The Internet of Things (IoT) may be in its infancy but it was poised for a “massive growth” by the next decade, according to a new study.
The study by digital agency Acquity Group, part of Accenture Interactive, found that as near as the end of 2015, 13 per cent of consumers would have bought an “in-home” IoT device such as a smart thermostat or security camera, clearly underlining the fact that consumer adoption of network connected technology is on the rise. Sixty nine per cent of consumers planned to buy an “in-home” device in the next five years.
Because of the rapid fall in cost of integrating technology with physical objects, the coming years will see more application and adoption of the IoT, having major implications for both business-to-business (B2B) and business-to-consumer (B2C) companies in the next five years.
The Acquity Group survey polled over 2,000 U.S. consumers on their behavior and preferences when it came to the IoT, and expected adoption of connected technology. Based on the data, the agency published a white paper that provides an in-depth look into consumer behavior across a variety of areas related to connected technology, including current and future adoption plans and potential barriers to mass consumer penetration. For B2B and B2C companies, the research provides a full picture into how consumers view IoT technology and the growth potential of this in both short and long term.
While consumer adoption of connected technology will be more gradual in the short term, widespread adoption will be inevitable over the next five years.
The study found among wearable technology devices, wearable fitness applications and technology would see the most growth in the short term, with 13 per cent of consumers planning to purchase within the next year and a total of 33 per cent looking to adopt in the next five years.
Smart watches followed with 8 per cent of consumers planning to adopt in the next year and 25 per cent planning adoption in the next five years.
Smart clothing and heads-up displays were the least likely to catch on, with only about 3 per cent of consumers expected to purchase either type of device in the next year. In the next five years, 14 per cent of consumers were expected to purchase smart clothing and 16 per cent were likely to purchase a headset wearable device.
But here’s the downside: Although the study showed that mass adoption of connected technology was likely in the long term, the majority of consumers (87 per cent) hadn’t heard of the term, “The Internet of Things,” prior to the study. In fact, the top barrier to mass adoption of this technology, according to Acquity Group’s research, was a lack of both awareness and value perception among consumers.
Sixty-four percent of consumers had not purchased an in-home IoT device because they were unaware that items like smart fridges and smoke detectors were available for purchase; 40 per cent of consumers did not know that wearable technology was available in the marketplace.
Also, a series of recent, highly public data breaches that plagued major retailers and companies had contributed to greater security concerns among consumers related to wearable IoT technology. Fifty-seven per cent of consumers said they were less likely to purchase wearable technology because of these hacks and data breaches.
But, despite the lack of interest in the short term, the long-term prospects for IoT growth were very strong, said the report.
Sixty-five percent of consumers planned to adopt connected technology at some point in the future.
One of the many conclusions of the study was that businesses could capitalise on revenue opportunities in the IoT space by demonstrating value of devices to consumers. Despite concerns with security and privacy, consumers incentivized with coupons or helpful information are more open to sharing data with third parties, such as retailers, manufacturers, or friends and family.
The largest opportunities for brands lay in presenting consumers with specific, measurable results from the data they are sharing. Companies using data to connect with consumers via IoT devices should ensure they’re offering value every time – whether that be through special offers targeted specifically to past behaviors, or information on how to improve the quality of daily life through specific means.
A key takeaway of the report was that the success in the future of IoT would stem from providing an exceptional, easyto-use customer experience with compelling benefits, no matter the industry or type of product. This could be achieved with a solid strategy, powerful technology, efficient change management and a cutting-edge digital presence.
Graphic Credit: Acquity Group
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