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Research insights article published in the Swiss Marketing Society (gfm): When Products Become Autonomous—Recommendations for the Adoption of Smart Products

https://gfm.ch/forschungsreihe/gfm-forschungsreihe-3-20-wenn-sich-produkte-selbstaendig-machen/ (in German)

Zimmermann, Jenny L., Melanie Clegg, Emanuel de Bellis, and Reto Hofstetter (2020), ”Wenn sich Produkte selbstständig machen – Handlungsempfehlungen zur Adoption von smarten Produkten”, Schweizerische Gesellschaft für Marketing Forschungsreihe.

72% of the Swiss population already own a smart product and 59% consider purchasing smart products in the near future. These are results of our “Smart Products Reports 2020”, the first representative study in the Swiss market on the perception of smart products. However, company revenues generated from the smart products sector and public discourses suggest that consumers are also skeptical, distrustful and even fearful about these novel products. The development towards smarter products is highly interesting from a social and a business perspective. At the same time, it raises the question for marketing managers and product designers of how smart products with their new core characteristics and product features can be optimally integrated into consumers’ everyday lives.

To answer this question, our gfm insights article combines findings from the Smart Products Report 2020 with insights from current consumer research. In order for smart products to reach their full potential and for consumers to benefit from their advantages, there is still some backlog in terms of product development, design and communication. Based on insights of the Smart Products Report 2020, best practices and current consumer research, the article derives and explains eight concrete recommendations for action to make Switzerland even “smarter”:

1. Emphasize control and intervention options.

One of the challenges for companies is to satisfy consumers’ need for control given the high degree of autonomy of smart products. A solution could, for example, be a physical switch with which customers can intervene in the activity. Furthermore, features implemented in the product design with the aim of giving control must be highlighted in the communication strategy.

2. Enable connection of smart products and a central control.

According to the results of the Smart Products Report 2020, Swiss consumers see the advantages of connected products—they want connectivity and also have concrete expectations of how different products should be connected. This depends, for example, on product type and category (e.g. smart products for the home, entertainment, etc.). Thus, products should be connected mainly within their own product category and in addition there should also be “central” products.

3. Promote trust and social integration of smart products.

Due to their specific characteristics, smart products are often personified by customers, which can have a positive effect on their perception if the impression of social attachment is created. Companies can actively promote this, for example by having customers give individual nicknames to their products.

4. Highlight potential cost savings.

The Smart Products Report 2020 reveals that consumers consider smart products to be too expensive. According to the report, there is therefore catch-up potential in terms of communicating cost-saving opportunities. For example, potential savings can be highlighted by reducing electricity and water consumption.

5. Emphasize the time gained through using smart products.

Customers can delegate tasks to smart products, which saves a lot of time. The Swiss population sees this as an important advantage (Smart Products Report 2020). Advertisers can take the gain in time, which is often a scarce resource for consumers, into account in their communication strategy.

6. Highlight the potential for self-optimization instead of threatening self-esteem.

Smart products are often perceived as a threat because consumers fear they could be replaced. In order to counteract such fears, it is advisable, for example, to emphasize that smart products can contribute to self-optimization and can support their users.

7. Address data collection as a sensitive issue.

On the consumer side, there is a fundamental mistrust of data collection and the need to protect one’s own privacy. Since a technical requirement of smart products is to collect data, this poses a challenge and should be explicitly addressed by companies.

8. Let consumers test smart products.

The Smart Products Report 2020 indicates that even testing smart products may tend to increase the willingness to buy smart products. Consumers can thus experience the advantages of the new products directly. Examples of this can be test settings in stores or the distribution of test products.

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Media Reports

Smart products – somewhere between skepticism and fascination. That’s the verdict of the first media reports on the new Smart Products Report 2020.

The largest Swiss newspaper 20 Minutes asks: Do smart devices make us stupid? The article discusses why smart products evoke both excitement and concern among consumers. Despite the increasing acceptance of smart products, Swiss people fear that common tasks such as cleaning and cooking will be forgotten when using new technologies.

Other media outlets such as Blick, Luzerner Zeitung, and Swissinfo focus on the surprisingly high adoption rate of smart products in Switzerland. Overall, over 20 newspapers and radio stations have mentioned the Smart Products Report 2020 on its first day after publication.

