Manufacturers answer consumer demand with a variety of smart thermostats that integrate with various connected home products and platforms.

The development of Wi-Fi in the late 1990s, and then the availability of low cost, more powerful microprocessors in the early 2000s really accelerated the development of smart devices in general, including smart thermostats.

Thermostats, initially, evolved into connected thermostats, and connected thermostats evolved into what, today, we call smart thermostats. The smart home/connected home category has really become a huge opportunity for HVACR contractors to expand their offerings, as manufacturers continue to develop these products aimed at consumers.

I recently spoke with a handful of executives at many of the top manufacturers to get their thoughts on smart thermostats and connected home devices, what innovations contractors need to be aware of and the changes and challenges that lie ahead.

This Executive Roundtable panel included Casey Klock, product marketing manager at Aprilaire; Derrick Boyce, vice president, sales at ecobee; Craig Johnson, president, residential solutions at Emerson; Glenn Savage, controls engineer at LG Air Conditioning Technologies; Rob Munin, general manager, thermostats and sensors at Johnson Controls; Matt Robbins, vice president/general manager of comfort at Resideo; Raheel Chaudry, senior product manager, controls at Rheem; and George Land, general manager, digital products at Trane.

Our panel includes:
Casey Klock Product Marketing Manager Aprilaire
Derrick Boyce Vice President, Sales ecobee
Craig Johnson President, Residenial Solutions Emerson
Glenn Savage Controls Engineer LG Air Conditioning Technologies
Rob Munin General Manager, Thermostats & Sensors Johnson Controls
Matt Robbins Vice President/General Manager of Comfort Resideo
Raheel Chaudry Senior Product Manager, Controls Rheem
George Land General Manager, Digital Products Trane

How have smart thermostats and home automation products evolved in the past few years?

Boyce: If you think of a thermostat as an example, they’ve evolved from basically dumb devices on the wall that just controlled your heating and cooling, and they required that personal interaction to make any changes or adjustments, to evolving into adding Wi-Fi, to where the next phase of that evolution is really into smart thermostats that act as a central point for your connected home. It’s like having a computer on your wall.

Chaudry: More and more appliances have built-in connectivity nowadays. What makes a house smart is that these appliances communicate both ways within intelligent cloud. And now we are seeing that they talk in a mesh network with each other as well. That is the latest trend … appliances and devices are talking to each other without intervention from humans, as well as without talking to the cloud and making smart decisions by themselves.

Johnson: In recent years, we’ve seen a shift towards IoT technologies becoming the norm in the residential market. Customers have a greater interest in being able to control their own comfort and IoT technology allows customers to make adjustments that affect comfort remotely, particularly when traveling or away from home for an extended period of time. Customers also control their system from their mobile app while at home.

Klock: The evolution really relates to connectivity, especially in new construction. The trouble we’re still working through and the opportunity, really, is figuring out interoperability. You have all these different connected devices and all these subsequent apps, and it’s a proliferation of both right? So, how do you figure out how to work well with one another so that you can have a really good user experience and one or two minimal number of apps that really serve all the home’s needs in terms of connectivity.

Land: It started off with the connected thermostat. It was around remote control, being able to adjust your system or check on it when you weren’t home. With the addition of Alexa and the other voice assistants, it really added the experience of being in the home, having enhanced control. As smart thermostats became the norm, we had sensors, wireless sensors around the house to optimize comfort. Today, there’s holistic integration with ceiling fans, lighting, ventilation management, advanced humidity management.

Munin: I think back just five years ago, and it was very much a single point entries into the home. You had lighting, you had a thermostat, then cameras became big. Then of course the voice assistance became effectively the default hub of the smart home that’s not related to security. The thermostat needs to be intuitive at the wall and needs to be easy to use in the app. The evolution that I’ve seen in the industry for HVAC contractors has really been, over the past five years, a very rapid uptick of adoption and acceptance.

Robbins: The install and registration journey is getting easier for customers and pros. Another thing that’s gotten really better too, is customer communications on the back end.

