Commentary

Beacons and Smart Homes: It's All About the Value

by Chuck Martin , Staff Writer, December 4, 2015

While technology around The Internet of Things proliferates, consumers seem to be waiting for tangible and practical benefits.

Even though ownership of smart home products increased in the last year, everyone is not rushing out to get the latest connected home gadgetry.

The number of smart home products owned by consumers increased more than 50% over the last year, according to a new study by Parks Associates. Growth is projected to continue, with 43% of U.S. households that have broadband planning to purchase a smart home device in the next 12 months.

But the drivers of those purchases are likely to be practical and priced right.

A different study, by The Demand Institute, found that 88% of consumers see a smart home as being too expensive and only 23% said they had at least one smart device in their home.

Pricing was also the key factor in a McKinsey study, which found that 66% of consumers rate IoT products as too expensive.

But cost is not the only issue. Consumers have to see a perceived benefit.

For example, beacons have been around for around two years and they still are hardly a well-known commodity by consumers.

Even though they’ve been installed in Apple stores for well over a year, many store employees I regularly encounter are not overly familiar with them. Apple store shoppers even less.

Only 7% of UK consumers have even heard of the term beacon, based on a survey of 2,000 consumers by Interactive Media in Retail Group and eDigital Research.

Even worse for marketers is that almost two thirds (62%) said they don’t want companies to be able to locate them even if just walking by a store or through a certain department. About as many (61%) viewed receiving beaconed messages as harassment, and more than half (52%) are not comfortable with the idea of information being used to personalize offers to them.

The good news is that some retailers are starting to use beacons to trigger helpful content rather than intrusive ads, as I wrote about here recently (Beacons Moving Well Beyond the Mobile Ad).

And different beacon uses are being created around the world.

For example, the Real Madrid Football Club is using beacons to target fans who attend their matches with relevant social content, a Chinese beacon company put beacons on 260 high-speed trains and beacons already are in many major retail stores around the U.S.

But it’s not about the smart object for a home or a beacon in a store.

It’s about what value does a consumer receive from the connected technology. And what kind of a deal they can get on it.

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4 comments about "Beacons and Smart Homes: It's All About the Value".

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Chip Pittard from Carat USA, December 4, 2015 at 12:40 p.m.
How are retailers pushing this content? Is it exclusively through their own app, or are their other channels they can push this?
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Cece Forrester from tbd, December 4, 2015 at 1:02 p.m.

"It’s about what value does a consumer receive from the connected technology. And what kind of a deal they can get on it."

Actually, maybe it should be about the permission. Evaluation of the value enters into it. But if you really want to change people's uncomfortable feelings, change their minds about being harassed--try asking permission first, and meaning what you say. That would go a long way to reassuring people that your intent is about helpfulness, if in fact it is, and not some other, hidden agenda. (This is why I always resisted getting those store cards. The ostensible reason "so we can give you a discount" wasn't the real reason. And that left a bad taste the "deal" could not overcome. Plus, tracking individual behavior proved not to be the marketing holy grail, didn't it?)

And by permission, I don't mean sneaky, hidden permission, imputed permission, transferred permission. I mean genuinely asking and explaining. And then accepting the decision, respecting it even if it's not the outcome you wanted. The upside is that for those who do give permission, you've really got permission and all that follows from it.

Chuck Martin from Chuck Martin replied, December 4, 2015 at 2:23 p.m.

They are using their own apps as well as pushing them through third-party apps, Chip.

Chuck Martin from Chuck Martin, December 4, 2015 at 2:26 p.m.

Right, Cece, but in the case of beacons opt-in permissions always are required up front, typically with easy opt-out if not satiffied. Of course, activity around beacons is somewhat different than smart devices in the home, where security also is paramount.