For smart home adoption to expand beyond the niche segments of technologically sophisticated upscale consumers and technology-focused DIYers, marketers must do a better job of understanding the inherent value the smart home offers. Current marketing approaches are fragmented and focus on individual devices and single use cases. Most companies are wondering which combination of entry points – appliance and home entertainment control, energy management, pet monitoring, property protection, safety and security – make the most sense. But, the mass market is not buying a platform or devices controlled by an algorithm, they are buying an experience. The key to smart home marketing is to view the smart home as a complex dynamic system, an assemblage with new capacities from ongoing interactions among devices and consumers, from which new experiences emerge. Marketers must focus on communicating the value proposition inherent in experience; current approaches may actually be underselling the smart home. We discuss the value of our framework and offer eight actionable insights derived from our research that can guide marketer action in the early stages of adoption and usage of consumer Internet of Things devices that comprise the smart home.
Please join us for an exciting talk by Larry Downes, New York Times Bestselling Author and Internet Industry Analyst, on how the most Internet trends of 2016 are shaking up business as usual and creating new opportunities for disruptors.
How Information Technology Disruption is Transforming Market Economies & Giving Consumers Powerful New Leverage
Tuesday, August 30, 2016
652 Duques Hall
Sponsored by the GWSB Center for the Connected Consumer
About Larry Downes
Larry Downes is a best-selling author on developing business strategies in an age of accelerating technological disruption. He is the co-author, with Paul F. Nunes, of Big Bang Disruption: Strategy in the Age of Devastating Innovation (Portfolio 2014), now a bestseller. Based on extensive research, the book describes a new kind of disruptive innovation and teaches executives across industries how to adjust their strategies to survive it. His previous book, The Laws of Disruption: Harnessing the New Forces that Govern Business and Life in the Digital Age explored the accident-prone intersection of law and innovation. Downes is the author of the New York Times and Business Week bestseller, Unleashing the Killer App: Digital Strategies for Market Dominance, which was named by The Wall Street Journal as one of the five most important books ever published on business and technology. He writes regularly for Forbes, Harvard Business Review, The Washington Post and CNET, and is frequently quoted in media stories in both mainstream and trade outlets. He is currently Project Director at the Georgetown Center for Business and Public Policy and a Research Fellow with the Accenture Institute for High Performance.
Download the Monograph: Hoffman and Novak (2015) Emergent Experience in the IoT
Since the commercialization of the Internet began over twenty years ago, we have been fascinated with the opportunities that computer-mediated environments present for human interaction. As a result, we have spent the last few decades researching the marketing and consumer behavior impact of consumers’ interactions in digital environments.
Now, as the consumer Internet of Things emerges, we find ourselves with renewed excitement as we consider the opportunities for consumer interaction in physical environments with objects that have brought the Internet with them into the real world. Just as the Internet was revolutionary because it enabled many-to-many communication through connected digital networks at unprecedented scale, the IoT is a revolutionary advance that brings the digital into the physical realm. Now, interaction is distributed not just virtually “on the Internet,” but also everywhere in the real world where people actually live, work and play.
What awaits us as we are able to interact with smart objects in our everyday lives, and these objects are able to interact with each other, often autonomously? What are the implications for human interaction and for consumer experience? Will new marketing approaches be required? In the course of thinking about these kinds of questions over the past few years, we realized we needed a new framework to help our thinking jell. We found that framework in assemblage theory. The smart home assemblage serves as the context for our theorizing, but we believe our approach generalizes to any consumer IoT assemblage.
In the monograph linked above, we present an assemblage-theory based conceptual framework and its implications for consumer experience in the smart home. In 8 sections, we discuss the evolution of the Internet and the emergence of the consumer IoT, offer a lay version of assemblage theory, develop our framework and discuss the implications of our framework for research in UX, consumer experience, and marketing strategy. The last two sections offer some early practical insights derived from our theory and some perspective on where things might be going.
Because the pace of change is rapid, we wanted to put this material on the Web as early as possible for comment and feedback. The monograph remains a work in progress. We are developing several papers based on these ideas for submission to academic journals and look forward to hearing from others working in this compelling new area.
