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IN DEGREE PROJECT INDUSTRIAL ENGINEERING AND MANAGEMENT,SECOND CYCLE, 30 CREDITS
, STOCKHOLM SWEDEN 2017
Smart Locks for Smart Customers?A Study of the Diffusion of Smart Locks in an Urban Area
SANNE BJARTMAR HYLTA
PETRA SÖDERBERG
KTH ROYAL INSTITUTE OF TECHNOLOGYSCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT
Smart Locks for Smart Customers? A Study of the Diffusion of Smart Locks in an Urban Area
by
Sanne Bjartmar Hylta Petra Söderberg
Master of Science Thesis INDEK 2017:88 KTH Industrial Engineering and Management
Industrial Management SE-100 44 STOCKHOLM
Smart Locks for Smart Customers? A Study of the Diffusion of Smart Locks in an Urban Area
av
Sanne Bjartmar Hylta Petra Söderberg
Examensarbete INDEK 2017:88 KTH Industriell teknik och management
Industriell ekonomi och organisation SE-100 44 STOCKHOLM
Master of Science Thesis INDEK 2017:88
Smart Locks for Smart Customers?
A Study of the Diffusion of Smart Locks in an Urban Area
Sanne Bjartmar Hylta
Petra Söderberg
Approved
2017-06-06 Examiner
Niklas Arvidsson Supervisor
Cali Nuur Commissioner
Glue Home Contact person
Luisa Orre
Abstract
This thesis investigates the smart lock market and diffusion of smart locks in the context of an urban area in Europe. More specifically, the empirical study was conducted in London, United Kingdom. Smart Lock technology has the potential to make life easier for professionals as well as to solve the emerging last mile delivery problem. The last mile delivery refers to final movement of goods from the hub to the customer. It is the final leg of the complete journey of the goods and consists of obstacle and complexity. The aim of the thesis was to examine the current market for smart locks and identify barriers and drivers for the future diffusion of smart lock in urban areas. This was done through a survey of convenience in London and interviews with stakeholder in the smart home and last-mile delivery sector. The results show that there are both large opportunities as well as barriers for the smart lock market and that it is of high importance for the smart lock producers to create different use-cases around the smart lock in order to create relative advantage. The diffusion of smart locks is a complex multi-dimensional process depending on the use case of the smart lock. Smart lock producers need to find creative solutions to find effective use cases and to communicate these to potential customers. They need to have a strong client support and a comprehensive insurance- and security plan as security concerns among customers is one of the biggest obstacle for its further diffusion. Key-words: Smart Locks, Internet of Things (IoT), Diffusion of Innovations
Examensarbete INDEK 2017:88
Smart Locks for Smart Customers?
A Study of the Diffusion of Smart Locks in an Urban Area
Sanne Bjartmar Hylta
Petra Söderberg
Godkänt
2017-06-06
Examinator
Niklas Arvidsson
Handledare
Cali Nuur Uppdragsgivare
Glue Home Kontaktperson
Luisa Orre
Sammanfattning
Denna uppsats undersöker marknaden för smarta lås och diffusionen av smarta lås i urbana områden i Europa. Mer specifikt så genomfördes den empiriska studien i London, Storbritannien. Smarta lås har potentialen att göra vardagslivet enklare likväl som att lösa det växande ”last mile delivery” problemet. Detta refererar till den sista biten av leverans till kunden, en komplex resa som ofta kantas av hinder. Syftet med denna uppsats var att undersöka den nuvarande marknaden för smarta lås samt att identifiera potentiella hinder och drivande krafter för framtid diffusion av smarta lås. Detta gjordes genom en enkätundersökning i London och intervjuer av folk med professionell expertis inom teknologi för smarta hem samt i leveransindustrin. Resultatet visar att det finns hinder likväl som stora möjligheter för smarta lås. Det är av stor vikt för smarta lås tillverkare att skapa fler funktioner kring låset mer än den primära lås-funktionen för att skapa relativa fördelar. Diffusionen av smarta lås är en komplex multidimensionell process som ser olika ut beroende på användningsområdena som det smarta låset möjliggör. Producenter behöver skapa kreativa lösningar för att hitta effektiva användningsområden och för att kommunicera och förklara till kunder. De behöver en stark kundsupport och en genomgående försäkring- och säkerhetsplan då säkerhet och rädsla för inbrott är det största hindret för diffusion av smarta lås.
Nyckelord: Smarta lås, Internet of Things (IoT), Diffusion of Innovations
Contents
List of Figures 3
Foreword 5
1 Introduction 5
1.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2 Smart Homes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3 Problem Formulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.5 Research Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.6 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.7 Contribution to Previous Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.8 Outline of the Thesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2 Literature Review 9
2.1 Rogers Di↵usion of Innovation Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1.1 Elements in the Di↵usion Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1.2 Attributes of Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.1.3 Adopter Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 The Chasm Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.3 Factors A↵ecting Di↵usion of Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.4 The Product Life Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.5 Internet Of Things . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.6 Summary of Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3 Method 20
3.1 Research Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2 Research Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2.1 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2.2 Interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.2.3 Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.2.4 Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.3 Validity and Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.4 Generalizability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.5 Summary of Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4 Empirical Findings 24
4.1 Mapping of the Smart Lock Market in London . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.1.1 The Smart Home Technology Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.1.2 The Smart Lock Market and Mapping of Available Smart Locks . . . . . . . . . . . . 24
4.1.3 Competitive Substitutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.2 Consumer Behaviour and Adoption in London . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.2.1 Survey of Convenience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.2.2 Industry Interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.3 Summary of Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5 Analysis 39
5.1 Rogers Di↵usion of Innovations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.2 The Chasm Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.3 Factors A↵ecting Di↵usion of Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.4 The Product Life Cycle of Smart Locks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.5 IoT Framework and External Factors A↵ecting the Smart Lock Market . . . . . . . . . . . . 47
6 Conclusion and Further Research 48
6.1 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.2 Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.3 Further Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7 References 52
8 Appendix 55
8.1 Survey Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.2 Interview Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
2
List of Figures
1 Illustration of the Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2 Main Elements of Di↵usion, (Rogers, 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3 Attributes of Innovation, (Rogers, 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4 Roger’s Di↵usion Of Innovation Bell (Rogers, 2003). . . . . . . . . . . . . . . . . . . . . . . . 12
5 Di↵usion of Colour Televisions in the UK (Tidd & Bessant, 2009). . . . . . . . . . . . . . . . 13
6 The Chasm Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7 The Whole Product Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8 Product Life Cycle (Utterback & Abernathy, 1975). . . . . . . . . . . . . . . . . . . . . . . . 17
9 Available Smart Locks and Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10 Smart Locks Market Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11 Characteristics of the Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12 Technological Attitudes of the Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13 Smart Lock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
14 Respondents Attitudes towards Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
15 Respondents Trust for In-Home Delivery and their Digital Key . . . . . . . . . . . . . . . . . 32
16 Results from how early the survey participants perceive themselves to try new products com-
bined with Roger’s Bell curve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
17 Areas of importance for future di↵usion of smart locks . . . . . . . . . . . . . . . . . . . . . . 49
18 Summary of Analysis of Frameworks (red implies problem areas, yellow is neutral, green is
good) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3
Foreword
This master thesis report was written by Sanne Bjartmar Hylta and Petra Soderberg at the Royal Institute
of Technology, Stockholm, Sweden, the department of Industrial Engineering and Management. The master
thesis project was conducted during the period of January 2017 and June 2017.
We would like to express our gratitude to our supervisor at KTH, Cali Nuur, professor in Industrial
Dynamics. During the master thesis project, Nuur has been able to supervise and coach us with excellent
advises during the entire project. We would also like to thank Richard Backteman whom have provided us
with feedback and valuable input during the project and seminars. The guidance has always aided us to
improve our thesis project, and we can undoubtedly say that our thesis benefited from their assistance.
Thank you Cali and Richard!
We would also like to express our gratitude to the industry professionals who agreed to be interviewed
despite their busy schedules. Without them, this thesis would not have been able to be written!
Thank you all for your valuable inputs and knowledge!
Finally we would like to thank our families and our dear partners Charles and Luca.
Thanks to our familes, Charles and Luca for your endless support!
Sanne Bjartmar Hylta & Petra Soderberg, Stockholm, Sweden, 2017-06-01
4
1 Introduction
This chapter introduces the background of the research, where the research problem, the purpose, the research
questions, limitations of the research and contribution to previous research is defined.
1.1 Background
Information and Communications Technology (ICT) has drastically changed how people work, communicate,
learn and live. The rise of so called Big data and the Internet of Things (IoT) fuels growth of ICTs, and
ICTs are shaping the business landscape with new innovations as well as old innovations which have made
comeback. Schumpeter argues that innovation in business is the major reason for increased investments and
business fluctuations (Sweezy, 1943). New innovations involves an enormous amount of uncertainty, human
creativity, and chance (Utterback & Abernathy, 1975). A lot of literature aims to understand di↵erent
innovations and the di↵usion process of new innovations.
Rogers (2003) defines di↵usion as a special type of communication concerned with the spread of messages
that are perceived as new ideas. It is the process by which an innovation is communicated through certain
channels over time among the members of a social system. Rogers is the founder of the technology adoption
lifecycle, a sociological model that describes the adoption of a new innovation according to the demographic
and psychological characteristics of defined adopter groups over time.
The rate of product innovation in an industry or product class is highest during its formative years.
This is a period called the fluid phase, during which a great deal of experimentation with product design
and operational characteristics take place among competitors. Within a rich mixture of experimentation
and competition, some center of gravity eventually forms in the shape of a dominant design. Once the
dominant design emerges, the basis of competition changes radically, and the ecology of competing firms
changes from one characterised by many firms and unique designs, to one of few firms with similar product
designs (Utterback, 1996).
To become the dominant design, a company need to cross the chasm. The chasm is the gap between
two adoption groups early adopters and early majority in Roger’s technology adoption life cycle. The early
majority is only interested in buying from the market leader. A company can hence only become the market
leader if they win over the innovators and the early adopters. Since the product o↵ering and marketing to
the di↵erent adoption groups di↵ers a lot, it is important for technological companies to understand who
they are currently targeting with their innovation. (Moore, 1991)
Many new innovations today are aiming to make homes smarter and the everyday life easier, now achiev-
able due to the advanced data analytics and the emergence of artificial intelligence (Angelakis et al, 2017). A
smart home is a relatively new concept, defined as a convenient home setup where appliances and devices can
be automatically controlled remotely from anywhere in the world using a smart phone or other networked
device (Investopedia, 2017). Smart home products is a wide concept with many di↵erent product groups.
One of them is the smart lock. This is an electromechanical lock which is designed to perform locking and
unlocking operations on a door when it receives such instruction from an authorized device, for example a
smart phone.
The smart lock is a current example of an innovation in the fluid phase. In the smart lock market
there are many di↵erent product designs with di↵erent operational characteristics as well as many active
competitors. The fluid phase for smart locks implies that the technology might soon cross the chasm and
that the dominant design thereby will be determined.
5
The smart lock is a possible part of the solution to the so called ”last mile delivery” problem for delivery
companies. The last mile in parcel delivery is often complex, as it requires the customer to be at home
if delivered to the door. Smart locks would enable the owner to grant temporary access to, for example,
deliverers which could eliminate the need to deliver the same parcel more than one time.
1.2 Smart Homes
The definition of a smart home, according to the UK Department of Trade and Industry, is ”a dwelling
incorporating a communications network that connects the key electrical appliances and services, and allows
them to be remotely controlled, monitored or accessed” (Baliga, 2015). The smart home technologies are
increasing in number which is causing compatibility issues. Many are now striving for more standardised
smart home technologies. What is perceived as a smart home also di↵ers. In the real estate industry this
has become a real problem since many believe a house will be sold faster if they claim it to be smart. This
has led to a more refined definition which require a home to have at least two features from a list of smart
options. With this definition, only one out of four houses are smart in the US, even thought 87 percent
acknowledge the value of a smart home. (Olick, 2016)
Some of the functionalities o↵ered by smart homes are related to economic and comfort-related aspects
such as light and heater systems automatically turning on/o↵ according to the inhabitant’s location/presence
within the home. Another large element witnessed from smart homes is the arise of independent living
for those su↵ering disabilities. The introduction of technology and technological support into the lives of
such patients o↵ers the potential for them to undertake daily activities which they previously would have
relied upon from external support (Augusto & Nugent, 2006). Today’s smart homes are mainly focused on
sustainability and security, with products such as automated lights, thermostat adjustment and remote video
surveillance. People spend more time away from the house nowadays and therefore the new smart systems
are providing a connectivity with your house, which many customers are appreciating. (Olick, 2016)
How the future of smart homes will turnout is not certain. Many believe it will be similar to what is
seen in the movies with digital and robotic agents taking care of all chores. MIT House n group, on the
other hand, suggests that research should focus on creating technology that requires human e↵ort. This, to
keep life mentally and physically stimulating as people age since losing a sense of control can be debilitating.
Instead of having everything done for you, sensors will provide you with ”Just-in-Time” information giving
you more control over the decision-making. (Intille, 2006)
1.3 Problem Formulation
The smart lock technology is currently in the fluid phase and there is no dominant design, neither has
population di↵used the innovation fully. IoT innovations are becoming increasingly important in today’s
business landscape and at the same time are people getting more concerned about personal integrity. The
lock has always been a symbol of security and safety, so what happens when it is turned into a smart product?
Will it be di↵used as previous smart technology or are there new obstacles that will slow this di↵usion down?
