ONSUMERS STRUGGLE COMMON CONNECTED
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1 C TO USE ONSUMERS STRUGGLE COMMON CONNECTED THINGS DEVICE MAKERS AND SELLERS MISSING MILLIONS (MAYBE BILLIONS) OF OPPORTUNITIES TO ENGAGE AND DRIVE PRODUCT ADOPTION IoT Device Adoption and Technical Support BENCHMARK REPORT OCTOBER 2015
2 IOT IoT DEVICE ADOPTION AND TECHNICAL AND TECHNICAL SUPPORT BENCHMARK SUPPORT REPORT BENCHMARK REPORT Contents PAGE 3 PAGE 3 PAGE 5 PAGE 10 PAGE 11 PAGE 12 PAGE 14 PAGE 15 PAGE 16 Executive Summary 4 Top Takeaways Survey Discoveries Conclusions Critical IoT Success Factors Take Action Methodology About PlumChoice Appendix 2
3 Executive Summary THE INTERNET OF THINGS IoT hype is progressing to reality, and the future is being measured in the billions. Organizations like Business Insider predict that connected home device shipments beyond smartphone and tablet devices will grow at a compound annual rate of 67% from 2015 until That s 1.8 billion units of smart appliances, energy equipment, and safety and security systems expected to be shipped in These projections foretell a significant opportunity for device innovation and sales while intimating a major challenge for cross-device service and support. IoT Device Adoption and Technical Support Benchmark Report: 2015 This report explores the adoption and use of today s mainstream, Internet-connected devices (i.e., smartphones, laptops and fitness bands), along with consumers understanding of and intent to use emerging smart home technologies (i.e., smart cars, door locks and thermostats). The research also encompasses consumer perspectives on their needs and expectations for technical services and support. AN ISSUE OF TRUST OR AWARENESS? Only 42% of consumers surveyed ask for help with Internet-connected devices Of those who ask for help, 50% opt for a friend or family member over a manufacturer or retailer 14% have returned a product due to difficult use or installation Of those, 51% would not buy from that brand again 4 Top Takeaways INTERNET-CONNECTED DEVICES: HELP WANTED Consumers of all ages are struggling with their things and they re not asking for help. They don t know who to turn to for help and/or don t trust the likely candidates. When they do ask for help they re not getting the answers they need. CONSUMERS WARY OF SMART HOME DEVICES Consumers don t see the value in smart home devices (yet). Younger generations think smart home devices are too expensive. Buyers expect brands to help with much more than just installation and troubleshooting when they purchase a smart home device. FOCUS ON FEMALES TO STRENGTHEN BRAND As key decision makers in the home, women are more apt to ask for help and are less forgiving when they cannot use a product as desired. BRAND AFFINITY AT RISK Getting the desired full-service technical support impacts consumers willingness to shop with brand again. DETAILS ON NEXT PAGE 3
4 INTERNET-CONNECTED DEVICES: HELP WANTED Consumers are struggling with their things and they re not asking for help. Nearly two-thirds of respondents say they re unable to complete all the desired activities with their Internet-connected devices, and 46% of them do not ask for help. Age doesn t matter. Sixty percent of respondents aged 18 to 24 said they re unable to complete all of their desired activities with their connected devices; even millennials and those who are younger need help using devices. Consumers don t know who to turn to for help and/or don t trust the likely candidates. Fifty percent of respondents said they turn to a friend or family member for help, while only 17% ask the product s manufacturer for assistance; only 14% turn to the retailer who sold them the product. When they do ask for help, they re not getting the answers they need. Only 20% of respondents said their needs are always met when they ask for technical help. CONSUMERS WARY OF SMART HOME DEVICES Consumers don t see the value in smart home devices (yet). Nearly three-quarters of respondents said they have no plans to purchase a smart home device in the next two years. More surprisingly, 48% say they do not believe they need one. Younger generations think smart home devices are too expensive. As a result, brands will need to convey the value to this demographic in new and meaningful ways. Buyers expect much more than help with installation and troubleshooting when they purchase a smart home device. Nearly half of respondents said they would expect help with all of the following when they make a smart home purchase: purchase decision, installation, use, connection, maintenance, troubleshooting, personalization and optimization and home environment integration. FOCUS ON FEMALES TO STRENGTHEN BRAND Catering to a female audience could help brand perception and loyalty. Women are more apt to ask for help, though are less forgiving when they cannot use a product as desired. They re also often the ones making the household purchase decisions. (Source: "Buying Power," Catalyst 2013) BRAND AFFINITY AT RISK Getting the desired technical help impacts brand loyalty. More than three-quarters of respondents said a brand s ability or inability to provide the help they need affects their willingness to shop with that brand again. In fact, 14% said they ve returned a product in the past two years because they had difficulty installing and using it, and more than half of those individuals said they will not buy from that brand again. 4