When you have the app and when you have an app-based technology, you’ve also got access to emailing customers or communicating to them through the app. And there’s an opportunity to talk to them about the impact of their choices on energy use, on system performance and on whether they need to change their filter.

Savage: From a technical standpoint, they have evolved by going from scheduling to direct access and proprietary communication and control protocols to open communication and control protocols. This is a huge benefit to the industry as it offers a good amount of flexibility to the homeowner. Each family member now has the ability to control the comfort of their individual space.

What innovations are manufacturers introducing in this space?

Boyce: It all starts with having a great user interface. Products have to be easy to use and simple for customers to understand. That’s really important in how we design our products. Integration capabilities is really important as well, having the flexibility or providing the consumers the flexibility to choose how they build out their connected home experience.

Chaudry: Customers want features that are meaningful and helpful within their lives. Smart appliances must enhance their experience with the product and be meaningful to their lifestyle and needs. Technologies must be easy to use, intuitive and customizable.

This is driving innovation for us in terms of connectivity, data analytics, better user experience in terms of both appliances, as well as the peripherals, such as the thermostat and more cellphone apps.

Johnson: Remote diagnostic IoT, such as the Sensi Predict — a predictive maintenance solution with an innovative new 10-sensor system that provides real time data on HVAC systems — is one trend we’re expecting to see become more and more commonplace. Proactive and preventative maintenance is becoming increasingly important as contractors are seeking to do more with less.

Klock: The trend, and it’s not there yet, is going beyond temperature and humidity. It’s how do you incorporate the system, or the air as a whole, into one system. And it’s much more than just temperature and humidity.

Land: We’re seeing mass customization toward what’s best for the consumer for their particular situation, so whether that’s the way they choose to interact with the system, whether they like to interact with the thing on the wall, the thing in their hand or through their voice. Optimizing comfort is another piece. There’s so much we can do now with integrating different pieces in the house.

Munin: We have data that say consumers use our app two to three times a week, which is pretty consistent across the thermostat manufacturers. When you think about it, aside from maybe a newsfeed, social media, there’s not a lot of other apps that people go to that often. It’s important that the app is intuitive, that it’s helpful and that it’s an opportunity for contractors. At JCI, we’re launching a brand new app and a brand new platform, and with that will be a development in the future opportunities for branding, for contractors inside of the Lux app, brought to you by JCI.

Robbins: When the industry started out, it was you could connect one device and that was great. Now we can do so much more. One thing we’re excited about is our T9, T10 product line being able to connect to remote sensors. You can control your thermostat, not just off of the local temperature, but of the temperature in the room you’re in, using integrated motion sensing. Or, if you want, use a weighted average of temperature at multiple points in your house so that you could feel more comfort and more control. And just being able to connect multiple devices into an integrated ecosystem is something that’s really exciting.

Savage: Manufacturers have moved from proprietary to open protocols. This gives both the contractor and the consumer more choices and an improved user-experience in a connected home.

Is this category being driven by consumer demand?

Boyce: It’s not only driven by consumer demand, but the adoption is critical to creating awareness. Consumer demand is a driver of change. Connected products are no longer nice to have, it’s an expectation.

Chaudry: We do see demand from both the high-end homeowners, homeowners who want high-end equipment and are interested in smart technologies as well as partners, such as utilities, aggregators and co-op, electrical co-ops. From that perspective, the demand is there from the customers.

Johnson: Remote diagnostic IoT is a win-win for both homeowners and contractors because it optimizes installation, maintenance and performance efficiency by keeping both contractors and homeowners in the know throughout every stage of the process.

Klock: It’s a little bit of both. If you look back to cell phones, at first it was, “Okay, that seems like a really nice luxury.” Now it’s a necessity, right? We’re still on the early adoption phase of smart homes. I wouldn’t say its mainstream completely yet, especially on the smart home side, but with all the different technologies, it’s becoming that way.