By using a smart lock, there are many benefits a customer can experiencing in terms of convenience and
increased visibility. Nevertheless, the benefits the society can experience are even bigger as this product
can eliminate the last mile delivery problem and the extra pollution this is accompanied by. Therefore, it
is not only important to ensure a fast di↵usion of the smart lock for the smart lock producers and delivery
companies, but also from an environmental point of view. Furthermore, from an academical point of view,
6
are the factors identified in existing theories of di↵usion enough or are there factors they are not covering?
1.4 Purpose
The purpose of this thesis is to analyse the current market for smart locks and to identify drivers and barriers
for the continued di↵usion of smart locks in urban areas.
1.5 Research Questions
To fulfill the purpose of the study, the research question that needs to be answered is the following:
• How can the di↵usion of smart locks in urban areas be accelerated?
To answer the research question thoroughly, it has been divided into three sub-queries:
• What are the main factors hindering the di↵usion of smart locks among customers in an urban area?
• Which factors does the existing theories of di↵usion classify as the main obstacles of the di↵usion of smart
locks?
• What substitutes to smart locks are o↵ered, and how can they influence the continued di↵usion?
1.6 Limitations
This study aims to understand di↵usion of smart locks in urban areas. This study is limited to the di↵usion
of smart locks in London. London has the largest e-commerce markets in Europe and the characteristics
among the population are well aligned with the adoption groups early adopters and early majority.
The city is perceived as a pioneer when it comes to new innovations. We will hence analyse the di↵usion
of smart locks in London to analyse the future di↵usion of smart locks in Europe as a whole. Other areas
such as Asia and the US have di↵erent conditions of smart lock di↵usion due to standardisation of locks,
and the study is hence primarily used to analyse the di↵usion of smart locks in Europe.
However, market research and literature review will also take other geographical areas and other products
into account to obtain a broader perspective of the smart lock market.
There are currently many smart products available on the market besides smart locks and smart home
technology. These products will not be discussed in this thesis due to the big di↵erence in application.
1.7 Contribution to Previous Research
The smart lock technology is a relatively new technology, which means that theory concerning this niche
mostly will be found in articles and blogs with limited scientific reliability. This study of the smart lock
di↵usion, with high scientific reliability, will hence contribute with the establishment of this technology and
concept.
1.8 Outline of the Thesis
This thesis consists of six chapters. After this introduction chapter, a literature review and method will
be presented with relevant theory and methods, designed to answer our research questions. Thereafter, the
empirical findings from both the literature review, survey and interviews will be presented. Finally, the
empirical findings will be analysed and conclusions will be drawn and a recommendation of further research
will be given.
7
Figure 1: Illustration of the Outline
8
2 Literature Review
This chapter presents existing theoretical frame works, which will be split between Roger’s di↵usion of inno-
vation theory, the chasm model, factors a↵ecting di↵usion of technology, the product life cycle and Internet
of Things (IoT). The thesis intends to analyse the di↵usion of smart locks and its barriers in urban cities by
combining existing findings and theories about di↵usion with a survey of convenience and industry interviews.
2.1 Rogers Di↵usion of Innovation Theory
The interest for the innovation and di↵usion process as an academic field of research has exploded since Rogers
presented his work ”Di↵usion of Innovations” in 1962, one of the most cited work in di↵usion research (Tidd,
2010). Di↵usion of innovation is a theory that seeks to explain how, why and at what rate a new technology
spreads. According to Rogers (2003), di↵usion is a social process in which actors of the social system create
and share information through communication channels over time. Rogers defines the innovation as an
idea, practice or object perceived as new by an individual or other unit of adoption. Di↵erent parts and
perspectives on the di↵usion process is addressed in Rogers work. Roger’s theory of elements in the di↵usion
process, attributes of innovation and adopter categories will presented here as well as further research that
addresses this theory.
2.1.1 Elements in the Di↵usion Process
Rogers (2003) argues that di↵usion is the process by which an innovation is communicated through certain
channels over time among the participants in a social system. The four main elements in the di↵usion are:
Innovation, Communication channels, Time, Social system. (Rogers, 2003)
Figure 2: Main Elements of Di↵usion, (Rogers, 2003)
Innovation
The innovation is a broad category that is relative to the current knowledge of the analysed unit. Any idea,
practice, or object that is perceived as new by an individual or group could be considered as an innovation.
9
Communication Channels
It is through the communication channels the Innovation spread across the individuals. This can take any
form, like word of mouth, any sort of literature, advertising, etc.
Time
The time refers to the length of time that is necessary for the innovations to be adopted. New innovations
are rarely adopted instantaneously.
Social System
The social system is the combination of external influences, such as mass media and governmental mandates,
and internal influences such as social relationships. There are many di↵erent roles in a social system, and
their combination represent the total influences on a potential adopter.
2.1.2 Attributes of Innovation
The rate of adoption is determined by the characteristics of the innovation, as perceived by the member of
the social system. There are five attributes of innovation: Relative advantage, Compatibility, Complexity,
Trialability, Observability. (Rogers, 2003). These identified characteristics can be grouped into three cate-
gories: characteristics of the innovation itself, characteristics of the individual organizational adopters and
characteristics of the market environment and communication networks (Tidd, 2010)
Figure 3: Attributes of Innovation, (Rogers, 2003)
Relative Advantage
This is the degree to which an innovation is perceived as better than the idea it supersedes. Relative advan-
tage refers to the extent to which the innovation is more productive, e�cient, costs less, or improves in some
other manner upon existing practices. This can be measured in economic terms but important factors are
also social prestige, convenience and satisfaction. The adopter is more likely to adopt a new innovation if it
finds a relative advantage of it. The greater perceived relative advantage of an innovation the higher rate of
adoption, i.e. the relative speed with which an innovation is adopted by members in the social system. Tidd
& Bessant (2009) highlights that it is useful to distinguish between the primary and secondary attributes
of an innovation. Primary attributes, such as size and cost, are invariant and inherent to a specific innova-
tion irrespective of the adopter. Secondary attributes, such as relative advantage, may vary from adopter
to adopter, being contingent upon the perceptions and context of the individual adopter. Increasing the
perceived relative advantage of the innovation, subsidizing trials or reducing the cost of incompatibilities are
10
incentives that may be used to promote the adoption of an innovation.
Compatibility
This is degree to which the innovation is perceived as being consistent with the existing values, past ex-
periences, and needs of potential adopters (Rogers, 2003). There are two distinct aspects of compatibility:
values and norms; and existing skills and practices (Tidd & Bessant, 2009). An innovation must be consid-
ered socially acceptable to be implemented and some innovations require much time and discussion before
they become so. An innovation that is incompatible with the existing values and norms of a social system
will not be adopted as fast as an innovation that is compatible. New values and norms must first be adopted
and accepted, which can be a relatively slow process. (Rogers, 2003). The extent to which the innovation
fits the existing skills, equipment, procedures and performance criteria of the potential adopter is important
and relatively easy to assess. Network externalities can a↵ect the adoption process. For example, the cost of
adoption and use, as distinct from the cost of purchase, may be influenced by: the availability of information
about the technology from other users, of trained skilled users, technical assistance and maintenance and of
complementary innovations, both technical and organizational. (Tidd & Bessant, 2009)
Complexity
This is the degree to which the innovation is perceived as di�cult to understand and use. Innovations which
are simple for potential users to understand will in general be adopted more rapidly than those which require
the adopter to develop new skills and knowledge. (Rogers, 2003)
Trialability
This is the degree to which the innovation may be experimented with on a limited basis. Innovations are in
general easier to adopt if they can be tried out in part, on a temporary basis, or easily dispensed with after
trial. A trialable innovation represents less uncertainty to potential adopters and allows learning by doing.
(Rogers, 2003). The exception is where the undesirable consequences of an innovation appear to outweigh
the desirable characteristics. In general, adopters wish to benefit from the functional e↵ects of an innovation,
but avoid any dysfunctional e↵ects. However, where it is di�cult or impossible to separate the desirable
from the undesirable consequences trialability may reduce the rate of adoption. (Tidd & Bessant, 2009)
Observability
This is the degree to which the result of the innovation are visible to others. The model of di↵usion assumes
that innovations spread as potential adopters come into contact with existing users of an innovation. The
chances of adoption are hence greater if other adopters easily can observe relative advantages of the new
technologies. (Rogers, 2003)
2.1.3 Adopter Categories
Rogers (2003) specify five di↵erent adopters categories, an classification of the members of a social system
on the basis of their innovativeness. Innovativeness is defined as the degree to which an individual adopts
a new idea, relatively to the other members of their social system. There are five di↵erent adopter groups:
Innovators, Early Adopters, Early Majority, Late Majority, Laggards. The figure below illustrates the rate
in which the di↵erent adopter category di↵use innovations.
11
Figure 4: Roger’s Di↵usion Of Innovation Bell (Rogers, 2003).
The rate of adoption is initially low, and adoption is confined by the innovators. Innovators are most open
to new ideas, willing to take risk and have close contact with scientific sources. Next to adopt are the early
adopters, then the late majority and finally the curve tails o↵ as only the laggards remain. Laggards are, on
the contrary to Innovators, the last to adopt to new innovations and often tend to be old with a low social
status. The curve is indicating each categorization in percentage of the total population. Each adopter
group have their own characteristics: (Rogers, 2003)
Innovators
Innovators are willing to take risks and tend to have a high social status and financial liquidity. They are
social and have a close contact to scientific sources as well as with other innovators. They have a high risk
tolerance, which helps them to adopt technologies that may fail. Their financial resources help them to
absorb the these failures.
Early Adopters
Early adopters have the highest degree of opinion leadership among the adopters categories. Similar to the
Innovators, they often have a high social status and financial liquidity. They have a higher education and
are more social than later adopters. They are more slow in adoption compared to the Innovators and use
judicious choice of adoption to help them maintain a central communication position.
Early Majority
Early majority adopt new innovation significantly slower than the Innovators and Early Adopters. They
often have above average social status and contact with early adopters.
Late Majority
Late majority adopt new innovations slower than the average adopter. They tend to have below average
social status, little financial liquidity and little opinion leadership. They are have a high degree of skepticism
towards new innovations and have contact mainly with others within the late majority and people from the
early majority.
12
Laggards
Laggards are the last group to adopt new innovations. They often have a low social status, low financial
liquidity, are old relative to the other adopters and are in contact only with family and close friends. They
have little or no opinion leadership.
The di↵usion of an innovation can also illustrated by the S-shaped curve shown in Figure 5. Many of
marketing studies have attempted to fit the adoption of specific products to the S-curve, ranging from
television sets to new drugs.
Figure 5: Di↵usion of Colour Televisions in the UK (Tidd & Bessant, 2009).
Rogers di↵usion of innovation bell- and S-curve was the earliest model and still the most commonly used.
It assumes a homogeneous population of potential adopters, and that innovations spread by information
transmitted by personal contact and geographical proximity of existing and potential adopters. The model
has been criticized because it assumes that all potential adopters are similar and have the same needs. (Tidd
& Bessant, 2009)
2.2 The Chasm Model
Many start-ups are currently facing problems to get their technology to the big market, the majorities. They
have managed to reach the innovators and early adopters, but then they reach ”the chasm”. The chasm is
13
explained as the gap between the early market (innovators and early adopters) and the mainstream market
(early and late majority). The mainstream market di↵ers a lot from the early market in the sense that they
are far more pragmatic and need fully functioning solutions to actual problems. The early market on the
other hand, finds it enough to just see the potential in a product and are willing to use it even if it is not
fully developed. The promise of a solution to their problems is enough. (Moore, 1991)
Because of the chasm, the step between the early market and the mainstream market is the most di�cult
to transition through. Both early and late majority need a fundamentally di↵erent marketing strategy and
product development than innovators and early adopters do. In Moore’s model, the innovators are referred
to as technology enthusiasts, early adopters as visionaries, early majority as pragmatists, late majority as
conservatives and laggards as skeptics. Moore (1991) argues that the marketing of a technological advanced
product should be focused on one of the groups of adopters at a time. (Moore, 1991)
Figure 6: The Chasm Model
The pragmatists want to have a reference base before choosing a product. Unfortunately, pragmatists
believes that visionaries references are worthless. They only want references from peers. On the contrary,
the visionaries are comfortable with having technology enthusiasts as references. Hence, when a company
is trying to make the transition from visionaries to pragmatists they do not have a reference base as they
did when they moved from technology enthusiasts to visionaries. At the same time, the products might not
be suitable for the mainstream market. The mainstream market wants generic and stable products, while
the early market is looking for customisation and innovation. Therefore, when crossing the chasm, both the
references and the products need to change. (Moore, 1991)
The Market Segment
Moore (1991) states that to be able to become the market leader, the early market needs to be fully satis-
fied and suggests niche marketing. The pragmatists only want to buy from market leaders which makes it
important to choose an early market segment big enough to become the market leader.
The Product O↵ering
A major problem for many start-ups is to deliver a ”whole product”. There needs to be a whole product
concept. When the early market has provided their feedback this needs to be incorporated into the product
o↵ering. Pragmatists will only buy whole products that solve their needs perfectly and is fully developed.
The product should give them a practical improvement to what they do, without any bugs or missing fea-
14
tures. The choice of buying the product should be easy. (Moore, 1991)
Figure 7: The Whole Product Model
The Competition
To cross the chasm, there need to be competition. Pragmatists require it. Competition enables the product
to continuously be developed and upgraded. Moore (1991) even suggests to create credible competition if
there is a lack of it. If there is no competition, the chasm is not ready to be crossed.
Distribution and Pricing
Moore (1991) categorises most distribution channels into two general categories: demand creators and de-
mand fulfillers. First, a new technology needs to be well established on the market. To establish the
technology, demand needs to be created. Hence, the first distribution channel should be direct sales, a
demand creator. Direct sales is optimised to creating demand since you have a sales forces explaining the
technology and its benefits directly to customers. When the product is accepted by the mainstream market,
other channels, the demand fulfillers, can be used. The most optimised demand fulfiller is retail sales. Price
will confirm the leadership position, therefore, a premium should be paid. The price should be set through
competitive pricing and not value-based pricing.
