Subject: Z‐Wave May/June 2019 NewsletterFrom: "Z‐Wave Alliance" <janet@z‐wavealliance.org>Sent: 6/26/2019 11:25:29 AMTo: Rick@z‐wavealliance.org;

NEWSLETTER MAY/JUNE 2019

Reflections on Smart Home Trends in Europe

The Alliance­hosted Z­Wave Summit was always supposed to be about bringing together thebrands, manufacturers, OEMs, integrators and thought leaders. We had held it for severalyears in the U.S. and as the European IoT markets grew stronger, so did our memberpresence in Europe and surrounding regions. So, several years ago, we began hosting the Z­Wave Spring Summit on the other side of the Atlantic and it's been one of my favorite eventsever since.

When we look at the European market from the States, we often look at it as just that ­ onemarket, lumped together for purposes of data, metrics and comparisons. But the truth is,Europe as a region is diverse in its needs, cultural norms, expectations of home andtechnology, design and aesthetic, buying behaviors ­ I could on and on. Having conversationswith individual members and participating in big group discussions at last month's Summit, I'mconvinced more than ever than smart home brands must have a nuanced approach to the"European" market if they are going to make headway.

But there's reason to crack the code and do the work to make smart home work in countrieslike the UK, Germany, Sweden and France. In fact, the countries in the European Union, plusthe United Kingdom and Germany (counted separately here) have consumer markets thatroughly equal the size of the U.S. consumer market which as of 2017 was 26% of the globalmarket and just over $13 trillion.

So, there is buying power in these countries and certainly a desire to feel safe, secure andcomfortable in their homes as well. But a one size fits all approach isn't going to work ­ ourmembers who are working to serve various markets in and around the EU consistently saythe same. The cultural, language and behavioral differences create barriers and require a

company to create a unique approach and strategy for each country and market.

In this newsletter issue, we're looking at trends in the European Z­Wave ecosystem andtakeaways from our Spring Summit. We'll also explore important issues for marketers to payattention to including decoding social media algorithms and best practices and considerationsthat realtors and builders can use when selling the benefits of a smart home.

As we head into mid­year, I'd love to hear from our subscribers. What do you see ahead forthe remainder of 2020? Have you started planning for CES yet? Drop me a line and let meknow, we might use your predictions in a future piece!

­­ Mitchell KleinExecutive Director

UPCOMING EVENTS

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CONSUMER CORNER

How to Sell the Smart Home to Home Buyers

In the last year or two we've seen a significant shift in adoption rates and the growth ofsmart home. Before then, smart home was still primarily a buzz word for a niche group ofconsumers and in the media, but now with technology like mobile phones, computers,banking, and the various other ways we are connected developing and becoming a greaterpart of everyday life, getting folks to open up to smart home tech is coming about morenaturally.

As the smart home becomes more popular, realtors, builders, integrators and othersresponsible for selling the smart home have a unique opportunity to increase buyer interestthrough selling them a seamless smart home experience; Communicating benefits likesecurity, reduced insurance rates and increased energy efficiency. Smart homes work aroundthe clock to monitor, protect and secure the property so homeowners aren't left wonderingabout the status of their home.

In honor of June National Homeownership Month, we pulled together some thoughts forrealtors and others in charge of selling the smart home to capture buyer interest and supportlarger consumer education.

Communicating the benefits of interoperabilityIn the smart home's pursuit of interoperability, it is more important than ever to ensure thatour devices can communicate with each other. Wireless protocols like Z­Wave are at the coreof every smart home and they are the backbone to connectivity, allowing for all the varioussmart devices to work together in sequence. This importance is not lost on smart homebuyers: Studies show that 60% of smart home buyers want a device that works with theproducts they already own.

When considering a smart home, it's important for homebuyers and real estate agents sellinghomes to educate themselves on the products that were installed and the networks they runon. Wireless network protocols aren't something a lot of mainstream consumers think about,but they're incredibly important to the success of a smart home system and ultimately, thehomebuyer's enjoyment of the technology for years to come. Wireless protocols/technologiesare at the core of every smart home. If a homebuyer tries to add devices that aren'tcompatible with the hub that is powering the home, they won't be able to use them, so it's

important to build that message in when talking about a smart home.

