How to Market the Consumer IoT: Focus on Experience

© Hoffman and Novak 2016 | http://postsocial.gwu.edu

› The Evolution of Interactivity

› A New Framework for Conceptualizing Emergent Experience in the Consumer IoT

› Research Priorities for Marketing in the Consumer IoT

› Five Important Managerial Insights

› Discussion

Outline

2

http://postsocial.gwu.edu


The Evolution of Interactivity

3



From the Internet to IoT

4



Why Now? The 7 Technology Laws

5



The IoT introduces new types of interactions between consumers and devices.

These interactions create a whole that is more than the sum of the parts – a set of recurrent “assemblages” (Hoffman and Novak 2015).

Just as the web needed new frameworks for understanding consumer experience (Hoffman and Novak 1996), the IoT will need new frameworks to understand the consumer experience that emerges from these interactions.

Interactivity is Evolving and New Consumer Experiences are Emerging

6


© Hoffman and Novak 2016 | http://postsocial.gwu.edu 7

The Consumer Internet of Things (IoT)

The wide range of everyday objects and products in the real world that are enhanced with programmable sensors and actuators that communicate with other devices and consumers through the Internet -- (Hoffman and Novak 2016)



Everyday Objects in the Consumer IoT

Connected audio and media streaming (Amazon Echo, Apple TV, Amazon Fire, Roku)

Connected smart TVs (e.g. Samsung)

Wearables (Apple Watch, Fitbit)

Thermostats and smoke detectors (Nest, Honeywell Lyric)

Lights, switches and receptacles (Philips Hue, Belkin Wemo, Insteon, GE Wave)

Locks and door openers (Chamberlain MyQ, Kwikset Kevo, Schlage, Lockitron)

Air conditioners (Quirky+GE Aros)

Large home appliances (LG ThinQ, Samsung, Bosch Home Connect)

Small home appliances (Belkin Crock-Pot, Withings Pulse Smart Scale)

Hubs (Iris, Insteon, Smart Things)

Pet monitoring (WÜF, Whistle, Garmin Astra)

Food monitoring (Quirky Egg Minder)

Baby monitoring (Mimo Baby Onesie, Owlet Smart Sock Baby Monitor, Safe to Sleep Breathing Monitor Mat)

Gaming (Razer Smart Band)

Water monitoring (WallyHome), humidity monitoring (Leviton)

Cameras (Dropcam, GoPro, Arlo) Mattresses (Sleep Number C2)

Clothing (e.g. Athos, UnderArmour, Microsoft)

Storage (Makespace)

Cars (Uber, Dash, Audi, Mercedes)

8



The Internet of Things is Going to Be Huge

250 Million Connected Cars by

2020 (Gartner)

$3 Trillion opportunity by 2025 (Machina Research)

“100% IoT” by 2020 (CES)

27 billion devices (Machina Research)

by 2025

Intel and Qualcomm are most active IoT startup

investors - sensors and

wearables (CB Insights)

9



A lot of hype, but so far not a lot of adoption

Current adoption rates are low:

▪ 16% own one device and 4% own two or more (Gartner)

▪ 6% use smart home tech (Nielsen)

▪ 4% own one device (Acquity)

▪ Only 30% are expected to buy a smart thermostat in the next five years (Acquity)

▪ Much lower rates of adoption for other smart home devices.

But the Smart Home Has an Adoption Problem

Data from 2016 Accenture Digital Consumer Survey

Products

2016 Purchase

Intent Rate

Change in Rate Since

2015

Smartwatch 13% 1%

Fitness Monitor 13% 1%

Smart Home Cameras 11% 1%

Smart Home Thermostats 9% 0%

Personal Drones 7% 1%

10



While price and privacy/security concerns are barriers to mass market adoption, the bigger issue is value.

Marketers’ current focus is on individual products (thermostat, light bulb, refrigerator) and specific “use cases” (turn on the lights when I get home).

But value is created in the experiences that emerge from interaction.

To examine this, we need a new framework...