Donna Hoffman & Tom Novak
V1.0, August 20, 2015
I got my latest Comcast bill today. A fee increase AGAIN. That makes three (3!) increases since December. My service originally started with Blast, the high speed Internet service. That was $66.99 for my condo in DC. The service is OK, except when it’s not, but there aren’t any real choices, so I’m stuck with Comcast.
This year we decided to add HBO and SHOWTIME and I read about a way to negotiate these premium channels without getting all the channel package they usually try to sell you. (Hat tip to the Wall Street Journal.)
Mission accomplished and my service went up to $82.90 on the January bill, mostly because I had to add basic cable and a cable box to get HBO and Showtime, even though, GET THIS, I shoved the cable box into a closet because I get HBO via HBO GO from Apple TV or Roku or my iPad app and ditto for Showtime through SHOWTIME ANYTIME. I tried to decline the cable box but they said I HAD to have it to get HBO and SHO. OK. So most of the charges were for cable TV I don’t watch and taxes and broacast fees. Sort of OK.
Then, in February my service went up to $86.74, even though I didn’t change anything. Turns out the taxes and other fees went up. Not so OK.
Then, today, my bill shows $97.66. I called Comcast and they told me they had to raise rates for “business purposes,” (I think they mean they need larger profits, but I digress..), and that the rental feel on the modem increased and the taxes and fees went up. Definitely NOT OK.
So, I asked the customer service rep if she’d heard that we’d soon be able to get HBO through Apple TV, but she didn’t seem to know or didn’t care. Game of Thrones, people!
So, as soon as I can dig the cable box out of the closet, I’ll be cancelling everything but Internet and then getting HBO from Apple. I guess I have to give up Showtime for the time being, but since Dexter ended and Masters of Sex is over for now, I’ll just wait to see what happens.
So, once I cancel, my Comcast bill will go down to $51.99, until the price increases start again, but at that point, it’ll make sense to buy my own (better) modem, instead of leasing theirs, since Comcast is making the break-even on owning a modem shorter and shorter with every price increase.
Good luck, cable. We hardly knew ya.
At MSI’s “Immersion” conference on September 19, 2014, I had the chance to talk about consumer interactions in a world where the Internet is no longer confined to the digital realm. Here’s a clip from my presentation.
I’m excited. Tomorrow we head to CES 2015. A lot of the “what to expect” reports are talking about the ultra-HD (i.e. 4k) TVs, the high-res smartphones and phablets, and the drones.
Oh, and the 3D printing space is going to be massive – but really, they need to start printing things besides Hobbits and keychain tchotchkes. And of course, Oculus Rift is promising to show us something even cooler in augmented reality. (Check out my “shocked in the rift” from last year…)
Even so, I think the real news for this year’s show is on the bigger focus underlying the show – it’s all about connecting consumers through their wearables, cars, appliances, and other devices to the Internet ecosystem. The digital is becoming real!
It’s also exciting how large the Eureka Park tech zone is going to be this year – 375 startups this year from all over the world compared to 220 last year – with many focused on Internet of Things ideas.
I can’t wait to see what’s in store.
Tom and I decided to check out the Best Buy Connected Home department after Christmas. We were curious to see what it looked like and whether products were selling. The department we saw was in a prominent location near the front of the store, hard to miss, but we missed it on entry to the store, because it didn’t have large aisle markers.
We roamed around for a while and then went over to the Home Theater department. When I asked the sales associate where to find Connected Home, she told me that it used to be in Home Theater but they moved it because the Home Theater people couldn’t answer any questions having to do with networking!
On our way over to the department, lots of sales associates offered to help us with TVs, appliances, and ultrabooks. Over in Connected Home, it was dead. No one ever came over to see if we needed any help and we never saw any other customers in the department.
The department looks nice. It is organized by themes like “networking,” “wemo this and that,” “home automation,” “nest,” “home connections,” “security and monitoring,” “hue,” and a few others. There was plenty of product still on the shelves,suggesting that most items weren’t fast sellers over the holidays (with the exception of routers,which seemed to be popular because there were hardly any left).
To me, the most interesting thing was the price points. Wow – expensive! Most of the price tags had three digits and although the Hue display was quite snazzy, those double-digit prices for light bulbs and the three-digit price for a “starter kit” have got to cause some sticker shock for most folks.
At this rate, it’s going to take some time for the Internet of Things to go mainstream.