Security and convenience are two key selling pointsSecurity and convenience are some of the most attractive features for smart homecustomers. With smart home security, devices can be installed to monitor a home's activity24/7, giving users the opportunity to check in on the status of all their devices from onemobile app. Convenience is another big benefit to a smart home. A smart home allowshomeowners to remotely manage their home from anywhere at any time to access functionslike turning off lights, adjusting their thermostats, monitoring activity and more. It alsopresents them with important data that is recorded while they are asleep or away, like whena door was opened and at what time, or when motion was detected on their property, andthey will be able to take action swiftly if needed.

It is important to help buyers understand how a smart home can work in everyday situationsand benefit their life. Pointing to tangible benefits or even performing in­home demos asexamples can help buyers better understand how a smart home would work in their lives.

Answering questions around privacy and securitySecurity and privacy are two flags often raised by consumers on the fence about purchasinga smart home. It's imperative that homebuyers understand that smart home can be easy, andit can also be secure. Those selling the smart home should be sure to reiterate that buyingproducts that are certified and have been tested to be secure and work with other devices ina protocol's ecosystem, like Z­Wave, is very important. Talking about steps that Z­Wave istaking with initiatives like the mandatory Z­Wave Security 2 (S2) protocol is a good way toshowcase the importance that Z­Wave is placing on security compared to others in theindustry.

It's also worth sharing wireless network best­practices with buyers such as not sharing orreusing passwords, or resetting all passwords for every hub, gateway, router, end device inthe home to eliminate access to the home from previous owners and installers, and to ensureprivacy.

What lies aheadFor customers who are on the fence about adopting smart home technology, realtors,builders, and integrators have the opportunity to communicate these unique benefits anddemonstrate the value of these devices.

Attachment rates for smart home will only continue to grow as consumers become morecomfortable with this technology. It's important that we together take steps to help driveawareness of its benefits, as well as best­practices for using smart home to ensure continuedgrowth.

MARKETING MATTERS

Decoding Social Media Algorithms in 2019: What You Need to Know

Ever wonder why some social posts your company shares receive a lot more engagementthan others? Or why you never seem to be able to get beyond a certain follower or post likescount? You have social media algorithms to thank for that. Facebook, Twitter, Instagram,LinkedIn and others all use certain algorithms or automated rules and systems to prioritizecertain content, keywords and accounts over others. And due to skepticism in recent yearsaround the power of social media to be used to negatively influence and persuade users,social platforms are ramping up their efforts to remain relevant and profitable.

So, how can companies get seen and heard above a sea of what seems like endless content?If you missed the Z­Wave Europe Summit last month, Ashley Daigneault, VP of CasterCommunications, presented on social media algorithms and the importance of understandingthem in order to properly leverage social media.

Here are a few key takeaways.

Social in 2019: Users over Brands

Algorithms across social platforms are constantly evolving. In 2019, key trends include theincreasing prioritization of individual people over brands and corporate content. That meansthat users will more often see real people and companies have to work that much harder tohave their organic content viewed. This represents an overall shift to focusing on communityon social media and it means influencer marketing is still very relevant, representing a largepercentage of the most popular and commonly seen posts.

User generated content and community building is crucial, as is shifting away from justpromoted posts. Paid campaigns are no longer enough to keep brands afloat on social media,investing in building conversations and organic engagement must also go hand­in­hand withpaid posts.

Looking at the Big Four

Facebook: The GiantYou're on Facebook, your friends are on Facebook, your mom and her friends are onFacebook ­ the point is, Facebook is still a dominating force in social media (with Instagramon its tails ­ particularly with millennials and Gen Z). To stand out on Facebook, brands needto be building authentic conversations. Your posts will not be shown if you're constantlyasking for likes, shares or comments, or being overly promotional. It also prefers posts thatare regular and that are shared within the platform instead of outbound links.

On Facebook, creating engaging content that is tailored for your audience but doesn't comewith a call­to­action that demands engagement is key. Don't try to sell or lecture youraudience ­ educate and cultivate conversations that help them. And be sure to keep your postand profile up to date and consistent ­ Facebook, like other platforms, monitors inactiveaccounts frequently and will de­prioritize you if you're only posting once a month or less.

Twitter: The BuzzBecause of Twitter's lightning pace, timing and quantity is absolutely critical to ensuringvisibility. Twitter's algorithm will show ranked tweets first, then show older posts labeled, "Incase you missed it," and from there, show all remaining tweets in reverse­chronological order.The order in which your tweet goes out, and how quickly it sees engagement afterwards, willdetermine its success and reach.

