Welcome to the fourth and final installment of our current Q&A series with Parks Associates. We have discussed a wide range of topics over the last four weeks, from the latest developments in connected car technology to the key trends influencing the smart kitchen market.
Last, but not least, is Dina Abdelrazik. Dina joined Parks Associates in 2016 as a part of the Consumer Analytics research team. She currently studies market trends and consumer behavior, focused in emerging technology products and services. Today, she’s speaking to us about technological advancements in IoT and how they’re transforming the way consumers interact with their products.
THE CONNECTED LIFESTYLE
How have technological advancements affected the adoption, usage and retention of the smart home?
Technological advancements in IoT continue to improve the connected lifestyle. As a result, adoption of smart home products and services continue to grow. As of Q4 2016, 26% of households reported they had a smart home device. IoT connectivity and intelligence enables consumers to constantly be aware of the world around them. The ability to remotely monitor and check on the status of events in the home leads to higher engagement rates and a stickier consumer.
Advances in technologies such as voice-based assistants and voice-first devices have flattened the user interface and improved the user experience. The way in which it simplifies the user experience by providing a convenient and familiar interface across products helps to increase retention rates among the accompanying smart home ecosystem. The data derived from such interactions are an important facet.
Data analytics serve as a key enabler to improving the user experience. The more long-term promise of smart devices is that they can draw on data analytics and machine learning algorithms to better understand the user’s context, learn consumer patterns and preferences, anticipate consumer needs, incorporate big data analytics across larger ecosystems, and proactively take action on behalf of the user. Companies are constantly looking for new ways to leverage data from connected devices to revolutionize the user experience. TiVo, for instance, allows pay-TV operators to leverage their conversational services to deliver a personalized connected entertainment experience. By utilizing knowledge graphs built on metadata from the consumer’s viewing behavior, it is able to provide true recommendations and anticipate patterns to streamline content discovery.
Recent developments from companies like Google with the Nest camera, and Alarm.com’s acquisition of ObjectVideo, a video analytics provider, illustrate how video analytics can radically change the user experience. A camera that is able to learn faces has the potential to change the way we live by working with smart door locks to automatically unlock/lock doors. Biometric security and data analytics can work together to provide a seamless user experience by minimizing disruptions such as false alarms.
The collection of real-time data across various IoT verticals provide the basis for data-driven applications that can deliver the higher promise of the IoT and connected lifestyle.
What are the three biggest challenges facing the IoT market in 2017? How will these changes influence the industry and how will market players respond?
Low familiarity, solutions lacking clear value propositions to entice consumers, and high upfront costs continue to plague the IoT market. Service providers and device manufacturers must address these barriers in order to grow the industry. The lack of consumer awareness is a great barrier that must be addressed through effective consumer education and appropriate sales channels. Companies are finding unique way to address these issues with new business models, pricing strategies, and distribution channels. Vivint, for instance, launched Flex Pay, a financing option that unbundles hardware costs from service subscriptions. Bundling initial hardware costs with a smart home or security service subscription has served as a primary business model for the industry; by breaking away from the traditional pricing model, Flex Pay offers an option to consumers that alleviates the upfront cost burden by enabling consumers to finance their hardware separate from their service subscription.
Another key move by Vivint that addresses the challenge in low consumer awareness is their recent partnership with Best Buy. Their partnership will bring Vivint’s products and staff to the retailer’s locations nationwide, placing at least one employee from Vivint at each of the participating stores to help inform consumers’ purchasing decisions. Assisted sales at the storefront to educate, inform, and drive the value propositions of smart home devices to the consumer will greatly influence adoption.
Companies like Vivint serve as a role model for innovation. The success and efforts of these companies will help educate consumers on smart home services and devices, which will ultimately expand the consumer IoT segment. If these emerging models prove successful, market players may respond by following suit.
What other industry do you find the most interesting outside of the ones you cover?
Parks Associates covers aspects of artificial intelligence and its impacts on the consumer. However, our coverage has not ventured into analyzing how this technology will impact our future in the way we work, the economy, and the displacements that come with it. Artificial intelligence is seeping into numerous processes and devices to greatly improve operational efficiencies, but where does that leave us? While essential to improving the productivity growth in various sectors, it has the opportunity to displace millions of jobs.
According the American Trucking Association, there were 3.5 million truck drivers employed in 2015. Companies that are exploring AI to fully automate self-driving trucks, like Uber’s Otto, will displace a large sector of blue-collar jobs. The speed at which this technology is improving and learning has significant implications. Advancements in areas where machines are able to surpass humans in fundamentally human areas will be important and interesting to explore in the future.
Don’t forget to check out the first three parts of the series:
- Automakers are Transforming Cars into Third Living Spaces
- Rise of the Smart Kitchen - Voice Control, Re-ordering & More
- Personalization & The Consumer
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