4th wave consumer summary

8/12/2019 4th Wave Consumer Summary

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4th Wave Consumer Study

October

2013


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2 2013 The Sprosty Network

4th wave early adopter and tech savvy consumer surveys

Over the past two years, the customer experience and expectation in connectivity has been revolutionized. The George Jetson era has

arrived, as consumers expect instant access as a way of life and we see products becoming automated, connected and hopefully, simpler.

The mobile phone has become the remote control for our lives and everything from door locks, to thermostats, to home surveillance, to

garage door openers, to wallets, and even health care innovations are now becoming matter-of-fact solutions.

The Fourth Wave of innovation has clearly become the talk of the tech industry, with new innovations in connectivity hitting the market

from every direction as new players emerge. With the emergence of players in Connected Home, M-Health, Mobile Enablers and

Connected Car, the consumer is now starting to embrace connectivity and adopt numerous Fourth Wave solutions. We have seen

accelerating adoption of point to point solutions, as well as scaling of WAN connected tablets (72% of postpaid gross adds with ATT).

The Sprosty Network leaders have been working where disruptive connectivity meets the customer experience in the Fourth Wave arena

for years, so we are collaborating with Chetan Sharma Consulting to ask early adopters if they are ready for the next wave of solutions.

We asked them what products they are likely to buy, how happy are they with the operators, the OSs, and the shopping experience?

What do they see as the top stories? How did the predictions of our industry experts measure up against tech-savvy early adopters?This study with early adopters enables better understand their level of interest in the new products on the horizon to connect their lives.

Quantitative surveys of mobile technology early adopters The methodology for defining for the survey participants as Tech Savvys:

Ages 25 to 54 with at least $50K income with a mix of male and female. All respondents completed 3-question battery to ascertain

early adopter status. 410 respondents attempted battery, 240 completed (59% completion rate) and participated in survey. Very Early and EarlyAdopters (Tech and Early Adopters who purchase technology prior to the curve with high ownership of numerous connected devices (Participants averaged

4 connected products each) 64% rated as very advanced mobile user and 22% rated as advanced mobile user and over 80% were tablet owners

We broke down the fourth wave into Connected Home, Connected Health and Wellness, Connected Car product domains for comparisonand asked participants to rate their likeliness to buy if the pricing was right. The results were surprising!

For further inquiries, email [email protected] or you can reach Dave directly at [email protected]
mailto:[email protected]:[email protected]


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Summary Findings

PRIVACY BACKLASH AND TRUST: Even with the advances in convenience with solutions such as Google Now, even early adopters

have growing concerns regarding privacy and the backlash. They see this as the top story in mobile for the year on survey 1 and in

survey 2, nearly 50% of the group disagreed or disagreed very much that the value equation, or trade off of data privacy was worth

the value of offers for better managing their life. We also found that 70% of consumers disagreed very much or somewhat that thecarriers are looking out after their best interest.

FOURTH WAVE SOLUTION INTEREST: There is encouraging interest in all solution domains of the fourth wave, with Connected Home

leading the pack. We introduced Completely Connected to the participants as the ability to have instant access to digital information

about the most important things you have in your home and your day to day living. This includes knowing about: Power failures, water

heater function, natural gas issues, household appliances, lights, consumer electronics, doors and windows, inside temperature, and

when your children return from school. You would personalize how you monitor these things by using your smart phone or tablet.

Connected Home had strong interest in all four solution sets which included Automated Home (Connected wireless home services

monitoring thermostat, lights (on/off), and locks (locked/open), Home Security and Surveillance (easy monitoring of windows/doors

managed from your mobile phone or other devices, Home Energy Management/Safety (Home energy function efficiency detection

(e.g., power outages, plumbing leaks, HVAC, etc. and Ubiquitous Home Content (the ability to move content from device to tablet, to

TV easily) +65% of tech savvys are likely or very likely to purchase a connected home product on average.

In Connected Health and Wellness, which includes solutions like Aging in Place, (Products that wirelessly monitor your parent's medical

status so they can stay in their home longer as they age), In Home Health Monitoring (Product that monitors your recovery progressfrom home by using mobile technology, allowing you to stay home when you are sick rather than take a trip to the hospital/doctor and

connected and wearable fitness, (Application that collects solution that collects your current and past workout information from you

home exercise equipment) Average interest was in the 50% range, which was surprising for such new value propositions that

are not clearly understood by the market

Connected Car had the top scoring individual value proposition, with over 70% interested and 34% very interested in auto

diagnostics. Broken down individually, there are also good signs for the future with car Wi-Fi and satellite radio.


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Summary Findings

SHOPPING EXPERIENCE FOR CONNECTED PRODUCTS: When we think about retail, it is on two fronts, Brick and Mortar and

Web/Mobile Commerce. Where will the consumer prefer to purchase, how to they feel about the current complex sale in mobile, and

what is their take on m-commerce and mobile at point of sale?

