Market Trends May 2017
LIVING IN A SMART HOME
The smart home concept is a world-wide trend, as evidenced by a recent report from the Asia News Network noting that most consumers don’t really understand the concept, and attempting to lay out what a smart home means for construction firms, appliance makers and network providers. According to Asia News:
To be truly smart, a home needs an automated infrastructure that is designed by a builder. The automated home is then filled with smart appliances produced by electronics makers. Then comes the network that connects the smart appliances and allows people to control them remotely. Smart construction involves the control and automation of lighting, heating and air conditioning and the use of biometric technologies such as fingerprint, iris, facial or voice recognition as well as many other features from entertainment to security.
Asia News Network reports that in Korea local construction firms are partnering with mobile carriers to add connectivity, Internet of Things (IoT) and artificial intelligence technologies to homes while they are being built.
While the current 4G network is fast enough for devices to be connected and controlled, the smart homes of the future will be based on the upcoming 5G network, which will connect smart devices at a speed at least 267 time faster than is currently available with less than a one millisecond delay. The 5G network will enable devices to not only save cumulative data in a cloud platform but also capture users’ behaviors by analyzing the data and providing smarter and more customized services as devices learn and better understand their users.
Two of the biggest concerns surrounding smart home development are security and compatibility. Many interconnected smart devices could be a treasure-trove for hackers and need enhanced security. On a practical basis, another challenge is the compatibility of smart appliances and devices developed by different companies. The report suggests that in order to realize a truly smart home, the industry needs global standards and open platforms.
Lastly, price is of course an issue. According to PricewaterhouseCoopers, one of four U.S. internet users currently own a smart home product, however 23% of respondents said they would not consider a smart home product because they are too expensive.
MOBILE SHOPPING STUDY
What’s stopping mobile users from making more purchases on their phone? One big reason is that the screens are too small, according to respondents to a PricewaterhouseCoopers study in September 2016. The study compared consumer usage and attitudes in the UK with those in China and the U.S. About one-third of U.S. respondents ages 18 and older said that the screen was too small. About a quarter of respondents said that mobile sites are hard to use; some of that is also attributed to screen size. Connectivity was also an issue; 17% of respondents said they had internet speeds that made using a mobile site challenging. According to eMarketers’s latest estimates, about 147.3 million people in the U.S. will use a mobile device to make a purchase this year, which works out to about 55% of all mobile phone users.
PRODUCT REVIEWS MOTIVATE SALES
Fifty-five percent of shoppers start their buying research on Amazon, according to marketing research firm BloomReach, and half of all shoppers say they rely primarily on Amazon for reviews, according to ecommerce analysis firm Market Track. Almost a quarter of shoppers check Amazon even when they are physically standing in a store.
Amazon’s reviews rank so highly in part because they are considered the most trustworthy, because Amazon goes to great lengths to root out fake reviews, and also marks and gives more weight to reviews by people who actually bought the product. They’ve also introduced a new logarithm to give more weight to newer, more helpful reviews. Amazon also requires that any review of a product that the reviewer received for free or at a reduced cost be identified as such.
Going from zero reviews to one positive review increases the rate at which online window-shoppers actually click the “buy” button by 65%, according to Power Reviews, a company that makes ratings and review software. They estimate that 20% of sales are driven by reviews and one-third of online shoppers say they won’t buy a product that has not been positively reviewed.
However, research also revealed that only 5% to 10% of customers actually write reviews. First are those who actually love (or hate) a product. Next are people who believe that since they rely on reviews, they should also write them. Finally there are people who are strongly loyal to the retailer or brand and want to help them out. Research also shows that negative reviews can be helpful, and that people are distrustful if all the reviews are good. Profitero, which helps online sites price their products competitively, says that 20 reviews is the magic number.
MILLENNIALS GO DIGITAL EVEN IN STORE
Two-thirds of millennials prefer digital shopping over shopping in physical stores, and many use their mobile phones to do research while they are actually in a store, according to a recent eMarketer study. Millennials and Gen Xers are both predisposed to buy online, with more than 90% of Internet users in both age groups having made a digital purchase in the past year. Millennials are more likely than Gen Xers to research products or make a purchase on their smartphones. Nearly all millennials research products online before they go to a store. And despite a strong presence on social platforms, millennials still respond well to email marketing, with more than half of them listing email as the primary influence behind them making a purchase from a retailer's website.
WORKING FROM HOME
The digital revolution is also revolutionizing how people work, with many more people working several part time jobs instead of a traditional full time job. Amazon recently announced plans to create more than 5,000 new part-time jobs over the next year in virtual customer service. Virtually located employees who work 20 hours per week or more get benefits, including the company’s innovative Career Choice program that pre-pays 95% of tuition for courses related to in-demand fields, whether or not those skills are relevant to Amazon. Amazon plans to hire more than 30,000 part-timers over the next year, along with 100,000 full-time, full-benefit employees over the next 18 months.
PANEL RECOMMENDS NEW A.I. INDEX
A 13-member panel of economists and computer scientists recommended the development of an Artificial Intelligence (A.I.) Index, analogous to the Consumer Price Index (CPI), to track the pace and spread of artificial intelligence technology. The panel released a 184-page report published by the National Academies of Sciences, Engineering and Medicine, whose studies are intended as objective analysis to inform public policy. The resulting technical assessment could then be combined with detailed data on skills and tasks involved in various occupations to guide education and job-training programs. A public-private collaboration is necessary to create such tools because information from many sources will be the essential ingredient. Technologists and academics differ sharply on how fast the next wave of automation will proceed and how many occupations will be affected. Pulling together government and online data sources could eventually give workers useful information about promising careers and give employers information about productive avenues for job training.
RETIREMENT ISN’T WHAT IT USED TO BE
While 55% of 45 to 65 year-olds surveyed by Ipsos/USA TODAY planned to travel more in retirement, a surprising 34% planned to keep working. Of those, 8% don’t plan to retire at all, while 22% plan to quit sometime between 66 and 70. Of those surveyed who plan to work after retiring, 65% say they need to supplement their income, and a full 30% of those surveyed have no retirement savings. Of the 68% of people who do have savings, 30% have less than $100,000. More people are already working longer, with nearly 20% of Americans aged 75 and older in the labor force last year, up from 16% in 2007 and 10.8% in 1985.
© Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.