How IoT Companies are Getting Smart about Overcoming Consumer Fear

From smart homes to fitness devices, the Internet of Things is opening up endless possibilities, but it's also unlocking something else in consumers: fear. For the industry to reach its full potential, IoT companies need to be smart about making their customers feel safe.

Despite digital opportunities from remote locks to Wi-Fi video intercoms popping up around the globe, the Internet of Things is unlocking something else for consumers: fear.

Research from Mobile Ecosystem Forum, a mobile trade body, shows that users are nervous about their privacy and the safety of their data. The study found that 60 percent of global consumers are worried about a breach on their connected devices and 62 percent found privacy a principal IoT concern.

Such fear could have sweeping implications for the global smart home marketplace, which is expected to more than double—reaching $53.45 billion—in the next five years. This year alone, a report by Verizon found that 73 percent of executives are launching IoT projects, in particular, in the manufacturing, energy, and smart cities sectors.

To assuage some of these primary fears, IoT business leaders are rethinking security strategies, partnering with key industry players, and getting their messaging right. Here’s a deeper look.

Rethinking Security

Consumer fear is driving business leaders to build security into the product design and to find ways to make it visible to users. One company keeping customer concern at the forefront of product design is home video-conferencing device Nucleus. As a Wi-Fi intercom system, Nucleus is heavily based on video communications, opening a live feed directly into users’ homes.

“I totally understand where consumers are coming from when it comes to concerns about privacy,” Amanda Chan, Nucleus’ head of operations said. The company markets the device at families, offering them an intercom that is simple enough for young children and grandparents to use.

One of Nucleus’s biggest challenges has been addressing privacy and security concerns around the company’s use of cameras, as well as other common security worries around hacking and mismanagement of corporate data. To begin, the IT team developed different privacy modes to offer options for how users accept connections to the device. Such authentication is becoming commonplace for IoT organizations.

“Authentication helps an organization better understand how the user is accessing the device,” Merritt Maxim, a senior analyst at Forrester Research explained. “[It] can [also] help business owners better understand their patterns of use to get more contextual data.”

Yet for Nucleus, this authentication step wasn’t quite enough. Following consumer feedback, Nucleus’ developers realized that even with robust security protocols, cameras still made some customers uncomfortable. The executive team decided to add an extra layer of protection—a physical shutter that users can manually slide over the camera—to minimize this discomfort.

“When we were developing the product, we were very proactive that these measures were put in place,” Chan said. “We thought about how can we take it one step further and that’s how we put in the camera shutter.”

Another company tackling consumers’ security concerns head on is LockState, a Wi-Fi enabled lock business that allows users to remotely open and close their doors.

“Customers that do raise questions about security,” LockState CEO Nolan Mondrow said, “often question the security of their data from an edge device to cloud, or if someone could hack into their lock and take control.”

Like any reputable IoT company, LockState employs secure authentication and encryption to ensure data is transported and received securely. But when it comes to locks, consumers still worry because they can’t see these protections in the same way they can a physical key. To combat this, the company talks about its protocols as “bank-level encryption”, signaling to users that the protocols are equivalent to those of a financial institution, an entity they already trust.

The Power of Partnerships

Another crucial way business leaders are dissipating user anxieties is by facilitating corporate partnerships with organizations that already experience trust in the market. Such partnerships are often with complementary business or technology companies, and allow each brand to leverage alternate expertise.

This strategy is critical for IoT firms because it not only strengthens their technological capabilities, but also signals to consumers that their brand identity is aligned with a name they can trust.

For example, LockState partnered with Airbnb as the vacation rental company’s preferred smart lock vendor. The collaboration offers integration with Airbnb’s booking platform that connects the lock to an Airbnb account, so that once a guest makes a booking, a code is automatically generated and sent to them. A message is also sent to the host to let them know when the door is unlocked and the guests have arrived. This integration sends a clear message to consumers that an already established and trusted company is backing this piece of smart tech.

“[Users] can automatically generate guest codes for the time of stay when reservations are booked,” Mondrow explained. “The partnerships we’ve entered with companies like Airbnb work to generate more confidence in [our] products.”

IoT partnerships are also happening at the state-sponsored level, most notably in smart cities – cities that use IoT to improve public services. Last year Adelaide University partnered with state and local government and technology companies, including tech company NEC Australia, to pilot Australia’s first smart city. Using IoT, one of the aims of the project is to improve personal safety in the city through measures like video recognition software that identify masked criminals.

As smart devices become more prevalent, high-profile partnerships are a great way to encourage adoption—an important step in chipping away at fear. “Fear will erode itself as more people start to use these products,” Chan said. “The more a product becomes a part of your everyday life, the more comfortable you feel with it.”

The Importance of Messaging

Companies like Nucleus and LockState have found that in addition to product adjustments and corporate partnerships, it’s vital to get the messaging of their security measures right.

For LockState, that messaging includes showing families how smart locks can keep them safe, solving a very real problem they experience when they travel or leave the home.

“[Our users] have found that the benefit of our RemoteLock system far outweighs the fears of moving to a digital smart lock,” Mondrow said. If technology makes the user’s life easier, especially when it comes to the family home, he’s found, they tend to be less fearful of it.

Playing to its strengths, communicating safety in a family setting has also been key for Chan and her team at Nucleus. “The message of family has been a huge driver,” she said. “The people who we’re hoping to have as customers are the people who do want to connect with their family more.”

In solving for a clear need, Nucleus combines messages of privacy with its product benefits. By recognizing that users don’t want an in-house camera switched on all the time, the company is able to offer a solution that assuages the perception without affecting its core value proposition: ease of communication.

“Knowing that we’ve been able to put out a product that’s so simple to use and that has touched a lot people emotionally has been meaningful,” Chan said. “To have customers write in to us and say the product has changed their day-to-day life and how they connect with elderly relatives, that’s truly rewarding.”