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Closing the IoT smart home consumer enthusiasm gap

In its 2016 report, “IoT Disruption and Opportunity,” NTT Data surmised that, “carriers tend to have a Field of Dreams ‘if we build it they will come’ attitude about smart home programs.”

Providers throughout the smart home ecosystem remain bullish that consumers will embrace IoT-connected devices and sensors. But the NTT Data survey of more than 1,000 U.S. homeowners suggests there is a ways to go in closing the IoT smart home enthusiasm gap between providers and consumers.

While half of survey respondents expect to purchase smart home devices in the future, consumer enthusiasm remains tempered by a range of concerns: 80% of U.S. consumers are concerned about security of information and 73% are concerned about privacy when it comes to sharing data from smart home devices. They also have reservations about the perceived cost and complexity of installing smart home devices, leading to a desire to see a more advisory relationship with their carrier.

Overcoming consumer hesitations — whether around privacy, security, costs or benefits — requires creating smarter home and IoT experiences for consumers. And one could argue the greatest potential to help consumers maximize their smart home investments begins with energy. For providers, there are a handful of strategies to help close the IoT smart home consumer enthusiasm gap.

Understand why consumers would share data

For smart home providers, delivering more meaningful data to consumers will generate the enthusiasm needed to purchase and use IoT devices. Data sharing is a two-way street however, and it is just as important for providers to be able to tap into valuable consumer data to enhance the value of IoT devices.

There is a psychological element to this process, as providers should invest the time and resources to better understand what motivates consumers to share data. In a Parks Associates survey asking broadband households their likelihood to share data from smart home products with manufacturers and service providers, consumers were most likely to share data to register the warranty and provide information on warranty coverage; improve and update the product; monitor the product and notify them if there are issues; and teach how to better use the product.

Consumers were less likely to share data if the outcomes were for purposes of recommending other products that work with the smart home device (which smells more like cross-promotional marketing) or to provide a simple way to purchase consumables. Manufacturers and service providers must understand what motivates consumers to share data, and then highlight those benefits when educating and marketing to consumers.

Make consumers energy smart

Generating more consumer enthusiasm must start with better education. Most homeowners lack basic awareness, let alone insights into how much energy is being used, even when electric devices are “idle.”

There is tremendous value in monitoring appliances and devices to assess their efficiency through real-time power usage and diagnostics. There is an average of 65 electrical devices per home (53 plugged-in and another 12 permanently connected to the home), so there is plenty of opportunity to assess energy efficiency.

One particular area that better consumer education can address is the home idle or vampire load, in effect devices wasting huge amounts of electricity when not in active use. Idle load electricity represents on average nearly 23% of household electricity consumption ($165 per household per year).

Another component to help consumers better understand energy usage is providing more digestible and actionable information. We are seeing interest from energy and smart home providers to offer homeowners energy insights that disaggregate usage down to the equipment level, along with customized tips for improving efficiency and boosting energy savings.

Measure and warn on appliance degradation

Enthusiasm to invest in IoT smart home devices grows when providers communicate benefits that not only can save energy, but provide peace of mind. Every device and appliance in the home, connected or non-connected, ties into one network, the home’s electrical panel, and each has its own electric signature or fingerprint. If there were a way to measure electricity centrally at the electrical panel, without requiring the expense and hassle of a professional installation by an electrician, then the availability of high-resolution energy data could be scaled and analyzed to diagnose the operational health of all appliances — even the legacy ones that are in every home. These types of DIY energy sensors are possible today, offering new potential to engage consumers and deliver meaningful value that can save literally hundreds of dollars associated with appliance repair.

Despite concerns around security, privacy and costs, enthusiasm for IoT and smart home devices is trending up and, according to research from the Consumer Technology Association unveiled at CES earlier this year, is poised to drive the U.S. consumer technology industry to $292 billion in retail revenues in 2017. Building on that consumer enthusiasm is achievable through these data-driven strategies.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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