Easing Consumer Doubts About the Internet of Things

According to several recent studies, consumers are still very much on the fence about the Internet of Things. Before they’ll give IoT a thumbs up, these studies say, companies will need to earn their trust and offer more steak and less sizzle in their IoT offerings.

While visiting my sister’s family in the Midwest over Christmas, I encountered two IoT moments I found revealing. The first showed IoT’s darker side. While we were walking, my millennial generation niece received a GPS-triggered message on her iPhone from an establishment nearby. The promo was apparently innocuous (I didn’t pry), but it was clear it startled her a bit, and not in a good way. Perhaps she didn’t know geo-targeting technology existed. Maybe she was put off because she didn’t remember giving anyone permission to send place-based ads. Or maybe it was just lame. Whatever it was, I got the distinct impression she found it intrusive.

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Lack of awareness feeds consumer reluctance

Given the results of recent consumer studies, my niece’s response to this IoT event was not at all unusual. Many people remain lukewarm about IoT. Partly that’s because awareness is still quite low. In an October 2014 study involving 2000 consumers in the U.S., conducted by global marketing firm Affinnova, 87% had never heard the term (neither had my sister nor my niece, until I mentioned it).

However, the study, along with several others, shows that the more consumers learn about the enormous potential for IoT to improve their lives, the more likely they’ll be to buy. But in order for them to fully embrace IoT, this and other studies say, they’ll need help allaying their fears about this new hyper-connected age.

The Internet of “Things” stokes fears

In a KPMG survey on IoT from September 2014, nearly 60% of UK consumers resent that computers appear to be running their lives. And 70% believe that as appliances and devices become more and more connected, things could easily get out of hand. Wil Rockall, a director in KPMG’s Cyber Security practice, says “It is clear that consumers are struggling with a desire to use connected devices as a route towards an easier life, but they remain wary of the rise of the machine.”

Consumer uneasiness extends to security and privacy as well. They were top concerns for more than half of those partaking in the Affinnova study. Specific worries included hacking and having their data shared by third parties without their knowledge. It’s understandable that consumers are anxious about sharing intimate data. No one wants details about what they stock in their smart fridges or track with their wristbands being broadcast to the world (obsessive Twitter and Facebook TMI posters excepted, of course).

It’s a problem not to be taken lightly, because data is the primary fuel for IoT. No data, no dollars. Companies eager to monetize IoT will need to earn the trust of their customers if they want them to offer up data. That means better ways will have to be found to ensure data security and privacy. High profile hacks in the past year don’t inspire much confidence with Joe Public.

Thanks for sharing, here’s your reward

Yet, despite their reservations, consumers are receptive to the idea of sharing data with retailers and manufacturers — so long as they get something in return, according to an August 2014 study from the Acquity Group. Participants’ interest in sharing data jumped from just 9% with no incentives to 40% when they were offered inducements such as store coupons, discounts or relevant information.

Wanted: no gimmicks, more value

These studies point to one other key roadblock to consumer adoption of IoT: perceived value. For example, in the Affinnova study, 41% of respondents said they felt that the products and services they’ve seen thus far from IoT are “just gimmicky.” When you consider the phenomenon of programmable LED holiday lights, they have point.

On the other hand, when shown IoT product concepts that provided clear value, respondents reacted very positively. Among their favorites were smart refrigerators that let you view their contents remotely (so you know what to pick up on the way home from work), lawn and garden sprinkler systems that automatically adjust to changing weather conditions and smart bathroom scales that connect to diet and exercise apps. You can see all the product winners and losers from the study here.

Turning doubters into believers

The bottom line from all of these studies is that with careful attention to consumer doubts and the right level of education and awareness, consumers will naturally gravitate toward IoT. They’ll be drawn most to IoT offerings that help them save money, lead happier, healthier lives, use personalized data in more meaningful ways and safeguard their private data. No real surprises here, but worth taking to heart if you wish to cash in on IoT.

And while the studies I’ve mentioned are focused on consumers, it’s a safe bet to say that many of the same conclusions apply to business customers.

Later on during my visit with my sister’s family, I had my second IoT moment. I believe it illustrates how people are gradually discovering the benefits of IoT. It was just days before Christmas. The parking garage at a popular mall was jam-packed. But parking was a breeze. That’s because above each of the hundreds of parking spaces, hanging just below the ceiling, were two small lights. A green one for open, red for taken; we could tell at a glance exactly which spaces were available. We went straight for the first green light we saw without missing a beat. Nice.

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About the Author

Sean Kirk
Sean Kirk has been writing about evolving business and technology trends for more than 25 years. His areas of specialty encompass big data, as-a-service offerings, cloud technology, networking, recurring revenue, data security and IP communications, among many others.

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