5 Survey Discoveries CONSUMERS STRUGGLE WITH CONNECTED DEVICES While 61% of consumers surveyed have Internet routers in their homes and basic connected devices like smartphones, tablets and laptops have been around for more than a decade The majority of device users still struggle to fully adopt and use these things. One might expect some adoption challenges for older generations and Baby Boomers (ages 45 to 65), where the learning curve may be greater and less frustration from the younger, millennial generations (ages 18-34) who grew up with these technologies but the divide is not as significant as we might think. 67 % OF RESPONDENTS CANNOT COMPLETE ALL OF THEIR DESIRED ACTIVITIES with their INTERNET-CONNECTED DEVICES. OF THE YOUNGER GENERATION, AGED 18 TO % HAVE TROUBLE with their devices. INTERNET-CONNECTED DEVICES PER HOUSEHOLD # OF DEVICES > 14 5% 11% 20% 26% 36 % 35 % None 4% LEARN MORE IN THE APPENDIX 5
6 Survey Discoveries CONSUMERS LOST WHEN SEEKING TECHNICAL HELP % THAT HAVE REQUESTED HELP % 31% 42 % AGE RANGE % 39% 50% 60% Maybe consumers aren t asking for help with Internet-connected devices because they don t know who has the answers. 58 % 42 % have asked for technical help with Internet-connected devices. The most concerning piece of this is that most respondents have not asked for help with their connected devices. When they do, only a fraction turn to the product manufacturer or developer for that assistance. TOP RESOURCES 50% A friend or family member 22% I don t need help I do it myself When asked to share their top resources for help, respondents answered 18% I do not have a go-to resource for help 17% The product s manufacturer 14% The retailer who sold the product Regardless of who they turn to: ONLY 20 % devices. said their needs are always met when they seek help with their connected 6
7 Survey Discoveries ACCESSIBILITY TO TECH SUPPORT IMPACTS BRAND PERCEPTION AND LOYALTY More than three-quarters of consumers do not turn to retailers or manufacturers to get help with their Internet-connected devices. 14 % Have returned a connected device/gadget due to difficulty installing or using it. 75 % say a brand s ability to provide support affects their willingness to buy from that company again. OF THE 14% 51 % Will not buy from that brand again. AGE MATTERS Younger age groups are least likely to ask for help with their connected devices. They re also among the most forgiving when they cannot get their devices to work. % BY AGE RANGE THAT WOULD NOT BUY AGAIN FROM A BRAND WHOSE DEVICE THEY RETURNED % 50% 48% 57% 69% GENDER CONSIDERATIONS: THE FEMALE FOCUS Though consumer forgiveness of difficult-to-use brands and products varies only slightly by age group, a view of perception by gender tells a more interesting story. Women are not only driving these purchases, but are less forgiving when brands don t help them use the things they ve purchased. This is a significant lesson in product adoption and loyalty for brands in the IoT space. 61 % of female respondents who returned a product due to This is particularly intriguing, as women MAKE 85 % of all consumer purchases (MediaPost) difficulty installing or using it would not buy from that brand again. INFLUENCE 85 % of household brand purchases (Sheconomy) INFLUENCE 61 % of household electronic buying decisions (Sheconomy) 7
8 Survey Discoveries SMART HOME DEVICE MARKET REMAINS NASCENT: CONSUMERS QUESTION VALUE As Internet-connected devices continue to evolve into complex technological ecosystems centered around smart home solutions, technical support will become increasingly more important. In fact, not only do consumers expect to receive some level of technical support with the purchase of a smart home device, close to half of respondents expect comprehensive help across their buying and usage journeys. AS OF TODAY of respondents say 78 % they do not own a smart home device See Appendix for details WHY THE HESITATION? 48 % Do not believe they need one 29 % Say devices are too expensive 20 % Have concerns about privacy and security 12 % Don t know what to purchase 8 % Are concerned about not knowing how to use it 74 % have no plans to purchase a smart home device in the next two years PEOPLE in the Parks Associates 2015 Top Trends in IoT study indicated 37% of all broadband households report a strong likelihood of adopting one or more smart home devices in ONLY 26 % This accounts for more than are interested in purchasing a smart home device in the next two years 83M United States. PRIMARY CONCERN: EXPENSE Interestingly, younger generations in particular do not perceive the value of smart home devices. AGE RANGE INDICATE SMART DEVICES ARE TOO EXPENSIVE % 19% 22% 21% 16% 13% A majority of respondents said they would consider a smart home device primarily to reduce resource consumption or for convenience: Because gadgets are fun For greater control over my home and/or family To reduce costs For more security To simplify life For more convenience To reduce energy, water or other resource consumption 20% 22% 30% 33% 34% 43% 44% 8
9 Survey Discoveries SMART HOME DISCONNECT: SUPPORT EXPECTATIONS & MISGUIDED TRUST >90 % 60 % of all respondents expect to receive some form of technical support with the purchase of a smart home device. expect the following help when they make a smart home purchase: purchase decision, installation, use, connection, maintenance, troubleshooting, personalization and optimization and home environment integration. Respondents don t trust manufacturers or retailers to help with smart home devices nearly as much as they think these brands should help. Those who say telco and cable providers should deliver support for smart home devices also do not trust these companies to provide that assistance. Conversely, while more than 27% of respondents say they trust a friend or family member to help them, only 8% believe those individuals should be the ones to help. Another ~20% say they either don t know who to turn to for help or they ll just do it themselves. SHOULD PROVIDE HELP TRUSTED TO PROVIDE HELP 60% 56% 47% 34% 27% The product s manufacturer The retailer I purchased it from 8% A friend or family member SMART HOME DISCONNECT While the majority of consumers agree manufacturers should help and trust them to do so only 17% turn to manufactures for that help. 9