2.3 Factors A↵ecting Di↵usion of Technology
Rosenberg (1972) research concerning di↵usion of technology are more focused on the technology rather than
whom is adopting it. He argues that the rate at which a new technology replaces an old one is dependent on
how fast it is possible so overcome a number of supply side problems. He wants to identify factors that causes
the slowness of adoption and explains the variations in the rate of di↵usion between di↵erent technologies.
The factors are focused on certain supply side considerations and will not consider factors such as commodity
prices.
Continuity of Inventive Activity
When examining the history of di↵usion of technology, there is an overall slowness identified and what ap-
pears to be a wide variation in the rate of di↵usion between di↵erent inventions. The variation in the rate
of di↵usion can partly be explained by selection of dates. The invention of a new technology is a continuous
process which starts with the initial conceptualization, then the establishment of technical feasibility and
finally the commercial feasibility. Between these phases lies series of inventive activity. In reality, an inven-
tion is in the beginning often filled with flaws and is only a slight improvement from earlier technologies.
15
The later inventive activity is often what shapes the possibility for di↵usion by creating the technical and
commercial feasibility. Despite this, there has been a perception that technological change is a discontinuous
phenomena, mainly due to the convenience of having a set date for when a new technology was created.
How fast the di↵usion rate appears to be therefore depends on whether you set the date from when the first
conceptualization happened or when the products became feasible. Hence, this can makes the lag between
initial invention and adoption larger and increases the impression of slowness of di↵usion. (Rosenberg, 1972)
Improvements of Inventions after First Introduction
The actual pace of di↵usion is influenced by several categories of technological considerations. As mention
before, the inventions are often ine�cient or unpredictable when first introduced. There will be very few
advantages for using the new innovation, sometimes no advantages at all. Therefore, the di↵usion is bound to
be slow and the rate depends heavily on how fast the improvements of the invention are made. (Rosenberg,
1972)
Rosenberg (1972) points out that some new technologies are di�cult to anticipate the use of. There is a
tendency to take new innovations and conceptualizing them in terms of something familiar. Therefore, the
transition is often slowed down as it attempts to break away from the old forms and logic.
Technical Skills Among Users
There is not only the improvements of the innovation that matters for its di↵usion, it is also important that
the users skills gets developed. For an innovation to be e↵ectively used, the user needs to understand how
to use it. This learning period depends on factors such as complexity of innovation, the extent to which
they rely on skill already available and if the skills are transferable from other industries. Depending on how
fast the users can acquire the skills, there will take time for the innovation to become superior to previous
solutions. (Rosenberg, 1972)
Skills in Machine-Making
The next skill that needs to be developed is the skills and facilities in the machine-making. Successful
di↵usion of inventions requires a growth in the capacity to devise, adapt and produce at low cost. Many
inventions have been forced to sit on the shelves for a long time due to the lack of mechanical skills, facilities
and design and engineering capacity required to realize them. All inventions has a period were the capital
goods industries adapt themselves to the requirements of the new technology. Hence, the speed of which the
performance are improved, techniques adapted to meet the needs of users and the price is reduced heavily
a↵ect the di↵usion of the technology. (Rosenberg, 1972)
Complementaries
The complementarity in productive activity between di↵erent techniques a↵ects the di↵usion rate. For an
invention to reach its full potential, other inventions must create bypassing constraints to not hinder the
di↵usion of the intervention. There is rarely one single technology that constitutes the complete innovation.
(Rosenberg, 1972)
Improvements in Old Technologies
Rosenberg points out that one of the reasons that new technologies displace old ones slowly is that the old
technologies continue to improve. Innovations often appears to induce responses on the part of industries for
16
which they are providing close substitutes. A new innovation have many times in history served as a e↵ective
trigger to improvements in existing products. This form of competition generates economically beneficial
consequences, and plays a significant role in explaining the rate of di↵usion of some technologies. As the
competition of existing products increases, the new technology needs to improve in order to replace the old.
(Rosenberg, 1972)
2.4 The Product Life Cycle
Innovation in industry is a process that involves an enormous amount of uncertainty, human creativity,
and chance. Utterback & Abernathy (1975) created a model of the innovation cycle and argues that any
innovation has a finite life. An innovation will eventually get old and be replaced by an new innovation.
They authors divide the Product Life Cycle into three phases; Fluid Phase, Transitional Phase and the
Specific Phase.
Figure 8: Product Life Cycle (Utterback & Abernathy, 1975).
The fluid phase represents the formative years of the product. The rate of product innovation is highest
during the fluid phase. A great deal of experimentation with product design and operational characteristics
take place among competitors during this phase (Utterback & Abernathy, 1975). During the transitional
phase the producers learn more about the technology application and about customer needs for the specific
innovation. Within a rich mixture of experimentation and competition some center of gravity eventually
forms in the shape the dominant design. The dominant design product has features that competitors and
innovators mush adhere if they hope to command significant market share following. The emergence of a
dominant design is a result of the interplay between technical and market choices at a particular time.
Once the dominant design emerges, the basis of competition changes radically, and the ecology of com-
peting firms changes from one characterised by many firms and unique designs, to one of few firms with
similar product designs. This is the specific phase, and the competition now shifts from di↵erentiation to
product performance and cost (Utterback, 1996).
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2.5 Internet Of Things
The Internet of Things (IoT) is defined as the networks of connected machines and sensors with the ability
to monitor and manage object in the physical world electronically. IoT is rapidly gaining popularity, not
only in industrial and commercial environments, but also in personal life by means of smart devices at
home. The vision for IoT is to make our everyday lives easier and boost the e�ciency and productivity of
businesses and employees and that analysis through data collection will make us do smarter decisions. Data
collecting and tracking is essential for IoT, however this is also perceived as a privacy threat by some (Lee,
2017). Protection of data and privacy is on of the biggest challenges for customer adoption of emerging IoT
innovations (Badkas et al., 2015).
There are a number of obstacles that IoT needs to overcome in order to successfully be adopted by the
majority and deliver its full potential. These are both technical as well as structural and behavioral. These
are Technology, Interoperability, Privacy and confidentiality, Security, Intellectual Property, Organization
and talent, Public Policy (Lee, 2017).
Technology
The cost of basic hardware and computing power needs to continue to drop in order for a widespread adop-
tion of IoT. The price of radio-frequency identification tags, low-cost batteries and other commonly used
IoT hardware parts need to decrease. It is also important that the price of computing power and storage
continues to decrease for IoT to be able to use all available data and analyse it e↵ectively. (Lee, 2017)
Interoperability
Di↵erent IoT devices and system need to work together in order to realise the full value of IoT applications.
This can for example be accomplished by adopting an open standard or by implementing systems or plat-
forms that integrate IoT applications with each other. (Lee, 2017)
Privacy and Confidentiality
IoT often requires a lot of data. The type, amount and specificity of data gathered has created concerns
about privacy, confidentiality and integrity. Providers of IoT-products need to provide transparency in what
data they collect and how it is used as well as ensure that data are appropriately protected. (Lee, 2017).
Security
Organisations and IoT that gather data must be able to protect the data from unauthorized access and be
able to deal with new categories of risk that IoT introduce. (Lee, 2017)
Intellectual Property
There must be a common understanding of the ownership rights to data produced by connected devices. It
needs to be clarified who has what rights to the data from a sensor manufactured by one company and part
of a solution deployed in a setting owned by a third party. (Lee, 2017)
Organization and Talent
IT is embedded in the physical assets and the IT function and the operating organizations needs to be closely
aligned. Furthermore need capacity and mindset to use the IoT to guide data-driven decision making, as
well as the ability to adapt their organizations to new processes and business models. (Lee, 2017)
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Public Policy
Some IoT applications cannot proceed without regulatory approval. On example is self-driving cars. In
addition, regulators must establish rules about liability. Governments also play a big role in setting rules for
data practices regarding collection, sharing and use of IoT data. (Lee, 2017)
2.6 Summary of Literature Review
Di↵usion of innovations seeks to explain how, why and at what rate a new technology spreads. Rogers
(2003) argues that di↵usion is the process by which an innovation is communicated through certain channels
over time among the participants in a social system. These participants, called the adopters, are divided in
five categories; innovators, early adopters, early majority, late majority and laggards. The rate of adoption
is determined by the characteristics of the innovation as perceived by the social system. There are five
attributed of innovation: Relative advantage, Compatibility, Complexity, Trialability and Observability.
”The chasm” is the gap between early adopters and early majority and is considered the most di�cult
transition between two adopter groups. Both the marketing and the product o↵ering need to be altered to
fit the mainstream market. (Moore, 1991)
Rosenberg’s (1972) research concerning di↵usion of technology are focused on the technology rather than
whom is adopting it. He has identified six factors that causes slowness of adoption; continuity of inventive
activity, improvements of inventions after first intro, technical skills among users, skills in machine-making,
complementaries and improvements in old technologies. He explains how these supply side factors a↵ects
the various rate of di↵usion in di↵erent inventions and how the rate can sometimes be perceived as faster or
slower due to these factors.
Innovation in industry is a process that involves uncertainty, human creativity and change. Utterback
& Abernathy (1975) developed the Product Life Cycle, which aims to explain the di↵erent phases in the
innovation cycle. The initial period in which the product innovation is formed is called the ”fluid phase” and
involves experiments with product design and many active competitors. The dominant design eventually
appears and only a few players with similar product design are then left.
The Internet of Things (IoT) is defined as the networks of connected machine and sensors with the ability
to monitor and manage object in the physical world electronically. IoT is rapidly gaining popularity but
there are obstacles in the customer adoption such as protection of data and security, that the IoT needs to
overcome in order to reach its full potential.
In the next chapter, we will discuss the methods used to fulfill our purpose to analyse the market and
the drivers and barriers for the future di↵usion of smart locks in urban areas.
19
3 Method
This chapter presents our research approach and research process. The research approach describes the
inductive approach and why it is chosen. The research process describes the process of conducting the case
study, the literature review, the survey and the interviews. Lastly, an analysis of the validity, reliability and
generalizability is presented.
3.1 Research Approach
This thesis aims to analyse the current market of smart locks in urban areas and identify drivers and
barriers for the future di↵usion through an exploratory prestudy. London has been used as a case city. The
main reason for choosing London is that it is one of the biggest cities in Europe. Europe is the continent
dominating the global market for smart locks (Transparency Market Research, 2016). Furthermore, London
is the biggest e-commerce market in Europe and has a lot of high-income citizens working long hours (Centre
of Retail Research, 2016). Hence, the need for services at the home, such as cleaning, is potentially higher
and the additional use-cases around a smart lock could therefore be more desirable.
An inductive research approach has been used in this thesis. An inductive approach starts with specific
observations with aim to identify patterns and thereafter reach a general conclusion that is most likely true.
Our observations are in the form of a survey, interviews and literature research. Usually, the inductive
approach is used when having qualitative methods of data collection, as in this thesis. Even though an
inductive research approach cannot guarantee its conclusion, the approach is usually preferred in situations
with incomplete information. (Trochim & Donelly, 2008)
To minimise the risk of data source bias (Jick, 1979) and maximise the validity and reliability of the thesis
(Denzin, 1978), triangulation was chosen. Triangulation is defined as ”the combination of methodologies in
the study of the same phenomenon” (Denzin, 1978). Therefore, more than one method and source of data
collection has been used in this thesis. Hence, both a qualitative method and a quantitative method has
been used. For triangulation to be e↵ective, the di↵erent methods need to compensate each other so the
weakness of one is counter-balanced by the strength of another, otherwise, the triangulation is unnecessary
(Jick, 1979).
3.2 Research Process
The research process is consisting of the data collection and the data analysis. The data collection is conducted
through three main methods; literature review, interviews and a survey.
3.2.1 Literature Review
To reach a vaster understanding of the smart lock market and the problems associated with last mile delivery,
a thorough literature review was conducted. The main sources of the literature review was online databases,
such as KTH Primo and Google Scholar, books and published studies in the field. The focus of the literature
review was on customer adoption in general, research about smart homes and smart locks and dynamics of
industrial innovation. Since the concept of smart locks is relatively new, there was problems with finding
published studies on this subject. The main key words used when finding relevant literature were: Smart
locks, customer adoption, di↵usion of technology, Smart home technology, Internet of Things.
20
3.2.2 Interviews
The interviews were primarily semi-structured and conducted face-to-face. In some cases there was no
possibility to meet the interviewee in person, in these cases the interview was conducted via phone or mail.
When the interview was conducted via mail, it was structured. All interviews were between 30-60 minutes.
The semi-structured interviews were organised around a number of themes and question areas. The main
reason for primarily choosing semi-structured interviews is because they allow for questions to be created
during the course of the interview, which is positive as we aim to understand the whole concept around
smart locks and customer adoption. Therefore, we needed to understand our interviewees’ opinion about its
development and future. (Blomkvist & Hallin, 2015)
Five interviews was held with people with a great knowledge of the smart lock market and customer adop-
tion in general. In the interviews we were looking for multiplicity and complexity, rather than comparable
answers. This require us to be critical through the whole process. (Blomkvist & Hallin, 2015)
All the interviews were recorded in order to present the results correctly. The majority of the interviews
were conducted by two persons in order to minimize the risk of misinterpretation of the interviewees answers
(Eisenhardt, 1989).