Twitter will also send out tweets to a smaller group first to measure engagement and interest­ if a tweet gets liked or re­shared frequently within a short period of time, it will then beshared with a larger group and distributed across more feeds. Popularity with certain usersalso impacts how often you're shown in their feed ­ if you are always liking posts from acertain user, you will be shown their posts more frequently. For brands, it's important toengage frequently on Twitter. Be a member of the community and interact with others oftenby liking, commenting and retweeting, and pay attention to data around timing of posts. Ifyou've noticed that tweets are liked more often at a certain time, prioritize posting then.

LinkedIn: People to PeopleLinkedIn has grown from a smaller, niche platform servicing professionals to an essential toolfor business development and networking. Both users and companies can post content andusers can connect with other users and "follow' a brand's content via their company profile.But unlike other platforms, LinkedIn goes through a categorization and prioritization processwith content that involves humans and doesn't solely rely on AI to determine priority. Forexample, if a story or another type of post is doing well within a user's network, LI has a staffmember look at it and then open it up to a wider audience. Company pages still play a role,but individual employees and professional content is prioritized.

To stand out on LinkedIn, consider having execs or high­level managers share content onInPublishing about industry trends relevant to your business. LinkedIn wants content that canhelp someone's career, have industry relevance and come from a credible source. Ask youremployees to follow your company, update their profiles with it, comment on relevant contentand join and share in groups. With engaged employees, your brand's reach can go far onLinkedIn.

Instagram: See and HearInstagram is known as being the visual platform ­ content on Instagram needs to be eye­catching, meaningful, interesting and speak closely to a very targeted audience. Like Twitter,users are shown content that is similar to the type of content they regularly interact with andthe hashtag is king ­ the Explore page feature is a great way to stand out to people who maynot be following you yet.

Engagement is as critical to success on Instagram as posting pretty pictures and videos.Brands need to comment and engage with followers often, as well as in hashtags.Encouraging discussion and responding in comment threads may result in more viewsbecause Instagram ­ like Facebook ­ wants to see longer form commentary on posts. It's asign that people are staying on the platform longer to debate or discuss. Leverage data andtrends to see when users are engaging the most often and post then ­ timing is also criticalto pushing through Instagram's extensive algorithms.

There are two important takeaways here:

1. Digital marketing and PR professionals need to invest time in understanding thealgorithms and general prioritization rules and processes before they start posting for a

company or brand. Without a deep understanding, hours of creating content and postsfor both organic and paid campaigns will be wasted.

2. Prepare for these algorithms to change at a moment's notice, requiring your team torethink their social strategy moving forward. At least annually (sometimes more) themajor platforms will make updates that impact what content is seen and how often. So,while it might be frustrating, it must become part of your social team's responsibilitiesand to act accordingly on the changes.

ON THE ROAD: Z­WAVE SPRING SUMMIT

Z­Wave Spring Summit Wrap Up Ashley Daigneault, Z­Wave PR Lead | Caster Communications

Last month, the Alliance team went to Amsterdam to convene with European members,influencers and leaders in the smart home space to discuss the future of the market, preparefor upcoming trends and challenges and collaborate on how to cooperatively leverage Z­Waveto further group and individual goals.

Business + Marketing Track SummaryOn the Business & Marketing track, members with a role in business development and/ormarketing and PR began the event by participating in a workshop. Designed to get membersto work together, the "Power of Partnerships" workshop gave each group a target market andthey were tasked with coming up with an IoT solution for that space.

The workshop brought up some interesting discussions among the group, including questionsaround true drivers of adoption for customers, the similarities and differences when marketinga B2B solution vs. a B2C one and the need to use technologies like artificial intelligence tomove us from "connected" to truly intelligent. The use of AI came up in several presentations,and it was clear that Summit participants felt that it was an important topic and trend to payattention to and think about in product roadmaps and future solutions.

We also dug deeply into security and privacy issues; the group heard from Silicon Labs' ChiefSecurity Officer Sharon Hagi and why he believes that securing the IoT is a sharedresponsibility and how the success of IoT truly depends on getting security right. The Z­WaveAlliance as a group has spent a great deal of time thinking about IoT security, taking a

leadership role and changing certification to mandate the new Z­Wave S2 Security frameworkin all new certified devices. While we often hear about security from the perspective of hacksand breaches, having maximum security inside every offering can and should be a featurethat brands highlight to their customers. The more stories in the news about smart home andits vulnerabilities, the more wary consumers are going to be of bringing these technologiesinto their homes. If we're tackling the message right out of the gate and being proactive,consumers will see the Z­Wave ecosystem and member companies as trustworthy and safe.