Cracking the Value Code

11



Assemblage Theory Framework to Conceptualize Experience in the Consumer IoT

12



Assemblage Theory

Consumer Experience (CX)

We Draw on Two Literatures



Assemblage theory is a non-human-centric comprehensive theory of social complexity from the neo-realist school of philosophy which explains the processes by which the identity of a whole, a whole that is more than the sum of its parts, emerges from the ongoing interaction among its heterogeneous parts (e.g. DeLanda 2002, 2006, 2011, 2016; Deleuze and Guattari 1987, Harman 2008, Hoffman and Novak 2015, 2016).

Assemblage Theory



In the past few years, concepts from assemblage theory have been applied to an increasingly broad range of consumption, consumer behavior and marketing topics:

› Dissipation of a brand’s audience (Parmentier and Fischer 2015)

› Outsourced family caregiving (Epp and Velageleti 2014)

› Long-distance family practices (Epp, Schau and Price 2014)

› Consumption experiences (Canniford and Shankar 2013)

› Heterogeneous consumption communities (Thomas, Price and Schau 2013)

› Consumption-driven market emergence (Martin and Shouten 2014)

› Doppelganger brand images (Geisler 2012)

› Consumer Culture (Canniford and Bajde’s 2016) recent edited book

Assemblage Theory in Consumer Research



Many heterogeneous components interact in the smart home

› People: consumer, visitors, delivery people, burglars› Smart devices: phones, hubs, locks, lights, thermostats › Home infrastructure: layout, rooms, furniture, power outlets, pipes› Environment: interior and exterior climate› Animals: pets

Assemblages emerge from habitual repetition of interaction among heterogeneous components.

› We especially are interested in both 1) interaction of people with smart devices and 2) interaction of smart devices with each other.

› The smart home has many overlapping and nested assemblages that can have different spatial and temporal scales.

Interactions in the Smart Home Produce Assemblages



Interaction Events are Fundamental Building Blocks



Assemblages, such as the smart home, are new entities that are “more than” the interacting components that form them.

The smart home assemblage’s identity has three aspects:

1. Emergent properties - measurable characteristics that specify what the smart home assemblage is.

2. Emergent capacities - specify what the smart home assemblage does or what can be done to it.

3. Emergent expressive roles - the function and meaning of the smart home’s components as they interact in the context of the assemblage.

Emergent Identity of the Smart Home Assemblage



Example of a Smart Home Assemblage

Consumer interacts with 6 smart devices.

Smart devices interact with each other.

The interactions create the smart home assemblage.



Smart Home Micro-Assemblage: Lighting

Lighting micro-assemblage

Emerges from interactions among Consumer, Alexa, Hue Hub, Hue Lights

Control lighting through Alexa voice control and automated rules.



Smart Home Micro-Assemblage: Ecobee

Ecobee micro-assemblage

Emerges from interactions among Consumer, Alexa, Ecobee sensors, Ecobee thermostat

Control Ecobee thermostat through Alexa voice control and motion sensor



Smart Home Micro-Assemblage: IFTTT

IFTTT micro-assemblage

Emerges from interactions among Consumer, IFTTT, Hue Hub, Ecobee thermostat

If the home’s temperature is less than 65, then turn the lights blue.



The vast literature on Consumer Experience (CX) reaches consensus on two key points:

1. CX always stems from an interaction (DeKeyser et al. 2015). Interaction is a prerequisite building block from which experience originates (Prahalad and Ramaswamy 2004).

2. CX emerges from interaction and is distinct from and something more than the products and other components with which consumers interact (Abbott 1955; Alderson 1957; Lemon and Verhoef 2016; Pine and Gilmore 1998).

This implies that CX is an assemblage.