3.2.3 Survey
The survey was originally conducted with 54 potential customers in London, where 43 of them responded
to the entire survey and 11 dropped out before completing it. The respondents were almost evenly divided
between males (56%) and females (44%). To ensure that the respondents were potential customers we
attempted to target young people working long hours with high disposable income. These people appears
to be most likely to buy smart home technology and to appreciate the services built around the smart locks
such as easier access for cleaners or deliverers. It was di�cult for us to get a randomized sample within
this target group since the majority of the people conducting the survey was people reached through our
contacts, social networks and people asked on the streets of London. Therefore, the sampling method chosen
was non-random sampling, also know as convenience sampling (Blomkvist & Hallin, 2015). The questions
focused on customers attitudes and experiences with smart locks and deliveries. In order to understand
what type or person was answering the survey, general questions about the person and their housing was
also included in the survey. This showed that the majority of the respondents were between the age of 19-34.
Many of the respondents have an annual household income of over £125,000 and 67% worked 46 hours per
week or more. The survey also contained attitude questions to determine which type of adopter is answering.
Since we was using convenience sampling, we have to take into consideration that the results from the survey
might not represent the entire population. The survey was sent out before the interviews started, mainly
because of time limitations. We wanted to ensure the respondents could answer the survey in time for us
to analyse the results. If the survey had been conducted after the interviews, the survey could have been
adjusted to the answers received in the interview. Since we did not have time for this, we reached out to
industry professionals before the survey was sent out to get feedback on the questions.
3.2.4 Data Analysis
After the data collection was completed and presented in the chapter Empirical Findings, the results were
analysed using the di↵erent theories and models presented in the previous chapter. All qualitative and
quantitative results were combined to reach a high validity and reliability (Denzin, 1978).
21
The results were organised and the key factors of each model were analysed. In Rogers (1962) model
of di↵usion, we first classified which type of adopter is currently buying the smart locks. Thereafter, we
analysed the attributes (relative advantage, compatibility, complexity, trialability and observability). The
Chasm model (Moore, 1991) were used to understand if the smart lock market is ready to cross the chasm yet
and was analysed through its market segment, product o↵ering, competition, distribution and pricing. To
further understand the di↵usion process and rate of adoption of smart locks, the market was analysed using
Rosenbergs (1972) factors. To understand which phase the smart lock market is currently in, the product
life cycle (Utterback & Abernathy, 1975) was used. This model help us categorise the phases in fluid phase,
transitional phase and specific phase. Finally, the empirical findings were analysed using the IoT framework
and external factors that might influence the smart lock markets were discussed.
3.3 Validity and Reliability
To assess the scientific quality of the thesis we have analysed the method in terms of validity and reliability.
Validity is about relevance and whether the thesis answers the intended question. Reliability measures if the
study is done in a correct way, if it is possible to repeat the study and get the same result. (Blomkvist &
Hallin 2015)
To increase the validity, triangulation has been used. The semi-structured interviews have entailed a
focus on the research questions, making the answers relevant for the thesis. The written sources have been
chosen with great consideration of context to ensure their relevance for answering the research question.
A high reliability will be ensured through source criticism. When conducting the semi-structured inter-
views, the possibility of a bias interviewee have been considered and taken into account when analysing the
answers. Only sources considered as credible will be used. As mention before, there is a lack of academic
papers on smart locks. To find credible, written sources, we have focused on that the author is knowledgeable
or has experience within this field.
3.4 Generalizability
In this thesis we have chosen to use London as a representation of all big cities. We cannot for certain know
that the findings here will be applicable for all other big cities. Hence, the statistical generalizability will be
low (Blomkvist & Hallin, 2015). The analytical generalizability will, on the other hand, be high due to the
great detail in describing how we conducted the study (Blomkvist & Hallin, 2015).
The statistical generalizability for the quantitative survey is also low due to the non-random sampling.
3.5 Summary of Method
In order to analyse the current market of smart locks in urban areas and identify drivers and barriers, London
was used as a case city. Mainly because its size, both in population but also their e-commerce market. We
have used an inductive research approach building on observations from a survey, interviews and literature
review. To minimise the risk of data source bias and maximise validity and reliability, triangulation was
chosen.
The literature review focused on the smart lock market, customer adoption in general and the last mile
delivery problem. The main sources on information was online databases such as KTH Primo and Google
Scholar, books and published studies.
22
The interviews were mainly semi-structured and face-to-face or via phone. One was conducted through
mail and therefore structured. The reason for using semi-structured interview was because we wanted to
understand the whole concept of smart locks and the interviewees’ opinions about its future. All interviews
were between 30-60 minutes.
The survey had 54 respondents, mostly found through contacts, social networks and on the streets of
London. Only responses from Londoners were used in the results. The sampling method we used was
convenience sampling since it was di�cult for us to reach a randomized sampling through the channels we
used. The people we targeted was young people with high disposable income that works long hours. The
questions were focused on customer attitudes, smart locks and deliveries.
After all results were collected, an analysis was conducted using the theories and frameworks presented
in previous chapter. The empirical findings was analysed with the key factors of all theories.
To increase the validity and reliability, several sources of information has been used and possible biases
of the interviewees have been considered in the analysis. The statistical generalizability will be low since we
cannot ensure that London can represent all urban cities and the survey sampling method was non-random.
The analytical generalizability will be high due to great detail in describing how the study was conducted.
In the next chapter the empirical findings from the literature review, survey and interviews be presented.
23
4 Empirical Findings
This section will present the results from our empirical studies. This is divided into three parts: a study of
the smart lock market in the chosen empirical context, London, a presentation of the results from a survey
of convenience conducted in London as well as the results from interviews with professionals in the smart
home and last-mile delivery market.
4.1 Mapping of the Smart Lock Market in London
4.1.1 The Smart Home Technology Market
The current state of consumer adoption for smart home technology is between early adopters and early
majority (Branca, 2016). Thus, at the chasm (Moore, 1991). Innovators and early adopters makes up about
the first 15% of the market and it is hence important to cross the chasm and start to capture the largest
part of the early majority. However, 80% do not see the extra value of buying smart products, which makes
the chasm hard to cross. (Branca, 2016)
The two groups identified as the more likely to buy smart home products are called ”Nesters” and
”Impressers” and make up 25% of the total market for smart homes. A survey conducted by over 7000
consumer shows that both Nesters and Impressers are more willing to pay for quality, purchase tech before
others, pay for convenience and invest in home improvement than the average consumer. The majority, over
69%, of the consumers in these groups are over 35 years old. The two most crucial factors to drive consumer
adoption is (1) strong value propositions and (2) design and user experience. With strong value proposition
means connected and integrated solutions, end-to-end support and service integrations. Collaborations
between companies that can provide smart home products and service and companies that support value-
added applications in the smart home needs to exist in order to provide a strong value proposition. (Branca,
2016)
A forecast by Joseph Branca at Strategy Analytics (2016) shows a significant growth in total consumer
spending on smart home products and services the upcoming year. Total growth spending is expected to
grow from $73 billions in 2016 to $128 billions in 2020 globally and from $12 billions in 2016 to $20 billions
in Western Europe (Branca, 2016).
Many of the smart home technology companies are still experimenting with di↵erent strategies. It is hard
to determine which companies that will succeed, but there are indications on factors that are increasing the
probability of success. Companies that are doing well in the smart home market often invest heavily in sales
and customer support. They also often o↵er a professional installation and have an e↵ective marketing plan.
This is important, as many potential customers still do not fully understand a smart home technology’s
potential. Many companies also have an end-to-end control and control almost every part of the o↵ering.
There are also factors that companies that are doing less well in the smart home technology market have
in common. This is lack in investment, a revenue model built around one-time purchases and that many
companies lack the personnel and capabilities to launch consumer products (Branca, 2016).
4.1.2 The Smart Lock Market and Mapping of Available Smart Locks
There are several companies o↵ering smart locks. Most of these are relatively new start ups but also the
established British lock maker Yale has introduced their smart lock in the United Kingdom (Yale, 2016).
The design and function of the smart lock di↵ers between di↵erent producers and smart lock models.
24
All identified smart lock producers use Bluetooth to open the door via the Smart phone and some also have
internet (WiFi) solution. The user needs to be close to the lock in order to open via Bluetooth while the user
can be anywhere in the world when opening via internet. All producers have another key connected to the
lock, mostly physical key fobs. The majority of the identified lock models have additional functions available.
This includes being able to grant temporary access and being able to see who and when someone access the
door through an activity log. Today’s smart home technology products are mainly focused on sustainability
and security (Olick, 2016). Smart locks are primarily used to increase security and awareness. Being able
to give out temporary electronic keys to service personnel or friends who need to access the house when the
owner is away is an additionally convenience factor with the smart locks. The smart locks produced by Yale
are the only models that not o↵ers access sharing and activity log (Yale, 2016). Figure 9 shows a summary
of the features of the di↵erent smart lock available to buy and use in the United Kingdom.
Figure 9: Available Smart Locks and Features
25
August Smart Lock and Glue Home are two companies that has created more use-cases for the smart
lock, meaning more functions, by creating partnership with other companies. August Smart Lock have a
partnership with Airbnb (August, 2015). Airbnb is an online marketplace and hospitality service, enabling
people to list or rent short-term lodging including vacation rentals, apartment rentals, homestays, hostel
beds, or hotel rooms. The company is merely a broker and does not own and lodging. (Airbnb, 2017). This
partnership means that the tenants automatically receives an notification that they will have access to the
rental during a specific time period. When the reservation ends, access to the property is automatically
revoked. (August, 2015). Both August and Glue Home have created partnership with food and delivery
companies in their initial home-market, the US and Sweden. Glue has a partnership with the delivery
companies Postnord and Bring, which means that the property owner can allow these to delivery the parcels
into their home while being away. ICA is a Swedish food grocery company and the partnership allows them
to deliver the food directly to the fridge while the owner is away. (Orre, 2017a)
The functions that August Smart Lock and Glue Home has created around their smart locks adds another
dimension to the market for smart locks. Furthermore, it builds up a revenue model that is not only built
around one-time purchases. The smart lock producers can take a charge when other companies are using
their access and build a sustainable revenue model.
The research conducted by Grand View Research, Inc. (2016) shows an anticipated market size for smart
locks globally at $24.20 billion by 2024, compared to estimated market size of $404.1 million in 2015. The
increase of cloud-based lock management solutions and home access will contribute to the expected growth.
The main challenges the smart lock manufacturers are facing are the high RD costs and the increase in
in electromechanical door locks instead of the customary mechanical locks. Even thought the design and
function di↵ers a bit between the locks many are similar to each others. Therefore, manufacturers are
focusing on creating easy-to-install locks to di↵erentiate themselves.
A similar analysis has been conducted by Transparency Market Research (2016) on the global smart locks
market. They have identified the main driver to be an increasing demand for secure locks. The governments
have also been an important factor in the rapidly expanding smart lock market. Many o↵ers support in the
aim to broaden the scope of the smart city infrastructure. The main treats for the smart locks manufacturers
identified here are the treat of cyber-terrorism. It will be important for the manufacturers to have top-tier
security solutions to minimise the risk for hacking. Europe is currently dominating the global market for
smart locks.
4.1.3 Competitive Substitutes
There are other competitive solutions to the smart lock market, as the smart lock have many di↵erent use
cases. This means that the smart lock can provide di↵erent functions, the most primary being to lock and
unlock the door electronically. As seen in the mapping of available smart locks some products also o↵ers
other use cases, such as in-home delivery through partnership with di↵erent companies. The collaboration
between smart lock producers and di↵erent delivery companies can be a solution to the growing “last mile
delivery” in London. Other solutions to this problem are hence competition for the smart lock market.
The last mile delivery refers to final movement of goods from the hub to the customer. It is the final
leg of the complete journey of the goods and consists of obstacle and complexity. The last mile involves
around 30% of the total logistic cost. The exponential growth of e-commerce in London and today’s more
empowered consumers has increased the expectations for speed and the experience of deliveries. The retail
and e-commerce has adapted to this, but the last-mile still poses many challenges. (Cohen, 2016). London
26
is the biggest e-commerce market in Europe. B2C sales accounted for 15.2% of total B2C sales in the United
Kingdom 2015 compared to 7.4% of total B2C sales worldwide. (Centre of Retail Research, 2016)
There are several companies, start-ups as well as established companies, with di↵erent solutions in how
to provide a convenient delivery to customers. Amazon and InPost UK have lockers located in London
where products are delivered and fetched using a personal code emailed to the receiver (InPost UK, 2017),
(Amazon, 2017). Click and Collect is also a growing trend among retail and grocery companies. The customer
purchases over Internet and choose to pick it up at the store or an assigned pick up station located in for
example grocery stores. Doddle Parcel has several pick-up stations in London where customers can pick
up parcels from connected companies (Doddle, 2017). Several companies have an in-house Click Collect
function where customers can order products on the website and collected in store. Doddle are selling
infrastructure systems for companies to create their in Click Collect functions. Argos, one of the largest
high street retailers online, is one example of a company which has a successful in-house Click Collect. The
company trades both through physical stores and online. They o↵er Click and Collect, same day delivery
and delivery in the weekends. (Argos, 2017). Click Collect and other delivery solutions are in in-direct
competition to the smart lock market as they provide the customers with some of the utility as the smart
locks. Figure 10 provides a summary of the market competition for the smart lock market.
Solutions to the last mile delivery problem are also beneficial from an environmental perspective. If
the parcel is delivered directly at the first try of delivery it prevents several journeys with car or other
transportation. The current situation where the parcel is being brought to the receiver and then back to the
delivery station if no one is home to receive and open the door often require several tries and travels between
the delivery point to the receiver.
