The last decade has been all about trust and mistrust. We saw some significant data hacks that damaged consumer trust of some of the world’s largest companies and trust in our institutions has been eroded and caused significant damage. On the other hand, we have learnt to trust companies enough to give them our data without question.
Trust is the primary currency in any transaction, whether that’s buying a car from a used car salesman or even just lending somebody a DVD. Without trust in the other party or in the transactional system, people will simply not take part. According to a 2014 Concerto Marketing Group and Research Now survey, 83% of customers will recommend a trusted company to others and 82% will continue to use that brand frequently. However, trust today is about more than doing well by your customers, it is as much about branding and appearing trustworthy, especially when it comes to e-commerce. After all, if your site hasn’t been updated since 2005 you aren’t likely to come across as trustworthy - even spelling mistakes can cut the number of transactions by 50%.
This helps to explain why, despite big success in many business sectors, the IoT is yet to really have a huge impact on the consumer market.
A lack of trust may simply be due to a lack of understanding and some fairly bad PR early on in its development.
One of the biggest PR disasters was the DDoS attack on October 12 which saw the Dyn servers attacked, bringing down some of the biggest web giants like Twitter, PayPal and Reddit. This would normally have been a bit frustrating, but unlikely to make much news given that it was a non-intrusive attack, except that a major part of the attack came from connected devices that had been hijacked.
The analysis of this event then showed that it was due to a lack of security on these devices that allowed people to hack them relatively easily. This causes some huge issues for people as many see the benefits of having connected devices in their homes, but few would want to do so in the knowledge that they may not be secure. After all, if you had a connected baby monitor, you would not want even the hint of a possibility that somebody else could hack in and hear your child sleeping.
In terms of branding, IoT connected devices are not advertised in the same way as other electronics devices, with few big marketing campaigns like you would get with other appliances. For instance, you are unlikely to see Philips advertising their Hue lighting kits over their best selling shaver or electric toothbrush. There is also a difficulty in knowing who to sell to. After all, there is little in terms of specific demographics who would be interested in this new tech compared to others. This makes it hard to target a specific group or even a specific medium.
Most IoT devices also replace something that has been around for a long time, like refrigerators, light bulbs or power sockets. These are all elements that have worked perfectly well for people for decades and will therefore need to go above an beyond to be replaced. At present, given that there isn’t a huge amount of trust in connected devices and they cost considerably more with the Philips Hue bulb having an RRP 200% more than a regular Philips bulb. This makes a more sustained growth in consumer markets difficult, given that the merits are unclear to most and the costs are considerably higher.