A lot of businesses and marketers spend a lot of time developing strategies around the Internet of Things (IoT). But guess what?
Recent research from the Acquity Group shows most consumers are clueless about the IoT — and companies and brands may be putting the cart before the horse by trying to sell smart technologies to consumers.
In fact, the research shows ignorance about the IoT is the biggest barrier to adoption. A stunning 87 percent of the people surveyed don’t know what it is — and consequently can't see any value in it.
Refrigerators are Smarter than People?
Acquity, now a part of Accenture, surveyed 2,000 consumers in the US. Generally speaking, it shows that many people are embracing wearable technology, but are unaware that these technologies are part of a wider group of devices that can be described as the IoT.
They are also unaware they can buy intelligent appliances like refrigerators and other things, like smoke detectors. Even when they are aware that this technology exists, they were concerned about the price and the value they get for their money.
Then findings, which are contained in Acquity’s 2014 Internet of Things (IoT) Study (free after registration) examines consumer adoption of connected devices and smart technology. For the sake of the study, the IoT is defined as the phenomenon of everyday devices connecting to the Internet through tiny embedded sensors and computing power.
While there is a huge market for technology providers that offer these kinds of sensor-enabled consumer products, there is also a huge secondary industry in gathering and analyzing data gleaned from those devices.
The IoT is still in its infancy. However, the research contends that mainstream adoption is inevitable as it become less expensive to integrate sensors into physical objects, particularly around in-home smart devices and wearable devices.
We are already seeing computer and sensor-infused objects in a variety of industries, including automotive, energy, consumer electronics and in-home appliances, the report notes.
Right now, only about 4 percent of people own an IoT device and only slightly more — 7 percent — own some kind of wearable. But the figure is expected to double within a year. In the next two years, 30 percent of consumers will obtain an in-home IoT device and that could climb to 69 percent in the next five years.
Wearable fitness devices are expected to see the fastest rate of adoption in the next five years with 13 percent of consumers planning to buy a device in the next year and 43 percent in the next five years. The next most popular device will be smart watches, with 5 percent expected to invest in the next year, 8 percent by the end of 2015 and 25 percent in the next five years.
Smart clothing is less likely to catch on and adoption will be slower. In the next five years, a total of 14 percent of consumers expect to own smart clothing and 16 percent expect to own a wearable headset device.
Driving all these figures is the fact that 87 percent of those surveyed said they hadn’t even heard the term IoT — including those already using connected devices. It is this figure that has led Acquity to conclude that a lack of awareness and lack of understanding of the potential gains connected devices can bring will be the two biggest obstacles to adoption of the IoT, more so even than concerns about security.
Lack of awareness is not the only barrier to adoption for in-home IoT devices. Over the past couple of years, a series of highly publicized data breaches, have given rise to considerable security concerns. About 57 percent of consumers said they are less likely to buy wearable IoT technology because of these data breaches.
Even still, prospects for development are good, with 55 percent of consumers planning to adopt wearable IoT technology and 68 percent of consumers plan to adopt IoT technology at some point in the future.
Technology companies are advised to promote the advantages of the IoT to overcome these obstacles. Suggestions include:
- Location based coupons for frequently purchased items like food
- Recipes sent to mobile devices based on items that have been place in a refrigerator
- Locations of the least expensive places to buy products based on previous purchases
Availability of technology was also an issue, with 71 percent saying they would be willing to buy a smart refrigerator if it was offered in the same store a conventional model. From this, Acquity predicts that point-of-sale information from sales associates and promotions could be effective ways for retailers to increase sales of certain types of connected technology.
If price is an issue for many, it did not appear to be a major obstacle with smaller devices. Only 20 percent of consumers believed smart smoke detectors were too expensive, but 83 percent believed smart cars are too expensive. It also found that consumers will pay a premium for technology that will enhance safety: think devices like smoke and fire alarms. It also found that many consumers are less willing to pay for what it describes as novelty items like smart refrigerators.
Despite security and privacy concerns, consumers that have been incentivized with discounts, coupons or free offers are open to sharing personal information. Specifically, consumers are most willing to share wearable data for coupons and discounts based on their lifestyles (28 percent), information on better workouts to reach their goals (22 percent), information on the best foods to eat to reach their goals (22 percent) and coupons for fitness gear (19 percent).
Acquity also broke the findings down by gender and analyzed the research based on the way consumers self-identified their technology spending habits. This included innovators, early adopters, mass consumers, late adopters and consumers who planned to never use IoT technology.
The research shows that men are more than twice as likely to have heard of the IoT and also more likely to consider themselves early adopters as women do. They are also more likely to own an IoT in-home device. However, both men and women are similar where it comes to wearable technology (7 percent versus 6 percent).
When it came to sharing data, women are more likely than men to share data from smart cars, for example, in exchange for location-based coupons or discounts (54 percent vs. 47 percent). Men are more likely than women (33 percent versus 22 percent) to share data from their connected car if informed of potentially interesting locations along their route.
Title image shows the late actor Peter Falk in the TV show Columbo.