Figure 10: Smart Locks Market Competition
27
4.2 Consumer Behaviour and Adoption in London
4.2.1 Survey of Convenience
The answers from the survey of convenience are presented below, divided between the categories Charac-
teristics of the Respondents, The Respondents Homes, Technological Attitudes of the Respondents, Smart
Locks, Shopping Habits and Trust.
Characteristics of the Respondents
As mentioned in the Method chapter, the respondents are almost evenly divided between males (56%) and
females (44%). The majority (87%) of the respondents are between the age of 19-34 with 30% between 19-24
and 57% between 25-34. A large part of these respondents (41%) have an annual household income of over
£125,000. 67% of the respondents are working 46 hours per week or more, with 30% working more than 60
hours per week.
Figure 11: Characteristics of the Respondents
The Respondents Homes
The most common type of housing is an apartment with either a locked key or a key fob at the entrance
(50%) and the second most common is a house with their own entrance door (26%). The most common
types of locks are ”Key cylinder on outside” (26%), ”High security night latch rim lock” (26%) and ”Euro
cylinder with separate handle” (24%). A lot of the respondents have several di↵erent types of locks.
Technological Attitudes of the Respondents
The majority (73%) of the respondents do not currently own any smart home products. Of the respondents
that have smart home products, the smart thermostat is the most popular with 16% claiming that they own
one. No one currently owns a smart lock. When asked about how early you generally try a new technology,
the majority identify themselves as being ”In the middle” (45%). Thereafter, the answers were fairly evenly
divided between ”Among the first” (20%) and ”Among the last” (30%).
28
Figure 12: Technological Attitudes of the Respondents
Smart Locks
The main value of a smart lock is to not need to keep track of a physical key (55% acknowledge this as value
adding). Other value adders are knowing who comes and goes from you home (50%), more controlled access
for service personnel (48%) and easier access for friends/family (48%). Despite this, 64% expressed that they
would hesitate to buy a smart lock. The main reasons for the hesitation go get a smart lock was concerns
about safety (50%), not wanting to spend money on it (44%) and that the technology was not advanced
enough (13%).
29
Figure 13: Smart Lock
Shopping Habits
The majority of the respondents prefers to use the standard delivery (64%) while 23% say that they prefer to
use the premium delivery. Only one respondent expressed Click and Collect as a preferred delivery option.
Even though premium delivery is not the preferred option usually, 77% claims that they would prefer it if the
delivery is urgent. When asked how interested the respondent would be in in-home delivery, 30% answered
somewhat interested while 23% answered very interested. The main concerns about in-home delivery was
safety (71%).
30
Figure 14: Respondents Attitudes towards Delivery
Trust
Currently, the people most respondents have given access to their homes to are cleaners (49%), family
members (27%), friends (14%) and maintenance personnel (14%). Furthermore, 26% says nobody outside
their household have access to their home, but only 12% says they would not trust anybody with a digital
key if they had a smart lock. To increase the trust, features such as insurance (63% of respondents claim this
would increase trust), ability to communicate (54%) and assigned personnel (47%) would help. In general,
the majority of the respondents (60%) consider themselves moderately conscious about their home security.
31
Figure 15: Respondents Trust for In-Home Delivery and their Digital Key
4.2.2 Industry Interviews
InPost UK
InPost have fully automated parcel lockers that enables customers to collect, send and return parcels via
these lockers. InPost currently has around 1200 lokcer locations around UK. At every location, there is about
50 lockers. The locations are usually around grocery stores, gyms and near local tra�c stops (Caminsky,
2017). The aim is to simplify the last mile delivery by making the parcels accessible day and night, without
the customer needing to queue or wait at home for the delivery (InPost UK’s website, 2017).
In the UK, the progress of the lockers are going well. More retailers and carriers are connecting themselves
to the service and over 90% of the people who try a locker for the first time likes it. Despite this, one of the
main di�culties InPost are having is to break the tradition of home delivery. The e-commerce is growing
rapidly which has resulted in a more complicated delivery process. The consumers wants option when it
comes to deliveries. Currently, a lot of retailers are o↵ering di↵erent types of home deliveries and Click and
Collect options where you can pick up the product at the store. In many ways, these are not optimal for
either the consumer nor the retailer. When asked, consumers often answers that they prefer to get their
parcels delivered at home, but people are not home during the days. The Click and Collect option therefore
got popular but the stores are not built for picking up parcels. Hence, this got expensive and caused long
queues for the consumers who just came to pick up their parcels. In order to change the tradition of delivery
there need to be more education about other types of delivery. (Caminsky, 2017)
32
One other very important factor for success is to make customers feel safe and comfortable with using
the lockers. InPost is working on the security aspect by having cameras around the lockers and educate the
customers about the lockers and their safety. The security benefit InPost have compared to some of the other
new delivery options is that their boxes are assigned to only one delivery. There is, for example, possible to
get the parcels delivered straight to the trunk of your car or to your own smart box outside your door. The
problem with these alternatives is if there is already something in the trunk or box. How can they make sure
this does not get stolen? And who is responsible? This problematic is also applicable for delivery through a
smart lock. Do people feel comfortable with giving out access to their homes with all their thing and family
members? (Caminsky, 2017)
For a new solution to work, it has to be beneficial for all stakeholders. In InPost case, the retailers
are able to give their consumers more delivery option. The carriers are able to get a guaranteed first time
delivery since they do not need to rely on someone to receive the package in person. Since the locations
have around 50 lockers each, the carriers also have the possibility to deliver several packages at once, saving
them time and money. For the consumer, they have easy access, both day and night, to their parcels. The
location of the lockers are also considered careful to match the places people usually go to. (Caminsky, 2017)
On the customer adoption curve (Rogers, 1962), InPost is currently characterising its customers as inno-
vators or early adopters but is starting to approach the early majority of the market. Their customers are
often younger people who are used to technology. They are happy to just interact with a machine instead of
a service person. In order to reach the majority, InPost is working on getting the integration of their service
as simple as possible for retailers and carriers. The products must be simple and standardised in order to
succeed. Regardless of speaking about lockers, smart boxes or smart locks, the solution always needs to be
standardised in order to reach the majority. This will make it cheaper for the customers and with only one
type of product, less training in how to use it is required. (Caminsky, 2017)
Strategy Analytics
Awareness for home technology has increased over the past years. Companies such as Google and Amazon
has created awareness through their product, and people are today more aware of di↵erent products and the
opportunities around smart home technology. Personal, property and data security is one factor that can
deter people from using smart home technology products. Another obstacle in the market is that there is
no convenient way to integrate and tie all di↵erent smart home technology products together. Smart home
products requires a significant investment of both time and money today. Apple HomeKit and Amazon Echo
do have some adoption, but integration is not complete and they face usability problems such as specific
remote access components. (Branca, 2017)
To drive costumer adoption of smart home technology further, there must be an easy way for users
to quckly make their smart home products together. The professional installation components and a good
customer support is also of high importance. This help the installation process and awareness of the products
functions and opportunities. The 3 strongest trends in the smart home market are currently: (Branca, 2017)
1. Voice interface, for example Amazon Echo and Google HomeKit.
2. Artificial intelligence, and finding a balance between full autonomy and user control.
3. Interface between entertainment and smart home products. For example to integrate the view of
entertainment content with security cameras at home.
33
Customer adoption of smart home technology is in general moving out of the early adaptor phase and
crossing the chasm, trying to catch the early majority. The smart lock market in the US are currently a bit
further along the curve. The adoption in Europe has not come that far. One explanation can be that there
are several configurations of doors and lock in Europe which create a standardisation issue. (Branca, 2017)
Doodle Parcels
Doddle Parcels is a parcel store network that allows customers to send and receive parcels in their dedicated
stores at railway stations, commuter hubs and retail stores around the United Kingdom. Doddle launched
in October 2014 as a joint venture between Network Rail and Travelex founder Lloyd Dorfman. Doddle has
partnerships with over 25 retail partners including Amazon, ASOS, Missguided, River Island and New Look
to extend the range of Click and Collect delivery options available to customers. (Doddle’s website, 2017).
There are today 70 Doddle stores across the United Kingdom. Doddle has their largest client base in London
and 10% of the volume of the pick-up networks in the United Kingdom, with fashion as the common parcel.
The Doddle stores has two main functions: Collection and Returns. The customer can collect parcels from
connected retail partners as well as return them. (Finger, 2017)
E-commerce is growing massively in the United Kingdom and as a consequence also the number of e-
commerce deliveries. The number of people at home to receive the parcels are simultaneously declining, and
it is also getting more di�cult to get parcels delivered to work due to limitations issued by the company
and stricter rules on delivery vehicle in the city centre. This creates an attractive market for new delivery
solutions. (Finger, 2017)
One of the most important factors for Doddles success is that it is a convenient solution for the customer
that does not require any extra e↵ort or safety concern. The customer does not want to travel extra to
receive and collect the packages. Scale and having stations at strategic locations is hence very important
for Doddle. Most of their Doddle stores are located in stations, shopping centres and in other stores, to
make the pick up an integrated part of customers every-day life. People are more and more willing to pay
a premium for convenience today than just a few years ago. The cheapest delivery option have historically
always been the most popular, but this trend is changing now. (Finger, 2017)
Doddle have a sensitive business, where one negative experience among customers can lead them to never
use the companies service again. The customers has been identified as early adopters and the profile is female
(mostly explained by the large amount of fashion retail and partnership with female only fashion brands),
young professionals (21-34) with busy schedule and a strong purchasing power. The biggest challenge that
Doddle face in terms of customer adoption is to convince customers and retailers to change their behaviour
and try their solution. Many of their customer return once they have tried Doddle pick-up, and the usage is
intensifying the longer a customer has used Doddle. (Finger, 2017)
Doddle di↵erentiate themselves from other delivery companies by being agnostic (the customer can pick
up parcels from a number of retail companies at the station), agile and by having a close relationship to
their B2B customers. A lot of retailers, especially fashion retailers, are struggling with increased costs of
delivery and shrinking margins. It is in many cases cheaper for a retailer to deliver via Doddle instead of
standard home delivery. Standard home delivery often lead to many delivery attempt as the customer might
not be in, and if the customer does not like the item he or she can send it back without any extra cost.
This is mostly common in fashion retail, which makes the last-mile delivery problem increasingly important.
Delivery to a certain station also consolidates the delivery for the retailer, as they can deliver many packages
to one address instead of deliver to every individual address. (Finger, 2017)
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August Home
August Home designs smart home products for the door. These products include smart lock, doorbell cam
and a smart keypad. They have also created a system around the smart lock through partnerships with
companies providing services such as cleaning, dog walking, laundry and more. They are based in San
Francisco.(August Home’s website, 2017)
The factors believed to have the most e↵ect for the success of August Home are the design of the device,
easiness to install and use and the “use case”. The design focus on simplicity and polish to be perceived as
approachable. The installation does not require any previous knowledge of how doors work, just 15 minutes
and a screwdriver. The products work seamlessly together and are easy to use. The “use case” refers to
peoples need to grant access to their homes when they are not there and how they do not want to be
locked out of the home or losing their keys. August Home launched their product in the Apple Store which
made the product more visible for the early adopter of smart home technology. This early visibility was
helpful.(Weldon, 2017)
The biggest obstacle associated with customer adoption has been the price. While early adopters happily
spend $200 on a smart home product, it is a high cost of entry for many. This will hopefully improve over
time with lower cost and improved technology and use cases. The concerns many customers are having is
the fear of being hacked. The security of the home is important and the customers need to feel completely
safe installing the product.(Weldon, 2017)
The smart lock adoption is still in its early adopter phase, even though the numbers are growing as
people learn more about them. The availability of the product has increased, August is now available on
mainstream outlets and big hardware store chains. There are some smart home products that are considered
to be in the early majority phase, for example Amazon Echo, Nest Thermostat and Philips Hue light bulbs.
These products are probably helping the adoption of the rest of the smart home products, including smart
locks.(Weldon, 2017)
The typical customer of August Home is a mid-30s male with kids and some disposable income who is
buying their first smart home product, or maybe second. This customer typically follows technology but do
not necessarily have to work in tech. Recently, there has been an increase of diversity of the customer base
as they reach new markets and customers.(Weldon, 2017)
One of the challenges August Home are having when considering expanding to other parts of the world,
is the di↵erent types of mechanical locks used. The most common lock in US is not the same as in Europe.
The company needs to decide if they should make custom products for each type of lock, use adapters, or
make a full-lock-replacement product instead of installing it on an existing deadbolt.(Weldon, 2017)
In the future, it is expected to be an increased demand for smart home products to work together seam-
lessly. One group of customers prefers to have professionals to come and install a complete smart home
system. There will probably also be an increase of use cases for smart locks. Currently, most customers are
using them for personal convenience or letting occasional guests in. Package theft is a big problem so in the
future there might be more people that want to use smart locks to let delivery and service people in so they
can drop things of and do housework. They also see opportunities in real estate and DIY rental space as
Airbnb.(Weldon, 2017)
Glue Home
Glue Home is a Swedish company that has created a platform and an ecosystem that enables smart, controlled
35
in-home access for people, products and services. Their smart lock is attached to the lock of a home and
enables the owner to control their door via their app as well as to give access to family members and
temporary access to guests, delivery companies and in-home services. (Orre, 2017a)
The main advantages Glue has compared to many other smart locks are both associated with the hardware
and the service system connected with the lock. On the hardware side, the lock is compatible with the biggest
lock types globally. The design of the lock is not as big and clumsy as many other. The lock has a retrofit,
meaning the smart lock can be installed without changing the existing lock mechanism. This is especially
appreciated when people are renting the housing since many landlords do not allow the tenants to change
the locks. The service system connected with the lock facilitates the everyday life and Glue is currently the
only hardware player that o↵ers this. (Orre, 2017b)
When choosing which partners to connect with the lock system, Glue mainly looks for big companies
with high brand recognition that o↵ers services or products that the smart lock customers want. It is also
important that these companies are able to see the value of this partnership, both on the cost side and
the revenue side. By partnering with Glue, you can get a more e�cient logistic flow by planing the routes
better and avoid rush hours. In Sweden, a package is delivered 1.9 times on average. This cost extra in both
personnel cost and gas, but is also unnecessary from an environmental point of view. Hence, to ensure a
first time delivery is therefore valuable. On the revenue side, you can increase the sales by increasing the
service. The most common reason for not finishing an online buy is that the customer is not satisfied with
the delivery alternatives. (Orre, 2017b)
The most common concerns customers have is connected to insurance and safety. Firstly, it is important
that the smart lock is approved by the insurance company and fits Stoldskyddsforeningen’s (SSF’s) norms.
