Living the Smart Life: The Evolution of Today's Consumer
The global market for consumer electronics had a six percent increase is sales by the end of the year 2018, according to GfK researchers. GfK predicts growth of around four percent for 2019.
GfK sees potential in smart devices equipped with upmarket features and integrated voice assistants. Quality over quantity is more valued and required by customers.
According to Markus Kick, a GfK expert in consumer electronics, "manufacturers need to stay abreast of the trend towards premium devices and, correspondingly, offer products equipped with upmarket features.
Given increasing saturation rates, sales potential can still be increased here. The factor which will determine success is the intuitive operability of the devices. Even more, consumers quickly lose interest in electronic devices if they are not easy to operate.
The ease of use of different technological components is, then, a decisive purchase criterion."
As the global market for consumer electronics continues to grow, consumers' life gets increasingly smarter. But, what is a smart life? And who are the smart lifers leading a smart life?
To answer these, and other questions, MRI's Karen Ramspacher, SVP, Innovation and Insight, and GfK's Kathy Sheehan, EVP, Consumer Life co-presented "Living the Smart Life: The Evolution of Today's Consumer" at the Consumers Electronics Show 2019 (CES) in Las Vegas.
They shared GfK's latest research and insight on what consumers expect from Smart Life technologies.
Consumer electronics: What is going to drive future growth?
"We know for sure that what is going to drive future growth is going to be very different than what has been driving past growth," said Kathy Sheehan.
Some of the products and categories that have been rock stars in previous years have reached maturity and market saturation, such is the case of the smartphone. In the United States alone, 220 million people have a smartphone. "We're not going to see tremendous growth in the future in terms of smartphones," she said.
Other technologies have recently gained early adopters in a very short period of time, such is the case of the virtual assistants: GfK's research revealed that there is an increase in how people use their voice to ask questions to virtual assistants. This is a particularly noticeable trend with Millennials.
This is mainstreaming globally in both developed and developing economies. In India, online consumers are indexing higher than in the United States in terms of speaking to devices using voice.
"About half of all Americans report that they have at least one smart product or device in their home."
Another area that shows increasing adoption is the smart home. "About half of all Americans report that they have at least one smart product or device in their home." They use the smartphone device or the virtual assistant to communicate with other devices in their home. What people do more is asking questions.
"Voice is everywhere. It's more than entertainment in the living room. It's moving to the kitchen, it's moving to the bedroom, it's inside and outside the house," says Kathy Sheehan.
Simplicity in consumer electronics
There is a trend about rejecting products that are complex or difficult to use. Consumers prefer simplicity when choosing their smart home devices. If a product or technology is not simple to use people lose interest in it. This is a reason why Voice has rapid adoption due to its simplicity.
Digital assistants and smart home features have all been around saving and being energy efficiency. All that is a benefit for the consumer in monetary terms and also in security come to the top, but also what is growing the most is the ability to communicate between appliances, says. There is also a strong adoption in the security space.
Consumers today are interested in optimizing energy usage. They use remote home monitoring to activate and control home appliances that can also communicate with each other. Remote controlling via mobile devices also allows real-time energy tracking.
Auto-mobility study shows what smart tech consumers prefer in their vehicles
"Safety is the number one thing that people look for when looking for an automobile. Anything that's smart and related to smart has been an increasingly important driver in the automotive purchase decisions," said Karen Ramspachen.
There is a great opportunity for in-vehicle digital technology and for personal assistant technology in this space. According to Karen, the smart tech things that rise to the top are:
- Safety systems
- Connected vehicle
Augmented Reality is coming soon to auto-mobility as a way to know what's coming down the road on the dashboard screen before you actually get to it, as well as wellness solutions such as driver's drawsyness detection and air quality in the vehicle, and should have the ability to tell the driver about their blood glucose level should they be diabetic.
"But Gen X is just behind the Gen Y level. It's just the Boomers and the older generations who are keeping the numbers low in the U.S.."
"Of course, safety is paramount," says Karen, "It's also more automated than ever before." Despite safety is more automated, drivers are not ready to give up all control. According to GfK, 9 in 10 Americans trust self over the computer; with 30 percent of automobile intenders telling that they are interested in fully autonomous vehicles (Level 5 of autonomy).
However, "the intention is higher among the younger set," says Karen, as they tend to be more open to technology overall. "But Gen X is just behind the Gen Y level. It's just the Boomers and the older generations who are keeping the numbers low in the U.S.."
Connectivity: Consumers want broadband and Cellular in the vehicle
"The desire that consumers have on connectivity doesn't end when they enter the vehicle. The same things that they want from the home they want in the car so this creates more opportunities," says Karen. "They'd like to have cellular and broadband available in the car as part of their mobile Wi-Fi. And there are a lot of companies that are starting to do that."
"The same things that they want from the home they want in the car so this creates more opportunities.'