10 Conclusions Internet-connected device makers and sellers in the United States are missing tens of millions (maybe billions) of opportunities to engage with and support consumers in their use of smartphones, tablets, connected thermostats and many other consumer-related categories of connected and IoT devices this year. Two hundred and fifty million smartphone and tablet units are expected to ship in the U.S. this year; however, the IoT Device Adoption and Technical Support Benchmark Report: 2015 indicates that 67% of those device owners (potentially 167.5M consumers) will not be able to use their things the way they want to. And nearly 50% of those owners (potentially 83.7M consumers) will never even ask for help. (See unit shipment estimates from the Consumer Electronics Association) 10
11 Critical IoT Success Factors EXCEED EXPECTATIONS: DEPLOY A NEW SUPPORT PARADIGM IoT and consumer electronics manufacturers, retailers and solution providers have a massive opportunity to differentiate their brands and close a significant technical support gap. Consumers currently do not have trusted, go-to resources for Internet-connected device support and, even after years of ownership, continue to struggle to use the products the way they want. Brands can no longer view technical support and services now offered primarily for installation, broken/otherwise at-fault devices, and/or device replacement as costly musthaves that focus on a single product or brand. Rather, there s an early-mover market to be claimed by brands who earn consumers trust and demonstrate the support needed and expected throughout the purchase process and personal technology journey. It s a tech support wrapper of sorts. Those brands that step forward to provide this service wrapper will experience higher adoption, lower no fault found returns, larger basket size, and better customer retention with repeat purchases and greater lifetime value. KEEP UP WITH COMPLEXITY As brands look to the nascent smart home device market which introduces more and more complicated technologies they must consider technical services and support as part and parcel of product design. These new, complex devices and systems are colliding with existing, highly personalized, and already complex environments. Before they become part of the connected consumer s daily life, these solutions require technical assistance for purchase, installation and activation. Keep in mind, the device or solution needs to be interconnected and interoperable within the existing environment. And the consumer expectations don t stop there; there are requirements for usage, maintenance, personalization, optimization and advanced usage and even help with subsequent device purchases. APPLY EXPERTISE Home and small business technology environments and their support wrappers (think of it as an Internet of Services ), require substantial technical expertise delivered through a purpose-built support and services program. It s no small undertaking, but the brands that stand out by serving and supporting consumers throughout the full product lifecycle will effectively win the battle of the Internet of Things. Take a closer look at our key findings and what your brand can do to power up IoT and smart home technology sales, adoption, usage and brand affinity in: see the Take Action section of this report. 11
12 Take Action Customers aren t asking for help and brands are taking that as a sign that no help is needed. Consumers struggle with their things, yet they re not asking for help. Redefine your technical support paradigm. To drive adoption of current and future devices, brands must enable a proactive, comprehensive wrapper of services that help end users buy, install, use, connect, maintain, troubleshoot, personalize, optimize and integrate these devices. Conceptualize these services at the point of product incubation and effectively communicate, offer and sell them to users throughout the customer journey and product lifecycle. Age doesn t matter. Even millennials and younger need help using technology. Acknowledge and act on the fact that all generations are challenged. Offer omni-channel support and services (automated, online, text, live chat, phone, , on site). Provide do-it-yourself and do-it-for-me services to accommodate a broad range of technical know-how and comfort levels. Consumers don t know who to turn to for help and/or don t trust the likely candidates. Do not settle for low consumer expectations and bad support experiences. Consumers know there s a gap between who is embracing their technical support needs today and who should be helping them in the future. Establish trusted relationships with your customers by actively pursuing brand-agnostic support opportunities, including support for the purchase, adoption, use and integration of devices within the customers technology environments. This wrapper of ongoing services will create long-term brand affinity. When consumers do ask for help, they re not getting the answers they need. Empower agents with scalable solutions that will make products easier to buy, use, integrate and maintain. In a typical technical support program, brands train contact center agents for homogenous, high-volume, routinized inquiries that are specific to their product or brand. If a request is outside of that scope, or if the product is out of warranty, that customer is out of luck. Leverage savvy, tech-enabled experts who can flex to the needs of today s consumers and can support an array of IoT and smart home devices that have endless uses, permutations and product integrations. 12