How Smart is Switzerland?

The Smart Products Report 2020 is the first study to shed light on the perception and use of smart products in Switzerland.

With rapid developments in technology, especially in the fields of artificial intelligence and robotics, products are becoming increasingly smarter. Smart products are products for private use that can collect and process data in order to react to their environment. This means that they are increasingly able to operate and undertake tasks autonomously and even “think”. The first representative study on the topic in Switzerland shows the current and future distribution and perception of smart products in Switzerland and provides an overview of the novel benefits and risks they carry.

Managers need to rethink
Products in our everyday life are becoming more and more intelligent. Today, for example, 28% of the Swiss population already own a Smartwatch while 20% own a robotic vacuum cleaner. From the consumers’ point of view, these smart products bring new amenities but also challenges. Overall, our study results show that these changes have already been well received in Switzerland and will continue to do so. Despite their widespread distribution, it is crucial to identify and address the concerns of the Swiss population, from both the political and business side, in order to effectively use the potential of these new technologies. Smart products must be integrated into everyday life in such a way that costumers can benefit from them. For example, the high convenience factor and time gains can act as a driver and help to establish new habits. Consumers can make use of the time savings wisely, instead of focusing on giving up activities that could result in unlearning of specific skills.

How do consumers perceive smart products?
The academic literature is increasingly investigating the barriers, but also the drivers of adoption of smart and autonomous products from various scientific fields (de Bellis & Johar, 2020; Leung, Paolacci, & Puntoni, 2018; Porter & Heppelmann 2014; Schmitt 2019). The aim of our study was to assess perceptions in Switzerland and to shed light on which factors are most relevant locally. We see that smart products in Switzerland already bring changes compared to conventional products. For example, the relationship to products is changing: Consumers use nicknames for their products and describe the interaction as “collaboration”. This shows that, as technology develops, the relationship between product and people in Switzerland is also changing fundamentally. Products are being humanized and socially integrated.

Methodology
In order to understand how smart products are perceived in Switzerland, a representative survey was conducted in cooperation with the Faculty of Economics and Management of the University of Lucerne. In the online study, participants living in Switzerland were questioned about their use and perception of smart products. The survey was representative with regard to gender, age, language (three language regions), canton and education. Our sample consists of 1004 participants.

Four recommendations for businesses
The key findings of our study can be accessed in our Top 15 Insights and the full Smart Products Report 2020. The study results show that smart products are already widely spread in Switzerland – 72% of the Swiss population already owns at least one smart product – and that developments and related changes will continue. Based on our insights, the following recommendations can be derived:

1) Highlight time savings
We can see that time savings achieved with smart products are of large importance. In addition to a high convenience factor and the fact that users follow the trend by using smart products, time savings are seen as an important advantage of smart compared to conventional products. Swiss people would like to use the time gained mainly for their leisure time, for relaxing, and with their families.

2) Connect products wisely
Our study results show that many users would like to have their smart products being connected with other smart products. On the one hand, there are products that should be connected primarily within their product category, but we also see “central” products such as smart lights and smartwatches. These central products should be connected with many products and many different product categories if the interests of Swiss people are considered.

3) Focus on social integration
About a quarter of the users have nicknames for their smart products, meaning they do not use the actual product name, but a different term for their smart product. For example, “Robi” (robotic vacuum cleaner) autonomously vacuums the floor and “James” (smart food processor) takes care of dinner. Furthermore, the interaction with smart products is perceived as cooperation. Smart products are thus increasingly personalized and socially integrated by the Swiss population. This could be further supported by companies. Additionally, consumers should also be encouraged to interact with each other (e.g., shops or social networks).

4) Address consumer fears
More than half of the Swiss population perceives that an excessive usage of smart products leads to the unlearning of specific activities such as cooking and cleaning. This skepticism must be addressed by companies. In this context, it is worth pointing out that the time savings and the use of new technologies can be used to promote new potential among consumers. Convenience aspects and time savings, for example, can make it easier to establish new habits. In addition, the time gained can be used for pleasant or meaningful activities. With a focus on this, presumed fears can be reduced.

The study was supported by Centralschweizerische Kraftwerke AG and Vorwerk Schweiz AG.