in the home, including AI, demographic factors, and home ownership rates.
- Ownership and interest in smart home devices, including the role of sustainability.
- Feelings towards the future of smart home devices and how such devices can support the ageing process.
- Consumer behaviours related to the smart home market Germany and how visualisation can encourage increased ownership.
- Launch activity and innovation in the German smart home market, including advertising and marketing activity.
Report Scope
This report examines the smart home technology market in Germany, which includes:
- smart TVs
- smart speakers
- smart vacuum cleaners
- smart lights
- smart plugs/switches
- smart radiator thermostats
- smart washer/dryers
- smart cooking appliances
- smart security systems
- smart refrigerators
- smart blinds/curtains
- smart air quality monitors.
This report is primarily based on Mintel’s exclusive primary research of consumer attitudes and Mintel’s observations of the trends in the smart home market Germany.
Meet the Expert Behind the Analysis
This report was written by Jan Urbanek, Principal Analyst at Mintel. Jan joined Mintel in 2020, writing about consumer and market trends in the German consumer technology sector. Jan holds a Master’s degree in Business Administration & Economics from TU Dortmund University. During his studies, he gained practical experience in quantitative and qualitative market research and in the marketing of electric vehicles.
To further grow the smart home technology market in Germany, it will be crucial to include older generations of Germans. Looking ahead, advancements in AI will provide an increasingly personalised home ecosystem.
Jan Urbanek
Principal Analyst
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EXECUTIVE SUMMARY
- The five year outlook for the Future of Tech in the Home
- Market context
- Poor economic situation threatens to limit investment in smart home devices
- Advances in technology may help improve usability of devices
- Mintel predicts
- Appeal to ageing Germans with devices that add practical value
- Graph 1: smart home device ownership, by age, 2024
- Graph 2: current and projected share of age groups that make up the population, 2024-50
- Ageing population presents opportunities and challenges
- Take inspiration from SmartThings’ innovation to support graceful ageing
- Opportunities
- Optimise home lighting with smart devices
- Highlight cost savings to drive purchases of smart home devices
- Time-saving and convenience can help attract older Germans
- Reach the widest possible cohort with visualisation of everyday use
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MARKET DRIVERS
- The German economy
- 2024 is expected to remain challenging
- Graph 3: key economic data, in real terms, 2019-25
- The inflation rate is bouncing back to more conventional levels
- Inflation is still the key factor affecting consumers’ finances…
- …confidence and expenditure
- Graph 4: financial confidence index, 2022-24
- Difficult economic situation creates speed bump for smart home device growth
- However, there are signs that Germans’ financial situations are gradually improving, potentially supporting market growth
- Graph 5: self-reported financial situation compared to a year ago, 2024
- Artificial Intelligence
- AI’s application to smart home appliances may improve UX, acting as a tonic to busy lives
- Matter connectivity
- Increased adoption of Matter by manufacturers may encourage wider usage by consumers
- Home ownership
- Low home ownership rates may restrict demand for certain devices
- Demographic factors
- Ageing population may be a speed bump to growth in the short term
- Graph 6: current and projected share of age groups that make up the population, 2024-50
- Graph 7: smart home device ownership, by age, 2024
- Ageing population presents opportunities and challenges
- Wellbeing
- Focus on health and wellbeing can offer a sales tailwind to smart wellbeing devices
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WHAT CONSUMERS WANT AND WHY
- Important features of the home
- Smarten up the home with reassuring comfort and security
- Graph 8: agreement with ‘it is important to me that my home…’, 2024
- Appeal to older Germans with homely tech to create cosy environments
- Appeal to remote and hybrid workers with productivity devices…
- …with smart kitchen appliances an obvious way to save time and thus promote productivity
- Focus on the cost-saving possibilities of AI-powered domestic appliances to Germans affected by rising energy costs
- Ownership and interest in smart home devices
- High levels of smart TV ownership across demographics show a willingness from consumers to embrace ‘smart’ tech
- Graph 9: ownership and interest in buying smart home devices, 2024
- Explain the value of smart hubs to those in typically smaller properties
- Graph 10: any interest in buying smart home devices, by description of current home, 2024
- Repertoire analysis reveals that finances dictate the number of smart home devices owned
- Graph 11: smart home device ownership repertoire, by financial situation, 2024
- Tap into 16-24s’ desire for smart devices with cheaper, more sustainable refurbished products
- Promote smart blinds/curtains to those with poor sleep hygiene
- Feelings towards the future of smart home devices
- Positive future potential for automation in the home
- Graph 12: feelings towards the future development of smart home devices, 2024
- Focus primarily on the time-saving benefits of smart refrigerators…
- …whilst drip feeding the sustainability message
- Clarify the time-saving benefits of domestic robots to boost interest
- Ring virtual security guard combines technology with a human touch
- Smart ring development may shift into the smart-home eco-system, simplifying device control
- Smart home health diagnostic devices can help keep ageing Germans out of healthcare facilities
- Position AI-powered mental health services as a discreet health tool
- Help consumers optimise their home exercise routines with at-home smart fitness devices
- Behaviours related to smart home devices
- Explain the value-add of smart devices to shake the gimmick tag
- Graph 13: behaviours towards smart home devices, 2024
- Visualise the value of smart home devices with real life examples
- Ageing consumers less likely to ‘smarten’ up their home set-up by replacing already functional devices
- Graph 14: agreement with “I would consider replacing a functional non-smart home device with a smart one”, by age, 2024
- Emphasise the hands-free convenience of a Matter-connected eco-system to parents of young children
- Embrace premium price tags to convince users of the safety of biometric security systems
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LAUNCH ACTIVITY AND INNOVATION
- Philips Refurb Editions claim to be ‘Better than New’
- Samsung SmartThings encourages energy conservation in the home
- Fritz! update turns product into a ‘Matter bridge’
- Miele’s Smart Food ID optimises the cooking process
- Advertising and marketing activity
- Philips gives side by side comparison between Ambilight and standard TV lighting
- Samsung Bespoke AI allows for simple energy optimisation and savings
- Samsung prides itself on quick and easy two hour All-In-One installation
- Samsung displays how SmartThings can support healthy ageing
- Ring Deutschland appeals to German way of living
- Amazon’s Alexa assistant demonstrates the ease of voice control and automated routines
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APPENDIX
- Appendix – products covered, abbreviations, consumer research methodology and language usage
- Products covered in this Report
- Abbreviations
- Consumer research methodology
- A note on language
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