Security concerns and unclear value of IoT among US consumers
While Retailers and Hospitality continue to invest in connected devices and sensors – Internet of Things (IoT) – to increase revenues and improve operations, seven of every ten US consumers see a different picture where security concerns and unclear value delivered by those devices are top of mind.
Unless visibility, compliance, security and tangible value related issues are addressed for consumers, the return of their IoT investment looks bleak for these sectors.
Retail and Hospitality companies are adopting IoT at an extremely fast rate. Beacons, for example, devices that retailers use to send notifications and discounts directly to shoppers’ smartphones when they enter a store, are going from 96,000 in 2015 to 3.5 million in 2018, according to Business Intelligence. In Hospitality, 30% of hotels allocated budgets for location-based IoT technology in 2016 to conserve energy and costs.
How does the average consumer of these industries feel about IoT? Are they ready to embrace this new, connected way of life?
Lack of knowledge is a barrier – do not assume that using the term IoT will result in consumer engagement
While enterprises are deploying the internet-connected devices at a faster rate than ever, with over five million “things” connected each and every day of 2016, Optio3 data shows that the average consumer still lacks knowledge in the terminology surrounding IoT.
Four of every five consumers have never heard of the term “IoT” to describe smart or connected technology.
Privacy and security Fears
There may be a lack of knowledge and uncertainty when it comes to IoT, but there is a mass consensus when it comes to cybersecurity. Results from our survey show that consumer security fears are a deterrent when it comes to IoT. Most respondents are concerned with how secure IoT devices are, and that fear has affected their adoption practices. Seven in ten list “security and privacy” as one of their top three barriers to adopting the technology themselves.
The Security Gap
Unfortunately, IoT still heavily relies on users in order to update and secure their own devices. Our survey pinpointed just how big of a security gap this can mean for consumers and their data security.
Nearly half of consumers, stated that they “rarely” or “never” change the password of their smart devices and in most cases it is because they did not know they had the option of doing it!
Hackers try to “guess” passwords using algorithms and repeated attempts. Most passwords can be broken with repeated attempts using software programs. Additionally, users use the same password across multiple accounts/devices. So, breaking the password for one device/account, can then compromise all other devices since the hacker can now use that password across all their devices to gain access.
So why do consumers continue to keep their same passwords, despite the fact that 7 in 10 list security as their top concern? Many, over one-third, of respondents feel that there are just too many connected devices for them to keep track of. With over 20 billion connected things to be in use by 2020, this issue is only poised to become greater and we’re becoming more and more open to cyber attacks with every new device.
Are decreased revenues and customer engagement a consequence for retailers?
Industries such as retail and hospitality should be aware of these concerns when incorporating IoT into their infrastructure, as consumers rate their concern at an 8 of 10 when it comes to using IoT in retail and hospitality. And these concerns affect their adoption practices. When asked how security concerns have impacted the use of their IoT, seven of every ten of consumers responded they are more cautious when using IoT devices.
Fears of data breaches or hacking can even make consumers hesitant to purchase connected devices at all, with more than 1 in 4 deciding to postpone their purchases until they are sure about the security of IoT.
Until Retailers and Hospitality companies are able to show the value of the connected devices to consumers and are able to guarantee that their privacy is safe when staying at that hotel with sophisticated devices or when making that purchase at a retailer or e-retailer, consumers may decide to stop patronizing that business.
Which begs the question, if these enterprises do not even know what connected devices exist in their infrastructure, how can they overcome all of the concerns raised by their consumers?