Currently, IF, Lansforsakringar and Dina Forsakringar has approved the Glue smart lock. Glue also o↵ers an
in-home insurance which covers the in-home delivery of products. Secondly, the customer wants to know if
the lock is possible to hack. To minimise the risk of it getting hacked, Glue is using state-of-the-art security
with the highest level of encryption on all communication between the lock and the smart phone and the
WiFi hub. They are working hard on showing that they take safety, and the questions about it, seriously.
(Orre, 2017b)
One other reason not all people are getting a smart lock is because of the price. You have to buy it and
therefore it has to be something you want to spend your disposable income on. Glue has recently lowered
the price and are hoping that in the future it will be possible to sell it for prime production cost with the
help of the partners. (Orre, 2017b)
Currently, the main customer is a tech interested male between 30-40 years old. He is mainly interested
in the smart lock and not the services connected to it. Glue anticipates that in a year, the main customer
will be more focused on the services around the smart lock and be a person who does a lot of online shopping.
It will probably still be within the same age range, but more evenly divided between males and females.
On the customer adoption curve, the customers are now early adopters approaching the early majority. A
year ago, the customers were innovators. This can be seen in the questions the customer service gets. Last
year they were more focused on tech with questions about the encryption standard and similar. Now, the
questions are less technical. In London, the smart lock market is less advanced than in Stockholm but the
smart lock producers are starting to enter that market as well. To succeed in London, it is just as in Sweden
important with insurance and security. Probably even more important in London since Londoners generally
have a lower trust for people and institutions than Sweden. (Orre, 2017b)
Recently, there has been an increase in the number of di↵erent smart home products. This has created
36
an interest for smart home products in general. Therefore, a lot of products that are smart, but maybe
in an unnecessary way, has reached the market. Products such as smart tea or juice maker might create a
backlash where people just feel ”Why does everything need to be connected all the time?”. ”There exists
things that are smart and adds value, then there exists thing that are only smart because they are connected
to the internet.” quote Orre (2017b). There is a lot of positive talk about the smart smart things, but at
the same time a lot of negative talk about the not so smart smart things. This might a↵ect the whole smart
home industry negatively. Despite this, the electronic locks will increase from having around 5% of the total
global lock market today to 20% in the near future according to Assa Abloy. ”Just like all cars have software,
the locks will as well”. (Orre, 2017b)
4.3 Summary of Results
Smart home is currently between early adopters and early majority. The two groups that are most likely to
buy smart home products are according to Strategy Analytics ”Nesters” and ”Impressers”. The most crucial
factors for customer adoption are strong value proposition and design and user experience. Forecasts show a
growth in smart home technology spending. The companies that are doing well often invest heavily in sales
and customer support, as well as o↵er professional installation and have an e↵ective marketing plan.
Many companies are now o↵ering smart locks. Some of these locks are August Smart Lock, Danalock V2,
Glue Home Smart Lock, Lockitron Bolt and Yale Connected Smart Lock. All smart locks uses Bluetooth
while some also have WiFi as an alternative for controlling the lock with a smart phone. The majority of
the locks have additional functions available such as temporary access and activity logs. The smart locks
are mainly made to increase security, awareness and convenience. Some of the smart locks companies are
also o↵ering a system around the smart lock with partnership with other companies such as Airbnb, delivery
companies and grocery companies. The global market size is anticipated to be at $24.20 billion by 2024.
The collaboration between smart lock producers and delivery companies can be a solution to the last mile
delivery problem. Therefore, there exists several competitive substitutes to the smart locks in the form of
products or technology that aims to solve the last mile delivery problem. Some of these are delivery lockers
opened by a personal code provided by Amazon and InPost UK. Doddle Parcel o↵ers pick up stations where
customers collect their parcels. Many companies have in-house Click and Collect functions where customer
orders products from the website and then pick it up in the store.
The survey of convenience had 54 responses from potential customers in London. The survey shows that
the majority of the respondents do not own smart home products and no one currently owns a smart lock.
The main values with a smart lock are to not need to keep track of a physical key, knowing who comes and
goes and more controlled access for service personnel. Still, the majority would hesitate to buy a smart lock
mainly because of safety concerns. To increase the trust, features such as insurance, ability to communicate
with service personnel and assigned personnel would help. Only 12% claims that they would not give access
to anyone outside the household if they had a smart lock.
The main di�culties InPost UK are having concerning customer adoption is to break the tradition of
home delivery. In the interview it is also emphasized how important it is to make the customer feel safe
and comfortable, whether it has to do with lockers of smart locks. A new solution or technology needs to
work and be beneficial for all stakeholder. InPost’s customers are currently innovators or early adopters
but is starting to approach the early majority of the market. To reach the majority, InPost is working on
getting the integration of their service easier. In general, it is important standardised the product to reach
the masses.
37
The awareness of smart home technology has increased the last couple of years. The two factors that
mainly deters people from using smart home technology is security concerns and lack of a convenient way to
integrate all di↵erent smart home products. To further drive the customer adoption, professional installation
and good customer support is important. The three strongest trends are: voice interface, artificial intelligence
and interface between entertainment and smart home products. Smart home technology is currently about
to cross the chasm. US is a bit further along then Europe, main because of more standardisation.
The most important factor for Doodle Parcels success is that the solution does not require any extra
e↵ort or safety concern. Scale and strategically smart location of stores are therefore very important for
the convenience. Doodle is also seeing a change in trend from that the cheapest delivery is most popular
to a increased willingness to pay for premium delivery. The customers are identified as early adopters. The
biggest challenge is to convince customers and retailers to change their behaviour and try a new delivery
solution.
August Home believes the main reasons for their success is the design, easiness to install and use and
the use case. The biggest obstacle concerning customer adoption has been the price, it is a high cost of
entry for the customers. There is also a fear of getting the locked hacked. The adoption of smart locks is
still in its early adopter phase. Some smart home technology has reached the early majority phase and are
probably facilitating the smart lock adoption as well. One of the di�culties August Home has experience
when considering expanding is that there are di↵erent types of mechanical locks in di↵erent countries.
Furthermore, there is an increasing demand for seamlessly working smart home products and to be able to
have professionals installing a complete smart home system.
Glue Home main advantages compared to other smart locks are both their compatibility and the service
system they o↵er around the lock. For their service system they look for partners with high brand recognition
that are able to see the value of the partnership. The main concerns they see from customers are regarding
insurance, safety and the price. Their main customer are currently a tech interested male between 30-40
years old, but they believe this will change and become a person with more interest in the service system.
In the next chapter we will analyse the empirical findings with the use of the theory presented in the
previous chapter.
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5 Analysis
This section analyses the findings from previous chapter in order to answer the stated objective for the thesis.
5.1 Rogers Di↵usion of Innovations
Smart Lock Adopter Stage
According to Branca (2017), customer adoption of smart home technology is in general moving out of the
early adopter phase and crossing the chasm, trying to catch the early majority. He believes that the smart
lock market in the US currently are a bit further along the curve than this, but that the adoption in Europe
has not come that far. One explanation to this, which also Weldon raises as an obstacle when expanding
in Europe, is that the locks in Europe not are as standardised as in the US. Both Weldon (2017) and Orre
(2017b) identifies the smart lock adoption currently to be in its early adopter phase approaching the early
majority as more and more people learn about the products.
Orre (2017b) discusses how the questions that customer service has received during the past years. One
year ago, Glue Home identified their customers to be innovators. They then received a lot of questions
regarding the security, encryption standard and similar. Now questions tend to be less technical. This holds
for Stockholm where they launched the Glue Smart Lock. However the smart lock market is less advanced
in London and insurance and security is probably even more important in London as Londoners in general
have a lower trust for people and institutions than Sweden (Orre, 2017b). The survey, conducted in London,
shows that 64% would hesitate to buy a smart lock and the main concern is security. When asked about
how early you generally try a new technology, the participants identified themselves as being ”First (5%),
”Among the first” (20%), ”In the middle” (45%), ”Among the last” (30%), ”Last” 0%. Comparing this with
the distribution of adopters in Roger’s Bell curve, the result shows us that the participants in the survey
perceived themselves to be earlier on trying new technologies compared to the general population. People
that are early to adapt new innovations often have a higher financial liquidity than people that are slow to
adapt new innovations, and the majority (59%) of the participants in the survey had a annual income higher
than £85,000, which can be one explanation to why the participants perceive themselves to be relatively fast
on adapting new innovations.
39
Figure 16: Results from how early the survey participants perceive themselves to try new products combined
with Roger’s Bell curve
The smart lock has potential to be a solution to the growing last mile delivery problem and it is hence
also relevant to look how the adoption of new last mile delivery solutions. The rate of which people adopt
new delivery solutions can influence the rate of which people adopt the smart lock as a delivery option.
Other non-traditional delivery solutions are ”Click and Collect” in stores or at assigned lockers. Caminsky
(2017) identifies the customers of InPost UK, a company that provide locker pick-up, to be innovators or
early adopters.
Combining the empirical results from our survey with the interviews, it seems as smart locks are in the
early adopter phase approaching the early majority. Smart locks has the potential to o↵er many di↵erent
use cases around the lock such as in-home delivery. Other use cases around the smart lock will probably
be adopted slower than the adoption of the primary function of the smart lock, and other last mile delivery
solutions are currently identifying themselves to be in the innovator or early adopter phase.
Relative Advantage
According to Rogers (2003), adopters are more likely to adopt an innovation if there exists relative advan-
tages of the new innovation compare to its predecessors. Locks is a product that rarely is changed and
primary attributes of a smart lock compared to a traditional lock is hence hard to compare. Additionally,
many of the smart locks are mounted on the existing lock. Secondary attributes, such as relative advantage
is contingent upon the perception and context of the individual adopter. When the survey participants were
asked ”What value would a smart lock give you”, 55% acknowledged not to need to keep track of a physical
key as an added value. Other value adders are knowing who comes and goes from you home (50%), more
controlled access for service personnel (48%) and easier access for friends/family (48%).
To unlock the door through the smart phone and not needing to keep track of a physical key can be viewed
as a primary functions that all identified smart locks o↵ers. Many of the identified locks also o↵ers Activity
Log, to give additional security and sense of control. Another function connected to the lock itself is the
Autolock that several producers also o↵ers. These functions o↵er relative advantage of the lock compared
40
to the classical lock. Additionally there are producers such as August and Glue that o↵ers additionally
use cases around the lock. Smart lock producers can create additional relative advantages such as in-home
delivery, easy access for temporary tenants and in-home services by creating partnership with companies in
the retail, delivery and home rental sector. The survey participants choose Dry-Cleaning (66%), Groceries
(64%) and Retail Goods (59%) as the top 3 products they would be interested in getting in-home delivered.
This survey took place in London where there are several companies o↵ering pick-up dry cleaning ordered
via the phone such as Zipjet, Laundrapp and more. Smart lock companies should identify the current digital
o↵ering that exists in the customer area and try to take advantage of potential value-adding partnerships
within niches.
Caminsky (2017) mentions that the growing e-commerce in London has lead to a more complicated
delivery process. When asked, consumers often answers that they prefer to get their parcels delivered
at home, but the rate of people at home to receive parcels are declining simultaneously as the e-commerce
deliveries are growing massively (Finger, 2017). The smart lock can hence o↵er a convenient in-home delivery
which would be a clear relative advantage compared to the traditional lock. In-home delivery and smart
locks in general could be a big advantage for those who su↵er disabilities. A lot of elderly or disabled people
live in a semi-independent living with nurses and helpers checking in to take care of daily errands such as
buying food groceries. Smart locks could enable direct delivery of groceries and retail goods without any
extra assistance, which probably would be a cheaper solutions for the caretakers, and would enable many to
undertake daily activities which they previously would have relied upon external support.
A lot of retailers, especially in the fashion industry, are struggling with increased costs of delivery and
shrinking margins. Standard home delivery often lead to many delivery attempts as the customer might
not be in. Many attempts leads to a higher delivery costs, and in the end the customer might send back
the product. This makes the last-mile delivery problem significant in the retailer industry. (Finger, 2017).
However, when examining the di↵usion of last mile delivery solutions one should note that increased costs
of delivery is a consequence that a↵ects the retailers rather than the customer. For the customer, there
is no extra cost or little extra e↵ort if they are not at home when the package arrive. The customer will
simply wait until the next delivery time and hope that this matches their schedule. The last mile delivery
problem and relative advantages in finding solutions will probably increase the di↵usion of smart lock among
B2B customers and possible partnership companies as the relative advantage in finding a last mile delivery
solution is more significant than for the customer him- or herself.
