The “Haves” and “Have Nots” Among the Internet of Things

RESEARCH REPORT | FEBRUARY 2018

Diverging consumer points of view in the IoT market

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The “Haves” and “Have Nots” Among the Internet of Things

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The Internet of Things (IoT) market is bursting with potential.According to IDC’s projection, the global IoT market will reach $1.29 trillion by 2020. Intel predicts that by the same year, there will be a total of 200 billion connected devices in the market—a dramatic increase from two billion in 2006.

But for the IoT market to fulfill its potential, companies developing products and services in this space need to figure out how to better connect with consumers. After all, for every Amazon Echo, there’s a Juicero. For every Nest Thermostat, there’s a Jawbone. Success in the competitive IoT market is hardly guaranteed. And for an IoT product to garner attention and grow demand, the product’s connected benefits must be understandable and resonant.

To learn more about the IoT market landscape, the technology division of Market Strategies International examined current awareness of and experience with this space among US consumers and workers. Our findings shed light on what the industry needs to do to accelerate growth, and how individual companies can gain a competitive product development advantage in the next decade.

INTRODUCTION

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The “Haves” and “Have Nots” Among the Internet of Things

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Consumers who are more educated about IoT are more likely to want IoT products and to grow demand for offerings in this space. For the majority of the people we engaged, however, people have no idea what IoT is. While the connected benefits may meaningfully improve home and workplace environments, at this point, people don’t know enough about what’s possible to seek out these technologies.

We asked 1,007 consumers if they were aware of a new category of connected technology called the Internet of Things or IoT. Close to 70% said no; just 23% said they know what the term entails. The rest were unsure.

The IoT space not only lacks awareness, it also lacks a single, widely-accepted definition. When we asked consumers what they thought IoT was, we received a hodgepodge of interpretations, with no single definition standing out. Sixteen percent believe IoT broadly encompasses all technologies that connect to the internet; the same percentage believe that it refers to anything that’s able to send and receive data.

Awareness of IoT

An Emerging Market with an Education Problem

Consumers who are more educated about IoT are more likely to want IoT products and to grow demand for offerings in this space.

Description of IoT—Work in IoT vs non-IoT work environment

Work in IoT environmentWork in non-IoT environment

Able to get information/send and receive data

Connected through the internet [general]

Technology/innovation

Connected devices/appliances

Controlled remotely/using apps

Household items integrated/smart home

All things connected [unspecified]

Don't know

No/None/Not any/Nothing

Other

15%

15%

11%

6%

4%

3%

2%

4%

2%

12%

16%

16%

6%

8%

8%

20%

7%

12%

2%

8%

23%YES

NO

68%

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The “Haves” and “Have Nots” Among the Internet of Things

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While only one in four workers are aware of the IoT category, a much higher proportion of them have had experience using IoT technologies.

Our findings may be surprising given the Tech media’s furious coverage of this space in the past couple of years, but it suggests that this category is facing an emerging education gap.

The need to educate consumers about IoT becomes painfully obvious given the surprisingly-high percentage of people who have experienced IoT technologies in their personal lives or at their workplaces. While only one in four workers are aware of the IoT category, a much higher proportion of them have had experience using IoT technologies. For instance, nearly half of consumers (48%) have used wearable technology, and one in three have experienced home and building automation technology.

Experiences with IoT

48%

32%

24%

18%

17%

10%

10%

7%

6%

6%

1%

1%

1%

Wearable technology, including activity trackers

Smart appliances that use Wi-Fi for remote monitoring

Home and building automation technology

Smart medical devices, including those for remotemonitoring and notification

Biochips in humans or animals used to collect/sharedata or locate humans/animals

Smart retail environments that help with checking outand tracking inventory

Environmental monitoring of air, water or soil quality

Infrastructure management of bridges, railways,roadways, etc.

Agriculture sensors and monitors

Control and management of manufacturing systems

Smart phone

Don’t know

Other types of IoT technologies

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The “Haves” and “Have Nots” Among the Internet of Things

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Workers who are aware of IoT are significantly more likely to want a variety of IoT products at work.

The education gap in the IoT market isn’t trivial. There’s a big incentive for companies to bridge this gap as soon as possible. Why? Because workers who are aware of IoT are significantly more likely to want a variety of IoT products at work. In other words, workers who know what connected products could do are more likely to demand and advocate for these products in the future.