Consumer Experience Also Emerges From Interaction



CX Assemblage Emerges from Consumer-Centric Interactions




consumer-centric interaction

many other interactions don’t involve the consumer



CX Assemblage Emerges From Consumer-Centric Interactions



CX that emerges from interaction is both holistic (Verhoef et. al 2009) as well as multidimensional. While the specific dimensions vary by researcher, five key dimensions are consistently mentioned:

Behavioral (or physical)

Affective (feelings, emotional, experiential or hedonic)

Sensory (or sensations)

Intellectual (cognitive or rational)

Social

see: Brakus, Schmitt and Zarantonello 2009, De Keyser et al. 2015, Gentile et al. 2007, Holbrook and Hirschman 1982, Klaus and Maklan 2012, Lemon and Verhoef 2016, McCarthy and Wright 2004, Schmitt 1999, 2003, Verhoef et al 2009, Verleye 2015

Consumer Experience Measurement in Marketing



Extension Experience› Self-extension literature (Belk 1988, 2013, 2014)› “Individuals cathect objects with meaning and extend their identities into

objects and other people” (Belk 1988)

Transfer aspects of the consumer’s identity into the smart home assemblage’s identity.

Expansion Experience› Self-expansion literature (Aron et al. 1991, 1992, 2004; Riemann & Aron 2009)› “Individuals treat a close other’s resources, perspectives, and identities as if

they were their own” (Aron et al. 1992)

Incorporate aspects of the smart home assemblage’s identity into the consumer’s identity.

We View Consumer Experience As Having Two Facets



Assemblage Theory View of Consumer Experience

Self-Extension Experience Self-Expansion Experience

Emergent Properties of the CX Assemblage

Measures of how the consumer affects the assemblage.

BASIS: Behavioral, Affective, Sensory, Intellectual, Social.

AAA: Agency, Autonomy, Authority

Measures of how the consumer is affected by the assemblage.



Emergent Capacities of the CX Assemblage

Things the consumer can do, or have done to them, that transfer consumer identity into assemblage.

Things the consumer can do, or have done to them, that absorb assemblage identity into the consumer.

Emergent Expressive Roles of components.

Agentic role of the consumer in specific interactions in the context of the CX assemblage.

Communal role of the consumer in specific interactions in the context of the CX assemblage.



Traditional CX is Limited to Expansion Properties

Self-Extension Experience Self-Expansion Experience

Emergent Properties of the CX Assemblage

Measures of how the consumer affects the assemblage.



Measures of how the consumer is affected by the assemblage.



Emergent Capacities of the CX Assemblage

Things the consumer can do, or have done to them, that transfer consumer identity into assemblage.

Things the consumer can do, or have done to them, that absorb assemblage identity into the consumer.

Emergent Expressive Roles of components.

Agentic role of the consumer in specific interactions in the context of the CX assemblage.

Communal role of the consumer in specific interactions in the context of the CX assemblage.



Extension vs. Expansion CX: LG Rolling Bot

https://www.youtube.com/watch?v=oxoRURIuE_8






Self-Extension CX

› The consumer plays an agentic expressive role in their interactions with the Rolling Bot.

› Consumer exercises capacities related to self, but in a way they can’t do without the assemblage.

› Interaction serves to inject the consumer’s previously developed capacities for monitoring into what the assemblage can do, thus extending the range of the person’s own eyes and ears into the assemblage.

Extension vs. Expansion CX: LG Rolling Bot

Self-Expansion CX

› The consumer plays a communal expressive role in their interactions with the Rolling Bot.

› Consumer exercises capacities that can only be exercised by being part of the assemblage, but feels these capacities are their own.

› What the assemblage can do is incorporated into the consumer, expanding their ability to care for and enjoy their pet, even when away. The consumer becomes more by being able to do, from a distance, what the Rolling Bot does.



Dynamic Processes and Assemblage Change

34

Assemblages are dynamic and in constant change. Three key processes help us understand how consumer experience assemblages form and change over time.

1. Habitual repetition with difference

2. Experience formation processes

3. Experience consolidation processes



What is important for CX to emerge is not mechanical cookie-cutter repetition, but repetition combined with difference (e.g. Deleuze and Guattari 1987, Price and Epp 2016).

Tom says “Alexa, turn on the lights.”Donna says, “Alexa, turn the lights on.”Tom & Donna experiment with different wording.Alexa sometimes doesn’t understand what we say.We shout to Alexa from another room.We whisper to Alexa in the same room.Alexa’s light ring provides ambient interaction.We add a motion sensor to turn on the lights without Alexa.We write IFTTT recipes for Alexa to change light scenes.

