By Christopher Mims
When tenants first walk into their new apartment at the Brandon
Place complex in Oklahoma City, they aren't likely to notice
anything out of the ordinary for 2019 -- there are smart locks on
the door with keycode entry, and contemporary thermostats with LCD
touch screens. During their move-in briefing, they're told the
unit's smart systems can be operated from Amazon.com Inc.'s
Alexa-powered devices. But they aren't told how hard Amazon worked
to get those devices into their new home.
While Amazon's smart-speaker competitors, Alphabet Inc.'s Google
and Apple Inc., are striving to grow their user base by luring
individual buyers with more elegant or higher-quality products,
Amazon has figured out a way to get into millions of homes without
consumers ever having to choose its hardware and services in the
first place. Amazon's Alexa Smart Properties team, a little known
part of its Alexa division, is working on partnerships with
homebuilders, property managers and hoteliers to push millions of
Alexa smart speakers into domiciles all across the U.S.
Amazon is hoping to find a new way to build market share by
offering discounted hardware, customized software and new ways for
property managers to harvest and use data.
For Amazon, the appeal is obvious: Adding millions of new users
to its services and gaining access to data like their voice-based
wish lists and Alexa-powered shopping habits will put it further
ahead of the competition which, at the moment, doesn't have a
significant presence in rental properties and new-home
construction.
For tenants like those at Brandon Place, the smart-home upgrades
can mean getting amenities they wouldn't be able to install
themselves in a rental property. It also means being able to add
other Alexa-controlled devices, like speakers, smart plugs and
lights, more easily.
However, tenants and home buyers aren't necessarily given a
choice of smart-home technology. It might be impossible, or at
least harder, to switch to Google Home and Nest products, or those
compatible with Apple's HomeKit and the Siri voice assistant.
And there's a question of privacy: Renters, home buyers and
hotel guests are all surrendering more data as a result of these
innovations, and may not be aware of all the parties monitoring
their smart-home interactions.
'Hey Alexa, Pay My Rent'
Last November, Amazon announced its partnership with Zego, now a
subsidiary of PayLease, one of the largest rent-payment services in
the U.S.
Zego has created a system that can be installed in apartments;
each apartment gets a network of smart-home devices and a hub, the
wireless radio that helps smart devices in the home to connect to
the internet. Tenants either receive one of Amazon's Echo speakers
or bring their own, and can use it to control the apartment's
thermostat and locks, as well as other Alexa-compatible smart-home
devices the tenants add on, which now range from light bulbs to
microwave ovens. The system is already in more than 30,000
apartments across the U.S.
Zego also offers an app that tenants can download on their
phones and use to request repairs and even pay the rent. Even those
capabilities may soon extend to the Echo speaker.
"We envision a day when you can say 'Hey Alexa, pay my rent,'
and it will transfer that money from a resident's bank account,"
says PayLease chief executive Dirk Wakeham. He says his company is
aiming to roll out its Zego-built, Alexa-compatible smart-home
system to more than six million apartments in the U.S. within five
years.
As with all Alexa services, Amazon records audio requests users
make through its devices, and gives users the ability to delete
them. But Zego's system doesn't have access to any interactions
with Alexa in the apartment unless they are specifically passed to
the Zego system through an Alexa app (Amazon calls its apps
"skills"), created by Zego and approved by Amazon. Through that
skill and its own mobile app, Zego collects data specific to its
own hub and connected devices, including the smart thermostats and
locks -- enough data to paint a picture of the tenant's
experience.
"We can predict if residents are happy based on their digital
interactions with the service, which gives us more information
about whether they will renew their leases," says Zego CEO Adam
Blake. The signals that inform this prediction include the
sentiments of tenants during in-app chats with apartment managers,
whether and how many smart home devices they've added to their
apartment, and if they pay rent on time, he says.
A big driver of increased smart-home technology in rental
complexes is the potential for property managers to save money.
