Internet of Things Home Purchases are Influenced by Word-of-Mouth

  • Posted on: 17 January 2015
  • By: chw staff

Internet of Things Consortium (IoTC) today announced new research that indicates that nearly 65% of American consumers are moderately or extremely interested in adopting a smart home solution, and 71% of those consumers make smart home purchases based on word-of-mouth referrals by friends and family or recommendations made in-store by employees.
Further, two-thirds of the respondents are concerned about privacy, highlighting the need for industry participants to mitigate privacy and security concerns to drive the industry forward.  IoTC members Greenwave Systems, August, GK Digital Media and NXP Semiconductors commissioned International Data Corporation (IDC) to survey 1,005 U.S. consumers, aged 18 and older, about their attitudes towards smart home product purchases.
While variables like gender and income play a role in a consumer’s willingness to purchase Internet of Things (IoT) products, those factors do not always influence their preference. The survey found that, regardless of age and gender, 54% of consumers say word-of-mouth is the number one source of information when purchasing point products and smart home solutions. Word-of-mouth influence has twice the impact of traditional information sources like TV and Internet ads. Additionally, retailers can have a significant influence over in-store buyers as 43% of those surveyed said that store employees are the second most used source.
With the growing number of consumer IoT purchases, it is clear consumers are actively seeking ways to enhance their digital lifestyle by employing smart devices to help them be more efficient and save money (44%). That said, 51% of consumers are concerned that the total cost of ownership will outweigh the benefits.
Other survey findings include:

  • Across age, gender and income, 66% of survey respondents expressed concern about privacy.
  • Over 60% said they consider security and energy efficiency the most attractive benefits of today’s smart home solutions.
  • With respect to future connected home solutions, 37% of respondents want to be able to enhance their home entertainment experience by easily transferring shows and content from one device to another. The same percentage desire the ability to control their home appliances via a voice assistant.
  • There is strong evidence that smartphones are the central device for controlling smart home technology: Nearly a quarter of American consumers would consider a smart home solution only if they could control it with their smartphone.
  • American consumers also indicated that they would be open to viewing advertisements on connected home devices. More than a third stated that they would be willing to accept commercial advertising if it helped subsidize the cost of connected home products or services.

“This survey highlights that IoT is moving towards mass adoption, but that industry leaders must make their connected home solutions intuitive, simple and cost-effective to put into play,” said Nate Williams, CMO of Greenwave Systems. “Consumers don’t really care how they manage their smart devices, but they want a frictionless experience — ideally with a solution that someone else installs for free — that saves them money and improves their quality of life over the long-term.”
“We need to deliver products to consumers that have clear value and delight them,” said Bharat Vasan, COO of August. “We can’t underscore enough the impact ease of use and experiential learning can have on the IoT industry, as smart home products are being made more widely available through retail distribution.”
Greg Kahn, Founder and CEO of GK Digital Media offered, “This ground breaking, collaborative research study shows that consumer interest in connected home products and services is reaching a tipping point.  We can anticipate mass adoption of smart home technology if providers can subsidize the total cost of ownership. Advertising may be one way to do so.”
“Data security and identity protection are clearly top-of-mind for consumers looking at IoT products and services,” said Jack Ogawa, Sr. Director of Marketing for NXP Semiconductors.  “The developing IoT industry has an opportunity to utilize state of the art software and semiconductor technology to set the standard for secure connections, both in the Cloud and in the connected IoT products themselves.”