Repetition shouldn’t be repetitious.

1) Habitual Repetition With Difference



Through repetition, consumer experience evolves over time (Neslin et al. 2006; Verhoef et al. 2009) as part of the customer journey (Payne et al. 2008; Klaus and Maklan 2012; Lemon and Verhoef 2016).

During this journey, territorialization processes stabilize CX, while deterritorialization processes destabilize CX (DeLanda 2006, 2016).

Territorialization processes 1) sharpen the spatial, physical boundaries of the CX assemblage, 2) its temporal boundaries, and 3) its internal homogeneity. (Deterritorialization does the opposite.)

Does the dynamic balance of territorialization vs. deterritorialization, over time, define an “optimal experience channel” for CX, similar to flow?

2) Territorialization and Deterritorialization of CX



Subsequent recurrent processes of coding and recoding reinforce territorialization effects, consolidating and fixing the identity of the CX assemblage, allowing a territorialized identity to be, in effect, locked in (e.g DeLanda (2006, 2011, 2016). (Decoding, in turn, reinforces effects of deterritorialization.)

The need and ability to literally program smart devices leads to a strong role for coding in consumer IoT environments (Rowland, et. al. 2015).

Coding in the IoT is bottom-up, with individual consumers independently inventing and programming their own variations of if-then rules. This happens with IFTTT users.

3) Coding and Decoding of CX



IFTTT Hue Recipes Most Often Coded by Users

Count Trigger Channel Trigger Action Channel Action

219 Weather Sunset Philips Hue Turn on lights

210 Amazon Alexa Say a specific phrase Philips Hue Change color

143 Date & Time Every day at Philips Hue Turn off lights

140 ESPN New in-game update Philips Hue Blink lights

114 Date & Time Every day at Philips Hue Turn on lights

109 Weather Current condition changes to

Philips Hue Change color

72 ESPN New game start Philips Hue Change color

65 ESPN New in-game update Philips Hue Change color

61 iOS Location You enter an area Philips Hue Turn on lights

57 Weather Sunrise Philips Hue Turn off lights



Research Priorities for Marketing in the Consumer IoT

39



› CX Measurement

› Object Experience through Anthropomorphism

› Consumer-Object Relationship Journeys

› “Object Consumers”

Four Research Priorities for the Consumer IoT



CX Measurement



How valid are current scales? A sample of 102 Mturk workers were asked to evaluate their smartphone on a series of 3 measures of Self-Expansion and 6 measures of Self-Extension.

Self-Expansion measures› IOS: Inclusion of Other in the Self (Aron, Aron & Smollan 1992), 1 item› SEQ: Self-Expansion Questionnaire (Lewandowski & Aron 2002), 14 items› PSE: Potential for Self-Expansion (Lewandowski & Ackerman 2006), 5 items

Self-Extension measures› My smartphone symbolizes me (Kiesler & Kiesler 2004), 1 item› Smartphone as a representation of you (Belk 2008), 1 item› PIES: Possession Incorporation in the Extended Self (Sivadas & Machleit 1994), 6 items› SET: Self-Extension Tendency (Ferraro, Escales & Bettman 2011), 8 items› SES: Self-Extension Scale (Schifferstein & Zwartkruis-Pelgrim 2008), 8 items› IES: Incorporation into the Extended Self (Dodson 1996), 17 items

Current Measurement of Self-Expansion and Extension



Correlations Among Self-Expansion and Extension Suggest the Two Constructs are not Clearly Distinguished

Only 1 eigenvalue > 1; explains 71% of variance



Object Experience Through Anthropomorphism



Smart objects have meaning on their own - just like consumers...

...something more than passive entities that consumers invest with meaning (Belk 1988).

Consistent with the OOO perspective emerging in CB research (Canniford and Bajde 2016; Giesler and Fischer 2017)

Smart Objects Have Their Own Ontology



Agency describes the ability to act, autonomy the ability to act independently and authority how smart objects affect and are affected by other entities in interaction.