Simplifying the ability to grant access to contractors, change door
locks and cut back on heating or air conditioning in vacant units
helps reduce costs, says Nick Stefanov, director of IT at BSR, an
owner of apartment complexes in Texas, Arkansas, Louisiana and
Oklahoma. Mr. Stefanov says his company began rolling out Zego
systems in January, and has installed them in 225 units.
Eventually, Alexa-fied apartments with smart locks and
pre-installed Echo devices might even replace rental agents.
Initial data from trials of such systems indicates that people are
twice as likely to rent an apartment when no human is present to
try and sell them on it, says Mr. Wakeham.
The Zego partnership is the biggest push Amazon has made so far
with rental properties, but it is working on other ways to get into
homes en masse. Lennar Corp., the nation's largest home builder by
revenue (and second-largest by units), began offering Amazon's
smart speakers in an unspecified portion of the 35,000 new homes it
constructed in 23 states last year. The company will continue to
offer Alexa-powered smart speakers in new homes in 2019 and beyond,
says David Kaiserman, president of Lennar's special situations
group. A Lennar spokesman declined to say whether Amazon offered
any consideration for being featured in the company's announcement
of its new smart homes.
The global market for smart-home devices is growing quickly,
according to IDC, which projected that shipments of all smart-home
devices will increase 27% in 2019 compared to 2018. Excluding smart
TVs, IDC projects that 358 million smart speakers, thermostats,
lights, home security and other devices will ship this year. One in
four American adults now owns a smart speaker of some sort. Several
estimates peg Amazon's share of the smart-speaker market at around
two thirds of all smart speakers in use, while Google represents at
most a quarter. Apple's HomePod has about a 4% market share.
Google is also making a push to partner with builders and
property managers. KB Homes, the fifth largest builder in the U.S.
by units, offers Google Assistant-powered systems to buyers who
request them in a handful of communities, and in one development in
Irvine, Calif., they're a standard feature. Century Communities,
the ninth-largest builder in the U.S., has begun including a Nest
Hub in the more than 10,000 new homes they construct every year,
says a Google spokeswoman. Alliance Residential will roll out
Google Nest thermostats and Google Home Minis across 25,000 luxury
apartments, in a collaboration with yet another third-party smart
apartment technology and services company, Dwelo.
Apple has announced no formal partnerships with builders or
property owners.
Welcome to the Hotel Alexa
Job postings on Amazon's own website indicate the company
aspires in the future to push its Alexa service and Echo devices
into stadiums and hospitals. A spokeswoman said senior-living
communities and vacation-rental operators were also in the
company's sights.
In some cases, Amazon is willing to share data, insights and
even some of the revenue that flows from putting smart devices in
living spaces.
Marriott, for example, is the launch partner for Amazon's Alexa
for Hospitality service. Amazon is building out dashboards for
Marriott and any other hotelier that wants to use its service.
These hubs for data and insight will allow Amazon to measure and
pass on information about "guest engagement" with the in-room Alexa
devices, which will be capable of doing everything from making
restaurant recommendations to adjusting the thermostat and ordering
fresh towels. They will not, however, allow hotels to hear guests'
actual voice recordings.
All of these partnerships are consistent with Amazon's larger
strategy, which is to get more people using its services and locked
into its Alexa ecosystem. Ultimately, even the presence of Echo
speakers might not be necessary to continue the expansion. Amazon
offers Alexa to any manufacturer who would like to integrate the
service into its products. As companies like Zego develop their
hardware, speakers of their own devising could be part of the
system. Eventually, it could be as if the buildings themselves were
extensions of Alexa -- and Amazon's ever-growing empire.
"The devices are just endpoints," says Rohit Prasad, vice
president and head scientist at Amazon's Alexa Artificial
Intelligence, speaking about the company's existing array of Echo
smart speakers. It's getting people into Amazon's retail ecosystem
-- where they can shop, sign up for Prime, and give their data to
Amazon so it can continue to expand and improve its services --
that really matters.
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(END) Dow Jones Newswires
June 01, 2019 00:14 ET (04:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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