Compatibility
64% of the participants would hesitate to buy a smart lock. The main reason for this is that 50% are
concerned about safety, 44% do not want to spend money on a smart lock and 13% do not think the tech-
nology is advanced enough. 73% do not have any smart home technology products in their home. IoT is
perceived as a privacy threat by some, and protection of data and privacy is one of the biggest challenges
for the customer adoption of emerging IoT innovations. Smart home technology and specifically smart locks
are in-home products and it is not surprising that the concerns about safety and privacy are significant for
those. Security is important when it comes to adoption of new technologies which also is confirmed during
our interviews. Caminsky (2017) highlights the importance in security for smart locks by asking ”Do people
feel comfortable giving out access to their home with all their things? Who are responsible if something
happens?”. Finger (2017) also concludes that it is important to have a convenient solution that does not
require any extra e↵ort or safety concerns. Finally, Weldon (2017), from the US largest smart lock producer
41
answered in the interview that the largest obstacle for the adoption of August Smart Lock was the price and
the security concerns, especially about potential hackers. A life with increased presence of technology can
create a sense of loosing control among the users. It is important for smart home technology in general, and
specifically smart locks, to ensure customers that their products are safe and that personal data is protected.
62% of the participants would get an increased trust for sharing their digital key to family members, friends,
cleaners and tenants by insurance. 53% would have an increased trust if they had the ability to communicate
with the person, 47% if they always were assigned the same personnel and 37% if they had a personal profile
connected. Smart lock producers can influence the adoption of smart locks by increasing the trust for their
products through these kind of incentives. Weldon (2017) also thinks that smart home technology products
such as Amazon Echo, Nest Thermostat and Philips Hue Light Bulbs that already are in the early majority
phase will increase the adoption of smart locks. Big, leading and successful smart home technology product
is changing the values and norms in the social system and making us more used to these kind of solutions.
To what extent smart locks fits the existing skills, equipment, procedures and performance criteria of the
potential adopters depends on what function the smart lock fulfill. Both Branca (2017) and Weldon (2017)
mention that there is a future demand to have smart home products that work seamlessly together for smart
locks to adopt in the future. Apple HomeKit and Amazon Echo both try to fill in this role, but only August
Smart Lock is compatible with these. The adoption can be influenced by the availability of information
about the technology from other users, trained killed users, technical assistance and maintenance and of
complementary innovations, both technical and organizational.
It is a big challenge for smart locks, and new IoT technology in general, to adopt to new norms such as
changed privacy and security among it consumers. The adoption can be influenced by introducing insurance
and more personal profiles for users of the smart lock function. When smart home technology is adopted
more in general this will also influence the adoption of smart locks. Large, traditional technology compa-
nies such as Philips are active in the smart home technology market. The di↵erent smart home technology
products needs to be able to work together for increased di↵usion.
Complexity
Smart locks is a relatively new products, and di↵erent producers o↵ers di↵erent types of locks and functions.
Some are mounted on the existing locks while some replaces the whole lock. August and Glue Home o↵ers
other functionality such as in-home delivery and have di↵erent partnership companies. There is no clear
definition of what a smart lock is, and it is hence di�cult for the consumer to understand the product fully.
This can be one of the explanations for why 64% of the participants in the survey would hesitate in buying
a smart lock. It is important for smart lock producers to clearly show the function the lock o↵ers, and
explain this for the customer. Weldon (2017) says in the interview that ”the 3 most important factor for
the success of August was the design of the device, easiness to install and use and the ”use case””. This
is all connected to making the product easy and understandable for the consumer. Furthermore, August
launched their product in the Apple Store which made the product visible for early adopters of smart home
technology.
Many of the smart locks producers have extensive web-pages and support when installing their devise.
This is another thing that producers can use to influence the adoption and raise awareness of the product
through. Branca (2017) and Weldon (2017) both also discusses that a good customer support is essential
in order to help installing but also to inform the potential adopters about the full potential of the innova-
tion. Technical assistance and customer support is of high importance to increase the adoption of smart locks.
42
Triability
The smart locks that we have identified costs between $99 - $500. Smart locks that are attached to the
current locks are in general cheaper than smart locks from example Yale that replaces the existing lock are
more expensive. Buying a smart lock is a relatively large investment and the triability of smart locks is
quite low. Weldon has identified the largest obstacle of customer adoption of the August Smart Locks to be
the price. A triable innovation represent less uncertainty to potential adopters and allows learning by doing
Rogers, 2003). Producers can increase the triability by for example o↵er a free ”try on” period for customers.
The smart lock producer could have a set number of locks they rotate between people who wish to try the
product for a fixed period. The survey shows that the majority of the participants identified the primary
functions as value adding: ”Not needing to keep track of a physical key” 55%, ”Knowing who comes and goes
from your home” 50%. Smart locks could be a solution to the growing last mile delivery problem, but only
40% of the participants in the survey thought this is value adding. Promoting the product and o↵er trial
periods could make customers understand the value of not only the primary use case in using the smart lock
to open the door, but also other value adding use cases that the smart locks can o↵er such as in-home delivery.
Observability
The model of di↵usion assumes that innovations spread as potential adopters come in contact with existing
users of an innovation. The chances of adoption is hence greater if other adopters easily can observe relative
advantages of new technologies. (Rogers, 2003). Again, this depends on what use cases the smart lock is
o↵ering. If it can be used for example short term letting through AirBnB this would make it visible for the
tenants and they would notice the relative advantage of not having to arrange a solution to hand over the
physical key. The lock is also visible in the home when having friends and family over. The observability
increases if the smart lock has a system of added use-cases around its function and o↵ers more than just the
unlocking feature.
5.2 The Chasm Model
In order to understand whether a technology is ready to cross the chasm, there are four di↵erent factors that
needs to be analysed; the market segment, the product o↵ering, the competition and the distribution and
pricing (Moore, 1991).
The Market Segment
From the interviews, two di↵erent market segments for smart lock has been identified. One is more focused
on the product it self, the other one is more focused on the system of use-cases around it. Most of the
smart locks appears to be targeting the first segment. The characteristic customer here is a young, tech
interested male who consider himself an innovator or at least an early adopter. The second market segment
is more evenly divided between males and female and instead of having the lock in focus the services provided
through the lock is more interesting. Orre (2017b) expect this to be the main customer for Glue next year.
This second market segment is more likely to consist of people belonging to the early majority which will be
crucial in terms of becoming the market leader. This market segment is only possible to target if you o↵er
solutions to the last mile delivery problem. Hence, some smart lock providers will not be able to reach this
segment without adding services to their locks. Weldon (2017) also states that there are opportunities in
the real estate and DIY rental space market and have therefore partnered up with AirBnb. This could be
43
an alternative for reaching a bigger segment without adding services connected to the last mile delivery.
The Product O↵ering
When the smart lock had just entered the market, the focus was only on the technology. Orre (2017b)
said that the questions Glue Home mostly got was connected to technology. As more people start hearing
about smart locks, the most common questions have now shifted away for technology. As mentioned in all of
the interviews, safety is on of the main concerns among potential customers today. Therefore, the product
can no longer only be sold because it is a new, cool tech product but instead need to convey safety and
security. Hence, the lock needs to be di�cult to hack and have a high encryption level, but for a person who
is not interested in technology, this does not necessarily make this person feel safe. Therefore, the product
o↵ering needs to include more than just the lock itself. One of these features is insurance. In the survey,
63% answered that insurance would increase the trust. Glue, for example, is currently accepted by three
insurance companies. Before crossing the chasm, there needs to be a general acceptance of smart locks by
insurance companies.
One other feature many of the smart locks o↵ers is help with the installation. Branca (2017) states that
professional installation and good customer support is of high importance.
Glue Home and August Home are two smart lock companies that currently o↵ers the system of additional
use-cases around the lock. For this to be valuable for smart lock buyers, the partners that are part of this
system needs to be companies of interest for the buyers. These partnership are especially important to be
able to reach the market segment that buys smart locks for its delivery option and other services.
The product o↵ering is evolving and more features are being added. Still, there is no consistency in the
o↵ering among the di↵erent smart locks. It could therefore be di�cult for the customer to know what to
expect from a smart lock. This will most likely be easier when a dominant design has emerged and there is
a standardisation among the di↵erent lock brands.
The Competition
The competition can be divided into two sub categories; The smart lock competitors and the last mile
delivery competitors.
The smart lock market has many players and the competition is increasing. Many of the smart lock
producers are start ups. The di↵erent lock have some things in common, like the ability to unlock via
Bluetooth. Many of the smart locks also have features where you can grant access and see who is using
the lock. Two companies, August Home and Glue Home, currently o↵ers a system around the smart lock
through partnerships with other companies. Therefore, the competition among smart locks is high even
though some have di↵erentiated themselves through features not provided by all smart locks producers.
On the last mile delivery side, there are many di↵erent alternative such as lockers, smart boxes, drones,
trunk deliveries and Click and Collect. The biggest di↵erence between the system provided by a smart lock
producer and theses alternatives is that the product will not be delivered in-home. Some of these alternative,
like lockers, have a size limit of the product being delivered, while the smart locks does not. On the other
hand, the lockers does not required the customer to invest in a locker while the smart lock producer requires
the customer to buy a lock. Therefore, there are some di↵erences in the use-cases between these alternatives
and the smart locks, but they are still considered competitors which increases the competition on an already
competitive market.
It do exist competition among the smart locks and therefore the crossing of the chasm is possible if only
44
considering this factor.
Distribution and Pricing
Moore (1991) suggests that the first channel should be direct sales in order to directly explain the benefits of
the product for the early majority. Even though there are some type of sales events, the main distribution
channel appears to be through the website. For both Glue Home and InPost UK, some marketing goes
through their partners. The partners inform customers about how the product or service work and where
to get it. This enables the companies to have direct marketing and therefore more easily create a demand.
The pricing is mainly set through cost based pricing and the smart lock providers are aiming to lower the
prices even further. Glue has recently lowered its price to enable more people to buy the lock. The prices
between the competitors are very similar and no one is using a price premium at the moment. As suggested
in the Chasm Model (Moore, 1991), there should be a premium that shows which product is the market
leader. This could be even more important considering the concerns people have for the safety of the lock.
This is not a product where people accept a malfunction. Therefore, a premium can signal higher quality
and give the feeling of being more secure. Despite this, the survey shows that 44% are hesitating to get a
lock since they do not want to spend money on it. Weldon (2017) says that the price is the biggest obstacle
for customer adoption.
Even though it is suggested to have a premium price, this market appears to have price sensitive cus-
tomers. It is di�cult to get customers to invest in a smart lock if it is expensive and therefore the prices
should not be raised.
5.3 Factors A↵ecting Di↵usion of Technology
Rosenberg (1972) found five factors that impacts the rate of di↵usion or the perceived rate of di↵usion. To
understand whether the di↵usion of smart locks will be fast or slow, four of these factors will be analysed
for the smart lock market. The first factor, Continuity of Inventive Activity, is about how the di↵usion rate
can be perceived as fast or slow depending on when the invention date is set. Therefore, the factor is not
relevant for understanding how fast the rate will be going forward.
Improvements of Inventions after First Introduction
The smart locks are constantly being improved. Most of the improvements are with security and user
friendliness. Both the survey and the interviews shows that the main concern among customers are safety.
Therefore, the main improvement area should be the safety in order to accelerate the di↵usion rate.
Technical Skills Among Users
The smart lock can appear to be a complex product, but is actually only di�cult to use if people do not know
how to use a smart phone. Since everything, except the installation, is managed through a smart phone,
the technical skills among users are more dependent on how skillful users are with their smart phones. The
smart phone has been on the market for around a decade now and the di↵usion is very high and it can be
expected that most users know have to use it. The installation of the smart lock is often easy, and many of
the smart lock producers are o↵ering professional installation. Therefore, the smart lock can be considered
less complex and should have a fast learning curve.
45
Skills in Machine-Making
Many potential customers today considers the price of a smart lock to be too high. Weldon (2007) states
that the high price has been the main obstacle for customer adoption of the locks. Therefore, the skills in
machine-making needs to be improved further in order to reach full di↵usion and make the price in line with
what customers are willing to pay.
Complementaries
We now have two smart lock producers that o↵ers the system of additional use-cases around the lock. These
types of partnerships will make the value of a smart lock higher for the customer and attract a wider range of
customers, both through marketing and actual usefulness. Therefore, it is important to find complementary
companies to partner with the smart locks in order to increase the rate of di↵usion.
There currently exists a lot of di↵erent smart home products, but there is no convenient way to integrate
all these products in the home (Barca, 2017). There would therefore be useful to make the di↵erent smart
home products more easy to integrate with each other.
As Orre (2017b) mentioned, there is a lot of unnecessary smart home products on the market as well.
These are the opposite to complementary since they are likely to decrease the di↵usion rate due to their lack
of valuable use. Products like this might scare some customers o↵.
Improvements in Old Technologies
The traditional, mechanic locks have not changed much in recent years. Nevertheless, there is an increase
in the use of electronic locks. These electronic locks do not necessarily need to be smart but can be opened
by pin code or key fobs. Therefore, the improvements in old technologies might slow down the di↵usion of
smart locks. On the other hand, the smart lock might also get an upswing when people are getting more
used to non-traditional, electronic lock in their households. Hence, it is our belief that the increased use of
electronic locks will also increase the use of smart locks even though it could be di�cult know for certain.
5.4 The Product Life Cycle of Smart Locks
The primary use case is that the smart lock perform locking and unlocking operations on a door when it
receives such instruction for an authorized device. The most prominent secondary use case is to use the
smart locks for in-home delivery and by doing so solving the last mile delivery problem. August and Glue
Home are examples of producers that have partnership with di↵erent retail and delivery companies to make
this possible. The Product Life Cycle for smart locks can hence be analysed through two di↵erent cycles:
One for the primary use case of smart locks and one for the secondary use case to solve the last mile delivery
problem. There are currently many di↵erent smart lock models as well as many di↵erent solutions for the
last mile delivery problem. Di↵erent smart locks come with di↵erent design and features, even though it
seems to be centering around a simple design with mounted lock rather than installing a completely new
lock. The primary smart lock function seems to be in the end of a fluid phase. Solutions to the last mile
delivery problem comes in a rich mixture of experimentation ad competition with many di↵erent models
such as lockers and smart locks. This solution seems to be in further back in the fluid phase.