First, where do customers prefer to purchase these fourth wave complex solutions? Bricks and Mortar is the optimal channel. Even

with Tech Savvys, the preferred channel across domains was bricks and mortar stores over web sites. The Bricks and Mortar channel

winners were different by domain, however.

Connected Home bricks and mortar preference was over 65% on average. The need for consultative interaction may have driven

the lead in preference in full line stores with installation, such as Sears and CE stores like Best Buy, followed by home improvement

stores like Home Depot and Lowes.

Connected Health and Wellness had the biggest anomaly, where the where the split of web vs. Bricks and Mortar moved closer to

50% and Direct from Manufacturer was the top alternative in bricks and mortar.

Connected Car. Full line stores took the top spot for bricks and mortar and usage based insurance was the only product where the web

exceeded bricks and mortar for preferred channel.

Sub-Par Experience: Consumers do not like the experience they are getting at point of sale. How do customers prefer to interact withthe complex product at point of sale? Customers still dont really enjoy the process of purchasing a mobile phone, validated by the

point that over 50% of them disagreed or strongly disagreed that purchasing a mobile was a reasonably enjoyable experience. It is

interesting that even tech savvys valued service as the #1 consideration even over price in the process of purchasing a complex mobile

product that includes service in the selling process. Tablets which are a simpler transection, were the inverse.

NPS and Satisfaction: The level of satisfaction with carriers versus OEMs is surprising. While Samsung beat Apple by 110bps in

satisfaction and by 30 bps in willingness to recommend, the real surprise was seeing their top box scores nearly double the operators.


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Our top ten findings

1. Privacy is the new hot button with consumers, likely due to recent publicity

2. The early adopter is ready to open their wallets for new Connected products

3. Auto Diagnostics was the top likely to purchase Connected value prop

4. Bricks and Mortar is the top channel for procurement of Connected Home

5. The value equation for usage based insurance is still not enough to drive scale

6. Tech Savvys value service even over price in complex transactions like mobile

7. Even with the plethora of new innovation in phones, battery life still rules!

8. There are Apple lovers and a sizable segment of Apple dislikers

9. The early adopters have trouble trusting the operators

10. Our price elasticity research (not shown) validates that people are willing to

pay for connecting their life, but tech savvys do not yet understand the value

equation of disruptive products like Google Glass enough to drive scale.


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Privacy: use of mobile big data not a given

32%

25%

22%

23%

23%

20%

19%

25%

4%

7%

0% 10% 20% 30% 40% 50%

I am fine with the fact that techcompanies, retailers, and service

providers can have ways of using datato find out my current circumstances and

make offers for these circumstancesbased upon my recent purchases.

I dont mind that by knowing where I amnow, where I tend to go, and myupcoming calendar events; tech

companies, retailers, etc. can tell me Imay need to leave to leave early andoffer best route to take based upon

traffic conditions, make recommendatio Agree very much

Agree somewhatNeither disagree nor agree

Disagree Somewhat

Disagree Very Much

Will value propositions like Google Now overcome this growing concern?


7/197 2013 The Sprosty Network

4th Wave Solutions intent to buy scored well with early

adopters. Connected Home leading the pack.

Automated

Home

Home Security

& Surveillance

Home energy

Safety/Cost

Wellness

Aging In Place

M Health,

Monitoring

Wellness &

Fitness

Auto

Diagnostics

Usage based

Insurance

Ubiquitous

Content



An aggregate of bricks and mortar was surprisingly the top

connected channel. Website fared well in health and UBI

Automated

Home

Home Security

& Surveillance

Home energy

Safety/Cost

Wellness

Aging In Place

M Health,

Monitoring

Wellness &

Fitness

Auto

Diagnostics

Usage based

InsuranceUbiquitous

Home Content



Consumers continue to dislike the process of subscribing,

confirmed by the rare demand for service over price

Mobile Phone Retailer Tablet Retailer

Gaps in the activation and contract approaches could be driving the significant delta

between tablets (price) and phones (service)

Question Disagree

very much

Disagree

somewhat

Agree very

much

Procuring a phone is reasonably

enjoyable/fun experience

22% 34% 4%



70% disagreed very much or somewhat that the operators are looking out after

their best interest.