› Smart objects have agency to the extent that they possess the ability for (inter)action (Franklin and Graesser 1996; Latour 2005), having the ability to affect and be affected.

› Autonomous objects can function independently without human intervention (Parasuraman and Riley 1997 and independently interact with other entities, serving their own agendas (Franklin and Graesser 1996; Luck and d’Inverno 1995).

› Smart objects possess authority when they can implement communication and decision-making with other smart objects and with humans (Hansen, Pigozzi, and van der Torre 2007).

The 3As Properties of Smart Objects



The Ecobee Has Agency, Autonomy and Authority



Object Experience (OX) Emerges From Object-Centric Interactions



OX is Accessed Through Anthropomorphism



Anthropomorphism (Epley, Waytz and Cacioppo 2007) is the mechanism that can bridge the gap between consumer and object experience.

Consumers have a tendency to anthropomorphize brands (Aggarwal and McGill 2007; Fournier 1988) and smart gadgets (Waytz, Heafner and Epley 2014; Waytz, et. al. 2010).

Highly likely consumers will anthropomorphize smart home assemblages (Pieroni et al 2015; Sung, et.al. 2008).

Anthropomorphism emerges from the CX Assemblage Through Habitual Interaction



Marketers should strive to understand smart home experience from both the consumer and object’s perspective.

Some smart home brands seem to intuitively understand this:

Understanding OX Through Metaphorism

LG Rolling Bot and other products are “friends” that extend the capabilities of the LG G5 smartphone

Philips smart light compatible products are “friends of Hue” that have both object-extension (Philips Hue can “take control of your home”) and object-expansion (“make your home more thoughtful”) experiences.



Consumer-Object Relationship Journeys



Consumer-Object Relationships in the IoT



Four Types of Relationship Styles Based on the Interpersonal Circumplex

The Interpersonal Circumplex (Pincus and Ansell 2003: Wiggins, Trapnell and Phillips 1988)





Communal





Agentic



Master-Servant Relationships (Complementarity) Reciprocity of Agency & Correspondence of Communion



“Object Consumers”



“Object Consumers”

What does it mean to be a consumer? Can smart objects be consumers? How should we market to object consumers?

Our framework opens the door to consideration of “object consumers”

60



Object Consumers Can Have Affective Responses

61



Object Consumers Can Make Decisions

62



Object Consumers Can Consume



Five Important Insights

64



1. Market From Bottom Up Interactions, Not Just the Top Down



2. “Everything You Already Understand, But More”

“iPad is our most advanced technology in a magical and revolutionary device…[it] creates and defines an entirely new category of devices that will connect users with their apps and content in a much more intimate, intuitive and fun way than ever before.”

--Steve Jobs (January 2010)



3. Encourage Habitual Repetition with Difference

Philips Hue motion sensor automatically turns on lights



4. Encourage Boundary Expansion



5. Segments Will Emerge From Individual Experiences



Concluding Thoughts

70



Discussion

Consumer experience in the IoT emerges from the exchange of directional paired capacities in interaction.

It is more than a passive set of properties of how the smart home affects the consumer, involving properties that go both ways, along with capacities and their expressive roles.

Taken together, the facets of self-expansion and self-extension are required to more fully understand the nature of CX in the IoT. Objects also have experiences, which consumers access through anthropomorphism.

Consumer-object relationships emerge from interaction of these experiences and it is important to understand the journeys these relationships take.

71



The Challenge for Marketers

The consumer IoT is going to be much more than the sum of its parts.

The implications of complex interactions between people and newly smart everyday objects and devices will be revolutionary.

Emphasize the experiences which emerge from interactions among entities in assemblages, not the individual devices or use cases.

Marketers need to get these devices into as many homes as possible as quickly as possible so consumers can start interacting with them and experiences can emerge.

From these experiences we can develop the tools and strategies to encourage expanded patterns of habitual use.



73


How to Market the Consumer IoT: Focus on Experience · 2016. 9. 30. · 2020 (Gartner) $3 Trillion...

Documents

Transcript of How to Market the Consumer IoT: Focus on Experience · 2016. 9. 30. · 2020 (Gartner) $3 Trillion...