Canadian Manufacturing

European home automation systems market to thrive as subscription-based business models ease financial pressures

European Commission's push to modernize buildings with energy efficiency will boost demand, says Frost & Sullivan

May 6, 2021  by CM Staff

Frost & Sullivan – European Home Automation Systems Market

SANTA CLARA, Calif. — Frost & Sullivan’s recent analysis on the European home automation systems market finds that innovative subscription-based business models are key to increase mass-market adoption of professional home automation systems in Europe. This new model would ease the financial pressure on customers by allowing them to make monthly or annual payments instead of fixed-cost offerings. The increasing demand for indoor air quality (IAQ) products and growing awareness of energy-efficient retrofitting are the main growth drivers for the European market.

By 2027, the market is estimated to reach US$1.50 billion from US$495.3 million in 2020 at an impressive compound annual growth rate of 17.2%.

“The European Commission’s renovation wave strategy is expected to boost demand for home automation systems because the focus is on modernizing buildings with energy efficiency and adopting digital measures to sustain economic recovery,” said Anirudh Bhaskaran, Energy & Environment Senior Industry Analyst at Frost & Sullivan. “Consumer awareness of the need for energy efficiency and introduction of government grants for green and energy retrofit homes will also expand the overall home automation products market—lighting, indoor climate control, entertainment control, and window/shutter/blind control—over the next 5 to 7 years.”

Bhaskaran added: “Though a professional home automation system is seen as a luxury segment of the smart homes ecosystem, its attractiveness can be improved within the mainstream segment through value-added offerings. Additionally, with low prices, the do-it-yourself (DIY) smart home products pose a huge threat to professional home automation products. This encourages home automation systems market participants to acquire or partner with DIY mid-market players to help top-end participants thrive in the market by offering value-addition and competitive pricing.”

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To tap into the growth prospects exposed by the home automation systems market in Europe, participants need to focus on the following:

  • Pandemic Recovery: As Europe recovers from the pandemic, building renovation offers a massive opportunity for all home and building industry participants, pushing the demand for home automation products.
  • Partnerships: Home automation participants should partner with companies offering IAQ products to integrate window automation/ventilation automation with IAQ sensors and offer health and wellness packages at a competitive price.
  • Payment/Business Models: Home automation companies should introduce customer-centric payment models, which will help retain and expand a loyal customer base.
  • Symbiotic Partnerships: Home automation systems participants can partner with DIY mid-segment smart home players to form a symbiotic relationship that draws on each other’s strengths to offer value-addition at a competitive price.