Complexity, confusion among barriers to connected homes: McKinsey

TORONTO — For there to be wider adoption of Internet of Things (IoT) devices for the connected home, simpler value propositions must be presented to consumers, a conference heard Monday. Marc Thibaut, a consultant with McKinsey & Company, made the statement in a keynote speech about value creation through connected homes at the ISP Summit in Toronto. The presentation was based on a 2016 field survey of 3,000 U.S. households. Thibaut talked about the need for consumers to understand what they are getting out of the devices, and said the industry hasn’t quite reached that point. “It’s only very simple messages and features that resonate today,” Thibaut told the crowded conference hall at the Hilton hotel. “You can see an almost clear trend, except for a few outliers, that the simpler they are, the more they convert,” conversion being the number of people that expressed interest in the device and also own one. Thibaut said his company’s findings are based on consumer questions related to what benefits they look for, what device they would like to use to provide that benefit and what features they would want in the device. He said the number-one benefit was saving money, “which is the simplest one.” Customers look to IoT devices for reasons including security, reducing energy bills and video monitoring, he said. Still, income is “actually the biggest determinant of whether or not a household will have one of these devices, much more than tech adoption,” he said, noting the high cost of these devices. Thibaut said in focus groups with customers looking at why a lot of people look past features of IoT devices, “the word that comes out the most, in any of these discussions, is ‘I’m really confused by this whole connected home and how all this works’.” Part of the reason for that is a lack of experience with the devices, such as customers not being able to try them out in stores. “Retailers right now have not created the spaces to enable them to do that,” he said. For those who do decide to take the plunge, it’s a complex adoption journey, he said. “You should count the number of different stores and outlets that you need to go to connect your home. You’ll buy some things in a big-box store, in a home improvement store, some from cable companies, some online,” he said. “It’s very complicated and getting information how that actually works together and install it is super hard.” As for the ability to make money, Thibaut said the connected home still has some way to go. “The connected home is not today at a state where it has the revenue-generating potential of video or even voice,” he said, though adding that “overall, the entire thing will be big.” — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Complexity, confusion among barriers to connected homes: McKinsey

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Complexity, confusion among barriers to connected homes: McKinsey

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