Land: Initially, retail led the smart thermostat category, as an early adopter. Consumers did proactive replacements. They saw the value proposition and wanted to bring it into the home. But now, that’s led to widespread consumer awareness and consumer demand. There’s recognition by contractors of how much smart technology can elevate their customer satisfaction and referral rates and also how it can help them in their business.

Munin: Smart thermostats started as a tech adopter categories. The benefits of a connected thermostat are real. All of the feature and benefit points make a ton of sense to consumers. To get to the mass adoption, our philosophy is we need to have value for the homeowner to jump into this pool, and we need the contractors to see that as an opportunity for them.

Robbins: There are segments of home automation that are manufacturer driven. But at least in the HVACR space, I think customers have a real desire for greater control and integration of their systems and finding ways to save energy and simplify operation. There is a lot of customer pull for these products, and I think we’re only going to see that grow.

Savage: Many of the contractors we have talked to have said that this is a huge differentiator in the market. Having the ability to offer a product that is both energy-efficient and “smart” brings in more sales as consumers have come to expect technology driven product offerings.

How are HVACR contractors best positioned to sell this type of equipment?

Boyce: Homeowners trust their pro contractors, so they’re in a great position to influence that decision-making. It’s a great way to strengthen the relationship with the homeowner by adding that additional value, and it’s an opportunity for contractors to increase their revenues without deviating from their core business.

Chaudry: People really want to customize solutions. And, typically, they want high-end equipment that is highly efficient, highly customizable and so forth. That is the easy target for the contractors for this type of equipment.

Johnson: Offering smart thermostats allows contractors to provide an easy solution for their customers to control comfort and save energy. With diagnostic technology, contractors are more likely to know exactly what to expect prior to a service call and ensure that the right person and the right parts are on the truck. This optimizes contractor efficiency and credibility with customers.

Klock: It creates engagement with their customer. Today, it’s almost more reactive type relationships where with connected products, it can be more proactive, whether that’s the dealer now has access to equipment details, or maybe it’s a replacement of a consumable like a filter, or maybe it’s a, “Hey, I don’t think your equipment’s running very well because of ABC,” instead of waiting for the customer to call and tell you their furnace is down. As the equipment and analytics get better, it’ll be more on the preventative side.

Land: Contractors are the comfort experts that customers rely on for our complete solutions. It’s not as much about HVACR contractors selling home automation as it is educating consumers on how much more comfortable, how much more efficient, how much better their air quality can be, by leveraging what’s now mature technology.

Munin: There’s really an opportunity for contractors to capture more of the smart home. There are very few industries where millions and millions of homeowners, consumers, twice a year allow professionals into their house to work on the most expensive part of their power plant, if you will, the HVAC. I think that’s a major opportunity.

Robbins: HVACR technicians are really unique in the marketplace. They go into customers’ homes and they solve a problem in the time of need. They’re heroes to a lot of customers. They have a deep and special expert relationship with customers that I think puts them in a great position to sell more home automation and introduce home automation to customers more broadly.

Savage: In a competitive marketplace, the ability to offer a connected home solution makes LG an attractive solution. Homeowners are demanding more connectivity and a smoother user experience from their home appliances and systems. The ability to offer smart technology, tips the scale toward the manufacturers that can offer a connected home.

What’s the efficiency advantage to smart thermostats?

Boyce: It comes to the intuitiveness of the product. When the smart thermostat brings on the heating and cooling, it understands how long it needs to run in order to hit the desired set point. It’s looking at a number of variables, what’s happening outside the home, what happens inside the home, the desired set points for the homeowner. Over time, it intuitively learns how to maximize the efficiency and the energy savings when heating and cooling a home.

Chaudry: Absolutely. There’s the savings that come with not only programmable thermostat, but also systems that allow for geo-fencing … that definitely helps with up-selling the equipment as well as thermostats.

