Smart Home Spending Remains Strong Despite Cost-of-Living Crisis

Consumers have no plans to reduce spending on digital home products despite the ongoing cost-of-living crisis, a new EY survey has found.

The report surveyed more than 21,000 consumers across eight countries; the U.S., Canada, France, Italy, South Korea, Spain, Sweden and the U.K. 

Among respondents, less than one in five digital households (16%) have reduced or plan to reduce their spending on home broadband, mobile connectivity or streaming services, while around a third (32%) have not taken any measures identified by EY to reduce connectivity spending.

These figures come despite rising concern among respondents as to the increased cost of services such as broadband and streaming platforms (cited by 63% and 60% respectively).

Counter to this concern, respondents also displayed an increased willingness to pay more for premium services, with 40% of respondents willing to pay more to access all content via a single platform, rising to 50% in the U.S. and 51% among 25- to 34-year-olds across all markets.

“Consumers are reprioritizing as society adapts to hyperinflation, yet broadband and connectivity offerings have in many ways weathered the storm,” said Tom Loozen, EY’s global telecommunications leader. “Improved value perceptions are encouraging for connectivity providers, suggesting their bundle propositions are resonating well. 

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“This is not only intensifying competition but presents huge opportunities for providers that can differentiate themselves by offering superior customer service and network reliability through the lens of simplified packages that appeal to all demographics.”

While the majority of smart home products have a positive outlook despite the wider economic landscape, new products and services are anticipated to see slightly less positive uptake. 

Nearly half of households surveyed (43%) said the cost-of-living crisis has made them less likely to purchase new connectivity and content experiences, while 48% said they are less likely to adopt new technologies and gadgets for the home. 

High numbers of market players also mean consumers are facing choice paralysis, with EY’s report highlighting the need for providers to distinguish themselves to stand out from the crowd or risk falling behind. 

“Streaming providers need to be as agile as possible when pricing and positioning their packages if they are to cut through an increasingly crowded landscape,” said Adrian Baschnonga, EY media and telecoms lead analyst. “Meanwhile, connectivity providers should take steps to address persistent issues around reliability, whether by educating customers around how to maximize signal strength or providing more proactive support during network outages. 

“Better levels of brand trust will be critical to smart home providers if they are to accelerate adoption of new technology for the home.”