Types of IoT work environments—IoT Aware vs IoT Unaware

IoT awareIoT unaware

61%

15%

10%

5%

4%

2%

5%

89%

2%

0%

1%

2%

1%

5%

No, I don't work in an IoT environment

Yes, in an IoT office environment

Yes, in an IoT factory environment

Yes, in an IoT home office

Yes, in an IoT retail environment

Yes, in another type of IoT enabled environment

Unsure

This points to opportunities for technology companies. First, the more IoT-aware workers there are, the more strong advocates of IoT we are likely to see, which would increase demand. Therefore, IoT companies would be wise to invest in marketing. Companies should also find ways to amplify the voices of IoT-aware workers, as these are the people who could help create a business case for connected technologies in the workplace.

Desire for types of IoT technologies [Top-2-Box]—IoT Aware vs IoT Unaware

IoT awareIoT unaware

59%

52%

48%

47%

44%

36%

34%

26%

19%

20%

17%

15%

Wireless device charging through the workspacefor seamless charging

IoT technology controlling the workplace environmentincluding temperature, lighting, etc.

Smart voice and video technology for video-enabledmeetings and discussions wherever you are in yourworkspace, and with colleagues wherever they are

Interactive presentation and collaboration toolsincluding smart video walls for presenting and

brainstorming, and documenting these activities

Smart access to work spaces and computers viabiometric scanning devices

Smart presence tracking so it's clear whether workersare at desks or remote, and available for meetings

and discussions or unavailable

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The “Haves” and “Have Nots” Among the Internet of Things

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One compelling insight from our study relates to what we call the IoT Haves and the IoT Have Nots. We believe the attitudinal and behavioral differences between these groups will shape the near-term future of IoT.

According to our survey, 1 in 10 people have worked with IoT technologies in their workplace, whether in an office, home office, retail space, factory or other work setting. We’ll call this group the IoT Haves. While the IoT Aware have a much better sense than the Unaware of how IoT benefits them personally and professionally, the IoT Haves already have seen it in action at work. They are already benefiting from IoT technologies, and as a result, their desire for additional IoT tech is much greater, and their attitudes related to IoT are more informed and nuanced than the Have Nots.

There’s a clear divergence between the IoT Haves and the Have Nots—three differences in particular should matter to tech companies that want to dominate this market.

DESIREThe first difference is desire—whether or not they’re more likely to want IoT products in the future. In the same way that IoT Aware consumers are more likely to want connected technologies, the Haves are also significantly more interested in emerging IoT technologies like wireless device charging stations and smart access to workplace presences.

The IoT Haves and Have Nots

The Haves are significantly more interested in emerging IoT technologies like wireless device charging stations and smart access to workplace presences.

Desire for types of IoT technologies [Top-2-Box]—Work in IoT vs non-IoT work environment

Work in IoT environmentWork in non-IoT environment

67%

63%

63%

61%

55%

48%

25%

18%

32%

16%

18%

14%

Wireless device charging through the workspacefor seamless charging

IoT technology controlling the workplace environmentincluding temperature, lighting, etc.

Smart voice and video technology for video-enabledmeetings and discussions wherever you are in yourworkspace, and with colleagues wherever they are

Interactive presentation and collaboration toolsincluding smart video walls for presenting and

brainstorming, and documenting these activities

Smart access to work spaces and computers viabiometric scanning devices

Smart presence tracking so it's clear whether workersare at desks or remote, and available for meetings

and discussions or unavailable

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The “Haves” and “Have Nots” Among the Internet of Things

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Consumer privacy and data security are concerns across the board, but the Have Nots are more likely to be worried about these topics than the Haves.

Tech companies need to identify the IoT Haves and find out what matters to these workers. As early adopters of IoT technologies, the Haves want more of these products in their workplaces. There’s a huge opportunity for tech firms to harness their voices and gather insights that will lead to more demand for their products.

CONCERNSThe second difference is concerns. As you might expect in an emerging sector, consumers have concerns about IoT technologies. But the Haves and the Have Nots hold significantly different concerns about IoT’s impact—and those differences suggest that companies should adjust their messaging accordingly.

The Haves are worried about the time commitment it takes to implement IoT technologies and their ease of use, likely because their experience so far with IoT hasn’t been seamless. They are more aware of the possible kinks faced as these technologies are introduced in the workplace.