Land: There’s an enormous opportunity to make sure that the energy you’re expending to be comfortable is only what you need and not wasted on heating or cooling for times or places that you don’t care about or that you aren’t there. There’s a huge efficiency play in the remote diagnostics. Many times, a consumer is comfortable, but their system is running inefficiently because it’s not operating at peak performance. With remote diagnostics, we can detect that, and we can notify the homeowner, notify the contractor they’ve got a customer who is comfortable but is very inefficient.

What education do you offer contractors for this type of equipment?

Chaudry: Rheem has innovation learning centers with a variety of curriculum set up all over the world. We have five in North America, which give contractors the opportunity to learn about our smart home products, as well as spend time in a hands-on experience that brings learning to a new level.

Johnson: Contractors must complete an online training course to learn more about Sensi Predict’s benefits and the steps to offer the solution to customers. Sensi thermostats were designed with pros in mind. With special installation features including a built-in level, terminal lights and easy click terminals, technicians of any skill level can easily and quickly install a Sensi thermostat so they can get on to the next job.

Klock: We do webinars. Most of them are virtual now, but we were very well known for our in-person webinars. And we still do those to some extent, but just not with the pandemic going on. We also have a really great Aprilaire partners website to help with the education information ... it contains a lot of videos and content to inform and educate.

Land: Our in-person classes are currently paused, but we have a full suite of online training modules, which, this year, have become more popular than ever. We also offer direct consumer support. We don’t want contractors to be the IT service desk. We’ve got people to help consumers with sort of that first line of questions.

Munin: We do a lot of outreach at the individual level, at the distributor level with their customers who are the contractors and just education. We do series of webinars. We worked with a couple of the buying groups, so we have access to some teaching tools there, and it’s a constant effort on our part to figure out how best to educate dealers and the contractors so that they’re comfortable.

Robbins: One of the things that we’re excited about expanding next year is our Pro PERKS program. An element of the loyalty program is access to high quality online training so that contractors can understand the features of our products, the key selling propositions, the product expansion and extension opportunities, but they can also learn how to perform installations and how they can maintain the systems that we provide and create.

Savage: We offer training in our LG Air Solutions Academies for all of the controls products we sell.

Has availability of these devices in big box stores helped or hurt contractors?

Boyce: There’s always a contentious point between professional and the retail side of the business, but it drives awareness and awareness drives demand. Homeowners will research products and typically have a good idea of what they want regardless. Our pro business is on an accelerated growth trajectory and has been for quite some time. A big part of the awareness and the spillover that you see from that retailer big box side really helps in the professional side of our business.

Chaudry: We really are not competing with the smart thermostats sold in big box stores. Those devices allow for connectivity, yet they’re limited in the amount of information and control that they give to contractors and homeowners. Our job as an equipment manufacturer is to use the smart thermostat to maximize affordable home comfort in a way that DIY smart thermostats cannot do.

Klock: It’s created a demand from consumers, as well as created some competition. It’s important to differentiate between a pro or trade installed model and a consumer DIY installed model, because frankly they’re different. And so, as product managers, we need to be aware of that and differentiate accordingly for those different needs.

Land: Sometimes the retail price point changes what contractors do, in terms of a pricing strategy, when they itemize their items. But overall, the retail channel, from what we’ve seen, has helped contractors by creating awareness of the category and creating that sort of consumer demand for a feature-rich experience.

Munin: Lux is a brand that lives in the big box retailers and also lives in wholesale distribution for the pros. Five years ago, the professional side of the fence was vehemently opposed to any of that. Then, frankly, with the maturation of how we all connect with technology, it’s ubiquitous. It’s impossible to wish it away. I get more of the big distributors that the contractors will be served from saying to us, “are you in the big boxes? Because we don’t mind. We actually like it, it helps generate some demand for us and awareness of these products.”

Robbins: I think these absolutely help contractors. I think we’re creating market awareness around a high quality and compelling product.

Savage: No, one of our controls accessories allows our customers the ability to use the devices that are sold at those big box stores with our equipment. It also opens up discussion with our contractors about what controls are appropriate to use with our equipment and what the advantages and disadvantages are.