With security also comes the issue of data and privacy; connected devices are collecting anenormous amount of data and the ones in our homes are able to learn things about ourbehaviors and routines and schedules. That level of knowledge can make people nervous,especially if that data isn't secured or is being used to intrusively sell them services orproducts. The rise of IoT technologies and digitalization has led to the creation of data­drivensolutions which for businesses, can open up new business models. But, at the same time,more and more laws are being implemented which regulate the collection, transfer and use ofdata. Most prominent are data privacy and security laws like the EU­GDPR. Summitparticipants heard from privacy expert Dr. Ljuba Kerschhofer­Wallner of Deloitte on the needto consider the risks of data law non­compliance when monetizing data with their solutionsand services.

Technical Track SummaryOn the technical side of the Z­Wave Spring Summit, developers and engineers dug intosessions around designing and developing on the new Z­Wave 700 platform from Silicon Labs.Z­Wave product manager Johan Pedersen reviewed the Z­Wave roadmap and future plans forZ­Wave chips, software and certification.

Attendees participated in two focus tracks, one dove into the 700 series and end devicedevelopment and engineering and the other focused on controller development andengineering. Both of those focus tracks had presentations and workshops, where theattendees got some hands­on experience with elements of those areas. The 700 Series trackfocused on getting familiar with the Silicon Labs development environment, details on enddevice development and design and engineers vs. marketing and regulatory requirements andchallenges that come with certification.

The controller track tackled the process of creating a new Z­Wave gateway (aka hub) andlooked at the Z­Wave over IP framework known as Z/IP along with Z­Ware gatewaymiddleware known as Z­Ware. Attendees also heard from manufacturers Athom and Quby ontheir work with Z/IP and Z­Ware and case studies related to their success.

Overall, the Z­Wave Spring Summit was an excellent two­day look at what's happening in theZ­Wave ecosystem now and in the future and what our members in the European region aredealing with in terms of opportunities and challenges. We are now preparing for the Z­WaveFall Summit in Austin, Texas on September 24 ­ September 26, 2019. Stay tuned for fulldetails on sessions, themes and speakers!

RESEARCH ROUNDUP

As the smart home and IoT continue to see explosive growth, analyst and research groupsare taking note, releasing what seems like an endless stream of reports and findings aroundtrends in the space.

In this issue of the Alliance newsletter we share a few recent and compelling reports andshare key takeaways from each.

Report Name: 21st Annual Consumer Technology Ownership and Market Potential StudyReport Released By: Consumer Technology Association (CTA)Key Takeaways: The CTA recently released a report looking at household ownership andintent to purchase across almost 60 consumer tech products, including smart home devicesand AI­enabled technology like smart speakers. One major finding was that now, one­third ofU.S. homes (31%) own a smart speaker ­ up from only 8% only three years ago. The reportalso found that smart appliances are on the rise: "Smart appliances are owned by 17% ofhouseholds, with smart light bulbs, thermostats, home security cameras and robotic vacuumsrounding out the most­owned smart home devices in 2019," the CTA said in a press release. Report Name: Race to Control the Smart Home Ecosystem: Attracting PartnersReport Released By: Parks AssociatesKey Takeaways: We talk a lot about interoperability in the Z­Wave community. This reportfrom Parks Associates wanted to learn more about purchasing intent around smart homeacross U.S. broadband households. A press release from Parks shared that findings includedthat "60% of U.S. broadband households planning to buy a smart home product heavily favorsolutions that work with devices they already own." The report also noted that the highintention to purchase smart home devices has grown steadily over the last four years,highlighting an increased interest in smart home from mainstream consumers. Report Name: Smart Home Deep Dive StudyReport Released By: CE ProKey Takeaways: DIY smart home is seeing a lot of growth ­ but the custom integratormarket is still an important and crucial part of the continued growth of smart home. Thisreport from CE Pro gives a deep dive into the custom integration and smart home market,with key takeaways including that "61% of integrators believe their smart home installationbusiness will grow this year," and that "the average smart home system being installedconsists of 25 separate interface devices, including keypads, light switches, mobile phones,voice modules and touchpanels."

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