13 Take Action Consumers don t see the value in smart home devices (yet). Erase consumer confusion in the smart home market. Seize the opportunity to educate consumers and demonstrate value. Even though 33% of respondents said they do not know what a smart home device is, 26% of those reported owning one when presented with specific product examples. They do not think of certain devices, like a WiFi thermostat or connected home security system, as smart devices. Furthermore, many respondents said they d be interested in smart home products to help reduce resource consumption or make their lives more convenient. Help consumers understand the value they receive from these products and avoid relying on the cool factor to do it for you. Quantifying cost or time savings will go a long way toward adding value, as will providing trustworthy purchasing assistance. Buyers expect much more than help with installation and troubleshooting when they purchase a smart home device. Simplify the smart home device experience for your customers. Consumers know they struggle with the products they own now. Though they are not accustomed to receiving a full-service wrapper of support, they still anticipate needing help from the point of purchase through product integration. This level and scope of customer support and technical care is a differentiator and must become common practice for brands that expect to drive adoption and maintain brand loyalty in a noisy market. Lack of desired technical help puts brand affinity at risk. Expand technical support capabilities not only for your own products, but also for off-brand devices. As technology environments expand, brands that hesitate to change the way they manage tech support stand to lose customers to more innovative and nimble thing makers or thing sellers who incorporate comprehensive, end-to-end technical support and solutions for their products. 13
14 Take Action Buyers are returning devices due to difficulty installing and using them. More than half of those who returned devices would not buy from that brand again. Reduce churn and no fault found returns by proactively engaging consumers with a full-service wrapper of technical assistance and support. By simply ignoring the problem, brands will find their innovations wasted with more of their products sitting in warehouses than in homes and offices. Women are more apt to ask for help and are less forgiving when they cannot use a product as desired. Improve sales and create stickiness with messages and offers that resonate with women. As the key technology buyers and decision makers in many households, women can significantly impact brand adoption and loyalty within a home. Provide the right service and support up front and you won t need to rely on forgiveness down the road. Methodology Nearly 1,500 consumers from the United States between the ages of 18 and 65 were surveyed by a thirdparty agency in May of Respondents qualified for the research if they purchased an electronics device within the past year. All data presented in this report is exclusive to PlumChoice, Inc. 14
15 BENCHMARK REPORT OCTOBER 2015 The Power of PlumChoice is the leader in providing a continuum of specialized technical services for today s highly personalized consumer and small business technology environments. For more than a decade, the company has partnered with brands both large and small, including Fortune 1000 manufacturers, retailers, software vendors, and telco and cable providers to deliver highly differentiated customer experiences to technology end users by way of technical support solutions for the Internet of Things and cloud enablement. Today s dynamic, complex, heterogeneous technology environments require brands to solve for customer technical challenges that are complicated and diverse. PlumChoice s solutions span the entire buyer and customer lifecycle from pre-purchase through installation, configuration, integration, problem resolution and ongoing usage. Solutions include Connected Life, Cloud, and Premium Technical enablement from sales, support and care services to crossbrand and mobile device integration. PlumChoice enables brands to reduce no fault found returns, increase adoption and penetration, drive revenue, control costs and generate greater customer lifetime value. To learn more, contact: sales@plumchoice.com CONNECT WITH PLUMCHOICE 2015 PlumChoice, Inc. All rights reserved. PlumChoice is a registered trademark of PlumChoice, Inc. in the United States and other countries. All other names and marks mentioned in this document are the property of their respective owners and are mentioned for identification purposes only. PC-CR-EX-1015
16 Appendix WHAT INTERNET-CONNECTED DEVICES DO PEOPLE OWN? 90 % TABLETS COMPUTERS 66 % ROUTERS 15% Handheld game devices 11% Fitness bands 6% Internet-connected cameras 61 % GAME CONSOLES 5% WiFi thermostats 6% Smart home security devices 38 % SMART TV 2% Smart watches 4% Health monitors 27 % STREAMING TV DEVICES 24 % 1% Internet-connected light switches 1% Internet-connected door locks AS OF TODAY 78 of respondents say they do % not own a smart home device Smart/WiFi thermostat Automated/smart home security system Smart lighting system/light bulb Smart audio/visual system Smart door locks Smart light bulb Smart smoke detector Smart power strip Smart refrigerator Smart car Smart sprinkler system Smart oven Automated/smart home office security system Smart water leak detector THE OTHER 22% OWN: 0% 1% 2% 3% 4% 5% 16
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