Concerns about IoT in the workplace—Work in IoT vs non-IoT work environment

Work in IoT environmentWork in non-IoT environment

53%

45%

35%

31%

21%

4%

1%

60%

57%

21%

20%

11%

20%

2%

Security risks

Privacy issues

Energy issues/needs for charging, backupplans for power outages, etc.

Ease of use issues/it'll be difficult to usethe IoT technology

Time concerns/it'll take more time to usethe IoT technology

None of the above

Other concerns

Consumer privacy and data security are concerns across the board, but the Have Nots are more likely to be worried about these topics than the Haves—in fact, privacy and security concerns dwarf all other topics among the Have Nots. This suggests that privacy and security are table stakes so tech companies must meet baseline levels before consumers consider any IoT solution. Beyond this, mature users are more concerned with ease of use time and energy requirements. These facets of IoT solutions have the potential to differentiate, or even delight, if they are well-executed and meet or exceed expectations of the IoT Haves.

For IoT to grow significantly in the next decade, companies need to address consumer concerns about the technology. Communication and education will be key tools for tech

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The “Haves” and “Have Nots” Among the Internet of Things

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As IoT technologies permeate daily lives, more consumers will want the government to provide some level of regulation.

Do you believe that the US government should regulate the use of IoT technologies in the workplace?

brands, but companies can’t afford to look at the consumer population as a monolithic group. Our study shows that, depending on their level of experience working with IoT products, different groups of consumers hold different concerns. When developing a marketing strategy for an IoT solution, successful companies will conduct communications research to identify the right message for the right consumer segment using the right channel at the right time. A one-size-fits-all messaging will just not work.

REGULATION The third difference is regulation. The Haves and the Have Nots disagree on whether the government should regulate connected technologies. Given that there’s a gap in how these two groups see privacy and security, it follows that their perspectives on regulation would also differ. Indeed, we found that these two groups hold different views on regulation, but the results are not what we expected. We asked consumers overall if the US government should regulate connected technologies and found that, for the most part, consumers are split and more than one-third are unsure at this time.

But when we focus on the Haves and the Have Nots, one surprising insight emerges: the Haves are much more likely to agree that the US government should regulate IoT.

38%35%27%

Yes No Unsure

41%35%24%

17%35%48%

Total

Work in IoT environment

Work in non-IoT environment

Why? Our hypothesis is that those who already have experience with connected technologies know that this space is important enough for the government to play a regulatory role. These workers are already seeing the big potential of the IoT. At the same time, they know the risks—data security, privacy, environmental, etc.—are very real, and, therefore, the government should set some guardrails. In contrast, IoT is still an abstract concept for the Have Nots. But our findings suggest that as more Have Nots become Haves, the call for regulation will escalate.

Technology companies should pay close attention to public sentiment on government regulation. It is imperative that IoT brands engage with consumers—especially those who already use IoT in some way—to keep track of evolving concerns. As IoT technologies permeate daily lives, more consumers will want the government to provide some level of regulation. The IoT industry will be in a better position to satisfy consumers and government agencies, if it understands concerns and appetite for regulation.

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The “Haves” and “Have Nots” Among the Internet of Things

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Technology companies working on IoT products and services can’t afford to innovate in a silo.Our study clearly shows that there’s a significant amount of marketing that companies must do to educate consumers about the benefits and real potential of IoT solutions. And as this space matures, companies need to leverage market research to understand the nuances between consumer preferences and attitudes towards connected devices. Ultimately, the tech companies that have a deeper understanding of their consumers will be in the best position to reap the benefits of the lucrative but increasingly competitive IoT space.

CONCLUSION

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ABOUT THE RESEARCH Market Strategies interviewed a national sample of 1,007 consumers age 18 and older. Respondents were recruited from the e-Rewards opt-in online panel of US adults and were interviewed online. In order to qualify, each survey respondent had to confirm they have either primary or shared responsibility for making household financial and purchase decisions. The data were weighted by age and gender to match the demographics of the US population. Due to its opt-in nature, this online panel (like most others) does not yield a random probability sample of the target population. As such, it is not possible to compute a margin of error or to statistically quantify the accuracy of projections. Market Strategies will supply the exact wording of any survey question upon request.

ABOUT MARKET STRATEGIESMarket Strategies International is the research and consulting partner that helps the world’s most successful organizations thrive. Clients trust us to help them grow by applying exceptional research insight through the lens of deep industry knowledge in consumer & retail, energy, financial services, health, technology and telecommunications. Founded in 1989, Market Strategies is one of the largest market research firms in the world.