How important is privacy in smart home adoption?

It may feel like a lifetime ago, but Amazon and Google’s smart home products went head-to-head in Super Bowl ads earlier this year. Amazon’s effort focused on Alexa’s utility, while Google went for a nostalgic, emotive approach instead.

Since February, consumers’ relationship with their home, and with personal data, has seen some changes.

Consumers now spend longer at home than before. Meanwhile, the privacy debate has been reopened amid the rollout of COVID-19 track and trace apps. 

Using data from our core survey, as well as custom research fielded in the UK and U.S. in July, we answer the following:

• What post-COVID changes do marketers of smart home products need to know?
• How do smart home product owners, and potential owners, feel about data-privacy?
• Which devices generate the most concern?

Privacy is not a unique concern – it matters to everyone.

It’s usually younger users described as tech-savvy, however, in the case of smart product owners this applies to all groups.

In fact, 55% of baby boomers in this audience say they’re confident using the latest technology – just four percentage points behind their Gen Z counterparts.

But it’s not confidence with technology that divides them – it’s their views on personal data and privacy. 

Companies garner the most distrust – 36% of all smart product owners say they don’t trust them with their personal data, with boomers at the forefront (47%) and millennials seemingly the most unconcerned (34%).

While Gen Z smart product owners are 19% more likely than others their age to worry about how governments track them online, they’re still more apprehensive of companies’ actions.

Naturally, privacy is a priority to owners of these devices, but they demonstrate the privacy paradox in action – when an individuals’ intentions to protect their privacy doesn’t match their actual behavior online.

Smart home product owners are 10% more likely than average to say they worry about how companies use their personal data online.

And yet, they’re also 29% more likely to say they feel in control of it.

These concerns highlight the importance of honesty. If brands want to reassure smart product consumers, they need to be as upfront as possible.

Over half of smart product owners say brands should be authentic, which means fully informing consumers about the privacy policies and full capabilities of these products – or features that can offer them better control. 

Despite this, however, brands need to remember that privacy is, and always will be, a key priority for smart product consumers. Cybercrime is on the rise, and these individuals are likely to take this into account when considering a purchase.

Privacy is just as important to potential consumers as cost.

Research we conducted in the UK/U.S. in July reveals just how important privacy is. 

In the midst of a global recession, cost is always going to be a concern for big ticket items such as these.

39% of UK and U.S. users intent on purchasing any type of smart home product in the next 12 months, cite cost as a potential downside of these products – the most prominent overall.

But this only narrowly beats out hacking fears (38%), followed by concerns as to how they store their personal information (28%). 

Even among non-intenders, 1 in 5 say they’re worried devices may be hacked or their personal data may be used improperly. 

Potential consumers take these matters seriously and they need clarification – particularly when fears of hacking take center stage.

Across all age groups, hacking concerns rank higher than data misuse – especially among older audiences, with 56% of intenders aged 55-64 citing the former compared to 30% of 16-24’s. 

But these fears are potentially the side effect of the privacy paradox.

Intenders are putting their wants and needs ahead of personal privacy – 28% of intenders want smart devices to securely store their personal information behind 32% who desire device integration.

Connection is important to intenders – in fact, around 1 in 4 say a major downside is that different smart products aren’t compatible with each other.

It’s worth noting also that 73% of smart home product owners across 18 countries are interested in working-from-home permanently, meaning smart devices are only going to get more appealing. 

Brands need to strike an important balance. When building awareness of a product or building a brand, privacy assurances are the most important thing. Further along the purchase journey, however, the promise of integrating devices with one another will certainly be important in smart home adoption.

Device functionality impacts security concerns.

When we break down smart product intenders based on the device they’re interested in purchasing, attitudes to privacy vary.

Energy intenders are most likely to want remote operation, 52% more likely than the average smart home buyer.

We’re beginning to see the effects of increased energy consumption in households, signalling a possible boom for smart utility products as remote working becomes more commonplace.

It’s telling that users are still keen on remote operation, even when many are working from home.

Following closely behind are security intenders, of which 46% cite being able to operate devices remotely as a key motivator for purchasing these products – 47% more likely than average.

While integration features are important to each of these audiences, both are 47% more likely than average to cite security of their personal data as a motivation for buying these products.

In addition, security intenders are around 20% more likely to cite hacking or data breaches as potential downsides.

The broad range of smart security devices on the market – from CCTV doorbells to digital keys – all come with the potential risk of cyber-attacks. It’s understandable then that intenders of these products value their privacy ahead of the average.

There’s little room for a trade-off, brands need to prioritize these consumers when providing information about cyber security and privacy policies.

Entertainment and assistant intenders, however, are the exception – each more concerned with connecting their devices then ensuring security.

This doesn’t mean privacy takes a back seat – 4 in 10 of either audience still consider outsider hacking a threat – but they’re the least motivated by security for their personal information.

Brands should take note of assistant intenders, who – despite debate over smart assistants and their capacity to listen – are over 30% more likely than average to cite remote operation and device integration features as purchase motivators.

Marketing smart products in a pandemic: what to remember

There’ll likely be more twists and turns. But as things currently stand, here’s how brands can tap into the current climate when marketing smart home products:

• Privacy is a mainstay in smart consumer mindsets, so being honest and transparent about various policies and data collection methods is vital. Further along the purchase journey however, convenience and integration will win out. 
• Now that remote working is commonplace, it’s an ideal time to shout about the benefits of energy bill reduction smart devices can provide as we enter winter.
• Even with people spending more time at home, it’s important to remember remote operation still appeals.
• Privacy concerns don’t vary by age, but trust does. Younger audiences may be more trusting of brands and companies, but their older counterparts will need more information.