IoT Impacting Consumers Beyond the Smart Home

While the Industrial Internet of Things (IIoT) continues to overshadow consumer IoT both in terms of connected endpoints and revenues generated, the consumer market has continued to grow over the past several years in part due to the popularity of smart home products from companies such as Google (Nest), Vivint (Vivint Smart Home), and Amazon (Echo). This growth is driven from factors ranging from convenience and money savings to security and peace of mind. While there is a growing demand from the consumer market for connected solutions, consumers are more hesitant to purchase and use these devices longer term. For many consumers, the Internet of Things simply does not make enough of a difference in their lives in order to justify purchasing and using these devices. Costs and security concerns remain huge barriers to entry, with the large upfront costs of these devices and systems preventing many users from even experiencing the Internet of Things.

For these types of solutions to catch on in the larger consumer market, consumers need to have encounters with these devices that are both emotionally and rationally driven: consumers need to feel good about using these devices, and it needs to make sense for consumers to use them. As the falling costs of sensors and connectivity solutions are enabling businesses to more cost-effectively deploy wide networks of sensors for both internal and external purposes, this is increasing the number of encounters consumers are having with IoT products and devices outside of traditional consumer channels. As businesses attempt to create differentiated connected offerings, it will enable consumers to encounter and use these devices in non-traditional experiences, increasing the likelihood of them purchasing connected solutions in the future. 

Consumers need a reason to use connected products, and as a result, these connected solutions need to address real pain points. Even if the use cases are simple, if they solve real problems that consumers face every day, it will drive demand for these solutions. Due to the costs involved with manufacturing these devices and solutions, providers previously felt the need to deliver complex systems to consumers. As the costs associated with manufacturing and deploying these solutions continue to decrease, they will be used in everyday situations. In September 2017, Sigfox demonstrated a prototype of a simple wireless module that could be used to send an alert when envelopes and packages were opened. What differentiated Sigfox’s demonstration was that the device was composed of a thin battery, contacts, and module that cost “a few tens of cents.” Sigfox can achieve these low costs due in part to its extensive network and its partnership with GCT Semiconductor, who has developed a firmware update for its LTE-M1 modules that make them compatible with Sigfox’s network. This device gives peace of mind to both enterprises and consumers by solving a common problem by providing a rational, sensible solution. 

While it is important for these devices to appeal rationally to consumers, they also need to have an emotional appeal as well. Since 2011, the band Coldplay has given its audiences connected Xyloband wristbands to create an elevated concert experience. Each wristband has a receiver that is synced to a Radio Frequency (RF) control system which allows the bands to turn on and change colors on cue, creating a light show that immerses the audience. The wristbands integrate many of the elements of experiencing a concert—the audience, music, and light—enhancing the power of the concert experience and leading to positive word of mouth and increased attendance at future shows. Coldplay’s lead singer Chris Martin complained about the cost of using the sensors in 2012, saying that most of the money they were earning on tour was being put into the wristbands. Martin commented that the band had “to figure out how to keep it going without going broke because it’s a crucial part of the concert.” Over the past few years the costs of the wristbands have decreased. Implementing this technology paid off for the band: in 2017, Coldplay surpassed Madonna to have the fifth highest grossing concert tour of all time. 

As the costs associated with creating and operating these connected devices decrease while the capabilities increase, there will be a rise in the instances of these consumer facing IoT experiences. The Xyloband wristbands started off being used exclusively at Coldplay’s concerts, but now they have been used at lower profile events like fundraisers, tournaments, and private events such as weddings and conferences. Many users of these connected devices may not even know they will use the device until moments before they are requested to wear it and may only end up using it for an hour or two. While consumer choice within the IoT market is dictated largely by device ability and longevity, companies have already started to deliver these temporary connected experiences to consumers. These experiences bridge the gap between the consumer and the enterprise, providing IoT touchpoints for consumers. As the costs of these solutions decrease, they will continue to permeate the lives of consumers interacting with the Internet of Things not only at once-in-a-lifetime occurrences as they wave their hands at a concert, but also as they do something as mundane as opening a package that they ordered online. For the consumer IoT market to increase growth, consumers need to gain more familiarity with these devices and solutions, and these devices and solutions need to appeal to consumers’ emotional and rational desires.