For 62 percent of auto, intenders say this would be a very important thing that they would consider as they purchase their next vehicle. The same thing for the smart home devices connecting to the dashboard. "They would like to be able to do things like control the lights in their home, control the security, control the temperature," Karen says.
The research finds that for over 50 percent this is going to be important in their next vehicle purchase and 40 percent are interested in making in-vehicle purchases, like using their car as their mobile wallet.
Health technology: What are consumers doing for their health?
According to GfK research, there is a global focus on preventive health care. Seven out of ten Americans think about their health in terms of prevention rather than treatment. The key driver is "how do I prevent myself from being sick," says Kathy.
"Six out of ten Americans believe that DNA testing and the information that is provided is highly accurate."
"It's about maintaining your physical condition, you're exercising, it's about getting the right nutrients, make sure you're following your diet, it's about watching and monitoring your sleep."
This continuous monitoring and tracking that is aligned with preventive care is the future of healthcare. This leads to more personalized healthcare where people can have their DNA sequenced, for example.
Now, here it comes a little of pushback. "Six out of ten Americans believe that DNA testing and the information that is provided is highly accurate. So, there is trust and confidence in the results. On the other hand, 65 percent say they're very worried about the security and privacy of DNA samples," says Kathy.
It is clear here that the consumer is re-evaluating and re-thinking about these technologies. Basically, "why would you send your saliva into the Internet?"
Shopping, retail, and financial services
According to Kathy Sheehan, the adoption of mobile wallets in the United States is lower than in other places around the world.
The adoption of mobile wallets for sure is going to have an increase, though, according to GfK. "This is one example where the U.S. is really lagging on the trend, so we don't see consumer resistance." As we saw before, 'consumers are thinking about that wallet being other devices such as your automobile."
According to GfK's research results "four out of ten automobile intenders say they would be interested in making in-vehicle purchases that are linked to their bank or their credit card, and close to another four out of ten are interested in voice-activated shopping within the car."
A very small number of Americans believe that cryptocurrencies are secure. According to Kathy, perhaps consumers are confused thinking that the technology is not secure after seeing what happened with all the speculation around Bitcoin. "The opportunity is around the education of the market place," she says.
Who is the smart lifer?
The smart lifer is the one who adopts and lives the smart life, of course. With data collected over the last 30 years, MRI has created a smart lifer profile. A smart lifer is connected.
Karen Ramspacher says that "with all the data sets they are able to see all the media behaviors, all the attitudes, their visual activities, the things they do online and offline, figure out who they are [the smart lifers] are how to reach them."
This commercial brings to life what an extreme version of a smart lifer may look like:
How to define a smart lifer
According to Karen Ramspacher, 83 percent of them have some kind of advanced TV, 62 percent have smart trackers, 58 percent have smart home hubs, 47 percent have smart watches, 38 percent have home security system, 36 percent have smart thermometers, 17 percent have VR headsets, so eight times the American average.
"They are six percent of the American population right now, which is almost 16 million people in the U.S.," says Karen. Their medium age is 40. They are both men and women. They are professionals. They earn high household incomes. They are highly educated.
How to reach the smart lifers
Smart lifers are heavy magazine readers. They read National Geographic, Yoga Journal and Shape, The New York Times, Psychology Today, and the frequent flyer magazines.
They are heavy into the Internet. They do a lot of online shopping. Medium on radio and light on newspapers and television. They are social and active. They like going out. They travel with Airbnb. They like renovating and remodeling their home.
They really invest in what they are watching on TV. They pay for more streaming services than the rest of America. Of course, they are into technology. They are intellectual. They go to clubs. They are museum-goers. They create films and video. They are into photography. They are fit and go to the gym. They vote often. They sign petitions. They are collectors. They can collect watches, stamps, video games, comic books, or antiques.
Karen says the smart lifers are influences. "When they like one brand they stick to it and tell others about them. At the same time, they're also experimental." They often say they are the first among their friends to try new things. They like to connect with brands via social media.
They are also skeptical. They are travelers. They travel three times more than the rest of America. Seventy percent of them said they like to read and research about automobiles before making a vehicle purchase and they tell others about that, says Karen. They appreciate a style that is bold and innovative.
Barriers in product adoption: Security and privacy
"Security and privacy continue to be a barrier in product adoption," says Kathy Sheehan. Consumers globally are not feeling that they have to be connected constantly or available at all times.
Those younger consumers between 18 and 24 are less likely to agree with statements such as "I feel disconnected if I can't get into the Internet" or "it's important to be reachable wherever I am." They don't feel they have to be connected at all times. This is a period of technology re-evaluation.
Trust is something consumers are seeking more. Brands need to take this into consideration at the time of trying to reach consumers.
In his new book, "DIFFERENT: Gender Through the Eyes of a Primatologist", Frans de Waal offers a fascinating study of gender identity among apes.