46
5.5 IoT Framework and External Factors A↵ecting the Smart Lock Market
There are a number of obstacles that IoT innovations such as smart locks needs to overcome in order to be
successfully adopted by the majority and deliver its full potential. These are Technology, Interoperability,
Privacy and confidentiality, Security, Intellectual property, Organization and talent and Public Policy. Price
is an issue for the adoption of smart locks price of technology would be beneficial to make more people buy
smart locks. Our survey shows that 44% identifies the price as an issue as they do not wish to spend money
on a smart lock. Interoperability is a big obstacle in the smart home technology also identified by both
Weldon (2017) and Branca (2017) in interviews. Di↵erent IoT devices and systems need to work together
in order to realise their full potential. Yet only one producer, August, have smart locks that are compatible
with devices such as Amazon Echo and Apple Homekit that enables di↵erent smart home technology to work
together. Smart locks does not in general require that much data compared to other new AI or machine
learning based IoT innovations. Privacy and confidentially or Security in terms of gathered data is hence
not that relevant for smart locks at this stage. Security in terms of risk of hacking of the device to break
into the smart lock owners house or for eventual delivers who have temporary access to the door is on the
other hand a big concern among potential consumers. 64% of the participants would hesitate to buy a smart
lock and the main reason for this is that 50% are concerned about safety. Intellectual Property is not that
relevant for the smart lock industry, as the smart locks does not gather a lot of data. However, if the smart
locks are integrated into a system such as Amazon Echo or Apple HomeKit, it is important to come with an
agreement about the ownership rights of the data. Many of the smart lock producers are recently started
start-up with an entrepreneurial spirit and a mindset to use new technology and data-driven decision making.
It is important to embrace this mindset. This is specifically important to traditional lock producers who
has entered or are entering the smart lock market. Insurance is an important factor for increasing trust for
smart locks, and Public Policy can be relevant to establish rules about liability. The governments also play
an important role when is comes to establish rules about data collection and sharing.
Many of the interviewed industry professionals has highlighted the importance of standardisation in order
to succeed. Caminsky (2017) argues that a product must be simple and standardised in order to succeed.
Branca (2017) discusses that one of the explanations for why the smart locks has been more adopted in the
US compared to Europe can be an e↵ect of the standardisation issue in Europe. There are several di↵erent
mechanical lock in Europe, which makes it hard to produce a smart lock that is compatible. In our survey
we found that only in London at least 10 di↵erent models were used. The most common types of locks
are ”Key cylinder on outside” (26%), ”High security night latch rim lock” (26%) and ”Euro cylinder with
separate handle” (24%). The US, on the contrary has a limited mechanical locks that the majority of the
population use in their home. Weldon also mentions that one of the challenges for them to expand further
to Europe is that the most common locks in the US not is the same as in Europe.
47
6 Conclusion and Further Research
This chapter presents and discusses the conclusions of the study, the answer to the research question as well
as implications of the study. The chapter also contains suggestions and recommendations for future studies.
6.1 Conclusion
The purpose of this thesis was to investigate the current market for smart locks and to identify drivers and
barriers for the continued di↵usion of smart locks in urban areas. In order to fulfill this purpose the following
research question was formulated:
• How can the di↵usion of smart locks in urban areas be accelerated?
The main research question will be answered through three sub-questions:
• What are the main factors hindering the di↵usion of smart locks among customers in an urban area?
• Which factors does the existing theories of di↵usion classify as the main obstacles of the di↵usion of smart
locks?
• What substitutes to smart locks are o↵ered, and how can they influence the continued di↵usion?
This research question was addressed by mapping the smart lock market and the di↵erent actors within it,
in the empirical setting London. Additionally, we examined the di↵usion of smart locks among Londoners by
conducting a survey of convenience. Finally we conducted five di↵erent interviews with industry professionals
within the smart lock and last mile delivery market. In order to answer the research question, the overall
research methodology was to conduct semi-structured interviews with the industry professionals.
By using our empirical finding to analyse the smart lock market with the di↵erent frameworks presented
in the chapter ”Literature Review” we have identified the customer adoption of smart locks to be in the
early adopter phase, soon approaching the early majority and hence crossing the Chasm. The main concerns
that customer have with smart locks is the safety and that they do not see the need in spending money on
it. There are several companies, both established mechanical lock makers, as well as new start ups, o↵ering
smart locks. Smart locks can potentially o↵er several use cases and the competition varies depending on
how many use cases the smart lock fulfills. One use case that has a big potential is in-home delivery which
potentially could solve the last-mile delivery problem. There are several companies developing solutions to
solve this and a high competition to become the dominant design.
We have identified five areas that are of high importance in order for the smart locks to reach their full
potential. It is critical for smart lock producers to find creative solutions within these areas in order for the
smart locks to reach full di↵usion. To make the product o↵ering complete, the smart locks need to o↵er
several use-cases, the producers needs to assure the customers about the security of the smart locks, there
need to be an accessible customer support that helps with installation as well as educate the customer about
the di↵erent use-cases around the smart lock. The triability of the smart locks is currently low and the price
of the smart locks is an obstacle for the di↵usion. The triability needs to increase, or the price decrease, in
order to increase the pace of di↵usion.
48
Figure 17: Areas of importance for future di↵usion of smart locks
Several Use-Cases
The relative advantages of a smart lock compared to the traditional mechanic lock are too few if the smart
lock o↵ers only the primary lock- and unlock function. Smart lock producers need to create additional use
cases around the smart lock by collaborating with other companies in the retail, service and home rental
sector. Existing examples of this is in-home delivery, access for service personnel and to use the smart lock
for short-rental such as via Airbnb. The increase of use-cases creates relative advantage not only in terms
of not needing to have a physical key, but also when it comes to organise and schedule delivery, rentals and
in-home services. Hence, smart lock producers should create use-cases for the customer through partnership
with other companies, in order to improve the smart lock relative advantage to traditional mechanical locks.
Participants in our survey identified more controlled access for service personnel as the most value adding
secondary use-case for the smart lock. Partnerships with service companies, or a convenient software solution
for sharing access with private in-home service personnel is hence one example of value adding use-case for
the customers. Dry-cleaning was the most popular product in our survey that participants wanted to get
in-home delivered. London, where the survey took place, have several companies o↵ering digital pick-up dry
cleaning. The di↵usion of digital dry-cleaning could be one explanation for why many participants identifies
this as a product they want to get in-home delivered. Smart lock producers should identify the current
digital product o↵ering and trends in their respective geographical markets and use this knowledge to o↵er
e↵ective and value-adding partnerships, such as with digital dry cleaning companies in London. Another
service that could beneficial a lot from smart locks is health care. The introduction of this technology for
people living at home but su↵ering for disabilities could enable them to undertake daily activities without
support from caretakers.
These partnership unfolds a possibility for direct marketing to the partners customers, which can create
further demand of smart locks and increase customer di↵usion. Relevant partnership companies should value
the partnerships with the smart lock producers as the last-mile delivery problem is significant and costly for
many, in particular retailers.
There is no clear definition of a smart lock today, and many struggle to understand what values a smart
lock adds. It is hence very important that the smart lock producers clearly communicate and advertise the
di↵erent use-cases that their smart lock o↵ers.
Ensure Security
We have identified safety associated with smart locks and in-home delivery as the main concern among
potential customers. In order to increase the compatibility of the smart lock, the customers need to feel
comfortable and secure while using the lock. To ensure the customers security and to overcome the security
norms around the traditional lock, smart lock producers need to have a clear insurance policy both for the
smart lock itself as well as for risks around other use cases such as in-home deliveries and temporary access
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for service personnel. The smart lock producers need to have a clear insurance policy both for potential
break-ins as well as to whom has the responsibility if an employee of a partnership company commits a crime
while for example delivering a product.
Integrability
Many customers are looking for a integrated system with the possibility to connect all their smart home
products seamlessly. This will probably be increasingly important as the smart home technology market
grows. Hence, smart lock producers should make their products compatible with other smart home technol-
ogy products. Examples of solutions that connect di↵erent smart home technology are Amazon Echo and
Apple HomeKit. The di↵usion for smart home technology is increasing and the smart lock market can also
increase its di↵usion by enable the smart lock to work with solutions created by large names such as Amazon
and Apple. The smart locks will accelerate its di↵usion by taking advantage of the increasing attention
smart home products are receiving.
Customer Support
The customer support should be considered a highly important part of the product o↵ering. The customer
support should o↵er both help with installation and be used as an educational channel for the customers. A
good customer support will increase the value of the smart lock by teaching the customer about the benefits
and the use-cases they are o↵ering. It is very important that the customer support educates customers and
potential customers of the di↵erent use-cases around the smart locks, as there is no clear definition of a
smart lock and many simply does not know what values a smart lock can o↵er.
Increase Triability
Furthermore, some have identified the price as the main obstacle for customers to buy the smart lock. In
order to increase the triability of the lock, campaigns such as free trial periods and subsidization of the smart
locks price by the partners could be used.
Figure 18: Summary of Analysis of Frameworks (red implies problem areas, yellow is neutral, green is good)
The product o↵ering will not be complete without additional use-cases beyond the locking and unlocking
function, insurance and responsibility plan and a good customer support that o↵ers both informative and
installation help. The price is a big obstacle for many customers and the trialability for smart locks is low.
The price for smart locks needs to decrease or the trialability increase in order to accelerate the di↵usion of
the product.
The smart lock is currently identified to be in the fluid phase of the product life cycle, but the products
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are starting to center around a dominant design. The last mile delivery problem and solutions to these are
also in the fluid phase but the products takes a much wider range of solutions. Last mile delivery solution is
hence identified to be further back in the fluid phase with a longer time ahead to reach a dominant design.
Di↵erent geographical areas have di↵erent conditions for the smart lock products, as some have a larger
number of used merchandise locks. In the US, most of the population use the Lockbolt while Europe has
plenty di↵erent models. This creates a standardisation issue in Europe, as the same smart lock model can
not be used for every customer.
Total growth spending of smart home technology is expected to grow from 12 billions in 2016 to 20 billions
in 2020 in Western Europe. Many smart home technology producers are still experimenting with di↵erent
strategies and products. There are a number of smart lock producers and models but we only identified
two companies that o↵ers more use-cases around the smart lock, August and Glue Home. Their locks are
available to buy globally but are only compatible with Standard Deadbolts and Scandinavian Standard
Locks. Their use-cases and partnerships are limited to the US and Sweden respectively. We have identified
smart locks with many use cases and product o↵ering as stated above to be the most likely to succeed. There
are currently not many producers that have this product o↵ering and there is hence a lot of opportunities
for smart lock producers to penetrate new markets.
6.2 Implications
This thesis contributes with more knowledge to the rather unexplored area of smart locks and the di↵usion of
this technology in urban areas. The study contributes with empirical data and evidence from the empirical
setting London. Furthermore the thesis also contributes to more knowledge in how consumers adopt new
IoT innovations in Urban Areas.
The contributions of this thesis provide insight of strategic considerations for smart lock producers in
terms of product o↵ering and decisions regarding how to approach new customers in particular. The findings
indicates that the security is the biggest concerns among customers and that the smart locks producers needs
to o↵er several use-cases around the smart locks in order to create relative advantage. Key areas that the
smart lock producers should consider in their strategical planning are Several Use Cases, Ensure Security,
Integrability, Customer Support and Increase of Triability.
6.3 Further Research
For further research we suggest a study with focus on another urban area, preferably in Asia or USA. The
results from this study might not be applicable outside Europe. We also suggests that a survey with random
sampling and a larger sample size will be conducted in order to get a statistically significant result from the
survey. Furthermore, we have not interviewed employees from all smart lock producers. Therefore, it could
be interesting to understand the rest of the producers opinions and these are the companies further research
should focus on. There will most likely be more IoT innovations in the future, which makes privacy and
integrity among these a relevant and interesting area to study. We suggest further research within the area
of personal security and integrity and its role in the di↵usion of new IoT innovations.
51
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8 Appendix
8.1 Survey Questions and Results
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8.2 Interview Questions
General/Di↵usion
• Which problems do you see with smart home technology and smart locks in particular?
• How far along do you think the customer adoption (in smart homes) in London is?
• Have you seen any changes in customers behavior the last couple of years? If yes, which?
• How do you anticipate the future development of smart locks to be?
• What factors do you think made your product successful in terms of customer adoption?
• Which factors do you believe are important to increase customer adoption?
• What were the biggest obstacles associated with the customer adoption?
• Did the company’s strategy change in order to reach a new, broader, customer base?
• How open-minded do you consider Londoners to be for new innovations and technology?
• How do you describe your typical customer?
• What do you think are the biggest advantages of smart locks?
Last Mile Delivery
• How does the consumer behavior and preferences for delivery and services look in London?
• How is the competitive situation for your company?
• What alternative products are o↵ered?
• How does the consumer behavior and preferences for delivery and services look in London?
Smart Home Technology and Smart Locks
• How is the competitive situation for your company?
• What alternative products are o↵ered?
• Is the competitive situation changing?
• Which are the biggest concerns customers have with smart locks?
• What are the largest trends within smart home technology?
• How do you describe your typical customer? (Young/Old, Wealthy, Hip)
Online Retail
• What kind of solutions to the last mile delivery problem are you investing in/using?
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