Consumers were tough on the carriers

Question Disagreevery much

Disagreesomewhat

Neither agreenor disagree

Agreesomewhat

Agree verymuch

I believe that mobile phone

carriers are looking out for

my best interest

36% 34% 20% 8% 1%



Tech savvys are not sitting on the fence with Apple; its

either love or hate relationship

Question Disagree

very much

Disagree

somewhat

Neither

agree nor

disagree

Agree

somewhat

Agree very

much

I love Apple products 13% 9% 16% 30% 32%

I love Microsoft products 6% 13% 31% 35% 15%

I love Android system

products

4% 9% 35% 33% 19%

as Apple clearly bests Android and Microsoft

on the love, but doubles them on dislike



Most desired phone improvements. Battery life still rules

Even with all of the advances in applications and features over the

years, increasing battery life was most chosen improvement acrossall OEMs Speed of data was a distant second



Willingness to purchase Google Glass lines up differently than

wearables as a whole, which made the top 5 in study #2

11%16%

34%

4%

2%

8%

$499 $249 $99

Somewhat Likely Very Likely

Interest in shelling out $ Google Glass was low-moderate.

Willing to purchase was 42% Top 2-box (8% Top Box) at $99

Hypothesis: This is consistent with our other price elasticity studies, as it typically occurs

with products prior to launch. The lack of a clearly defined value proposition makes it

difficult to drive a mutually beneficial exchange of value in the eyes of the unaware

consumer. Seeing and touching this product may be essential.

While consistently

low, we saw only a

30bp difference

when halving the

price from $499 to

$259


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2013 The Sprosty Network

Fun Facts Perceived category with most spend 2013

The perception amongst tech savvys is that they are spending more

on apps than messaging or voice.


15/1915


Fun Facts: Percentage of paid for apps for phone & tablet

Mobile Phone Tablet

Predictably, customers have a mindset for free apps versus paid on

tablets. They are more likely to pay for smartphone apps.


16/1916


We thrive in the connected world and continually revolutionize how retailers and tech

companies execute connected consumer solutions at all industry levels

The Sprosty Network: Building connectivity businesses

We build connectivity businesses all the way to execution and run them. As operators,

we know what works, what doesnt and have the relationships to accelerate scale.

We are known for disrupting status quo by relentlessly focusing on the consumer

POVand iterating quickly. Our hands-on approach to commercialization and

go-to-market gets to the money faster.

Specialized

Interim Talent

Why do we

exist?

How do we

do it?

Why were

different

Our

Services

Customer

Experience

Transformation

Product

Development &

SolutionsCommercialization

Industry Retail

Focus

Go To Market &

Distribution

Private Label

Value Proposition

Solution Development

Business Requirements

Product Roadmap

Sourcing Strategy,

Incubation

Customer Needs

Integrated Solutions

Experience Design

Retail Op Model

Connected Assortment

Assortment & Solutions

IT Integration

Brand Positioning

Channel Benchmarks

Channel Management

Ecosystem Positioning

Strategic Partnerships

Business Model

Market Positioning

CTIA

LMS & Training Platform

Industry Certification

Train the trainer

Industry Customer Focus

C Level

Officer Level

Two in a box on-the-job learning

Vendor Partnerships


17/1917


Service Delivery

Environment

Platforms

Fulfillment

Call Center / Chat

Retail Footprint

Truck Rolls

M-Health

Carrier

MSO

Solution

Applications

e and m commerce

Telematics

Security

Home Monitoring

Energy Mgt.

Channel

Customer

Experience

We are known for using customer data and employee insights to

simplify the connected solution value chain


18/1918


Our Services build connectivity businesses

Services based on customer needs

Product Development&

SolutionsCommercialization

Customer Experience

Transformation

Go to MarketDistribution

Industry RetailLeadership

Specialized InterimTalent

We are operators who take your business all the way beyond execution to run the business. Our

strength lies in our ability to execute on behalf of our clients to improve chances of faster scale

Product Development & Solutions Commercialization: Weidentify gaps in consumer assortments and design value propositions, then buildconnected products, bundles and solutions together with partners, including PrivateLabel.

Customer Experience Transformation: We see around the cornerto transform and forklift in new integrated customer experiences. Leveragingcustomer data and insights, we design customer value propositions, assortmentsand optimal operating models and can continually manage the business to successor turn it over.

Go to Market and Distribution: We identify the best of breedservice providers and solutions companies to design product and servicespipelines. We create complementary assortments for profitable scaling acrossmultiple channels and can run those channels their behalf.

Industry Retail Leadership: We partner with CTIA, and many other keyplayers to assure that the Retail customer experience is always a consideration bygathering insights and building industry ordained Retail capabilities and training.

Specialized Interim Talent: We provide specialized wireless andmobile talent from manager to C level on an interim basis for companies thatneed help building a new business in the connected world


19/1919


Thanks to John Tidwell

PhD in Psychometrics from University of Delaware

Co-author of five publications in consumer behavior

Over 20 years of experience in Market and Social research

International mobile market research experience in Argentina, Brazil, Canada, China,

Germany, Mexico, Peru, United Kingdom

Over ten years experience in Mobile market research

Seven years Director of Consumer Market Research at Nextel & Sprint

Other experience in Financial Services and Manufacturing

Adjunct professor in Statistics at Shenandoah University

Masters degree in Public Policy from University of Delaware

4th wave consumer summary

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