Marketing challenges emerged from consumers’ perception of security issues of the Internet of things

4.2 Study design

The interviews analysis revealed several important insights.

Figure 15 - “Lab Explores” profile at the Orange Lab

It was decided to use the Orange Lab respondents' base instead of launching the questionnaire for the general France population as these “Lab Explores” affine with the target audience of the future service.

After eliminating answers of those who did not responded to the information and application part question (1381 out 1728 respondents), the respondents' base kept being affinitive.

Figure 16 - Sex and age distribution within Orange Lab Sample and target audience universe of 1328 respondents

Meanwhile Smart TV, Home and Car took its place in consumers' lives. They are the most actively used devices (base of users ever tried an object of a given category)

• Smart TV - 55%

• Home - 37%

• Car - 35%

At the same they are the most fidelizing devices since the % of those who stopped using the object after a trial are the lowest (base of users ever tried an object of a given category)

• Smart TV - 12%

• Home - 16%

• Car - 13%

It can be explained by the fact they have the highest overall satisfaction level with important “very satisfied” answers share:

• Smart TV - 89% (38%)

• Home - 91% (40%)

• Car -93% (39%)

In contrast with Smart TV, Home and Car, Drones, Health and Baby cameras don't stay with users for a long time. Whereas they are tried by a few (Health and Baby cameras were mentioned above as market newbies), they are yet the most abandoned devices (base of users ever tried an object of a given category).

• Drones30%44%

• Health tried by 18%then rejected by34%

• Baby, pet surveillance28%39%

The reasons of abandon of these devices are the same as main reasons of stopping the usage, for all categories of devices the following are:

• Absence of need - 53% (in particular for categories: 67% for Surveillance, 56% for Health)

• Undeveloped technology - 27% (in particular for categories: 31% for Health, 29% for Drones and just 18% for Surveillance)

• Lack of reliability - 16% (in particular for categories: 20% for Drones, 19% for Health)

• Security issues - 10% (in particular for categories: 11% for Health, 8% for Drones and Surveillance)

4.4.3 Consumers' security issues profiles

Statistical analysis has revealed significant variations in security related behavior only among segments, smartphone operation systems and age.

1. Users particularities among Segments

Dynamic Parents trust technologies the most - smartphones and its application are believed to be secure by 58% and 65% respectively.

Value Optimizers follow up Dynamic Parents in terms of level of trust, yet in contrast with them, only 31% vs 45% believes in higher Devices' applications security.

Enthusiastic Explores trust nor smartphones neither Devices' applications (the last ones are perceived to be secured by 47% and 36% respectively). Moreover, these segments demonstrate a strong tendency to indicate the false data - 60%.

Positive Aspires have the least faith in Smarphone security - 29% only, and the strongest tendency to use false data - 69% though they scored the 2^nd in the biggest trust in Devices Apps - 40% (after Dynamic Parents). However, at the same time the tendency to use the false data can be explained as a security measure since they are the most sharing users - 67% claimed to share their data with other users vs 42% (others' score).

2. Users particularities depending to Smartphone system

iOS users feel safe significantly more than others which is inferred from their the hignest Smartphone and its Apps trust - 65% and 74%. Simultaneously they show the highest transferred trust in Object - 72% and the biggest willigness to share their data with other users - 50%.

Meanwhile only 56% Windows and 53% Android users trust their phones. Furthermore, Windows phone users don't feel like sharing data - 25% vs 43% Android.

Consequently, Windows and Android platforms are obviously to demand more intensive communication on application security.

3. Users particularities among ages

The older a person is, the more one believes that Devices' Apps are more secure than the rest of the phone apps (decline from 57% of trust for 55+ to 35% for 18-24).

The younger a person is, the more fake data one uses (decline from 61% for age 18-24 to 38% for 55+).

4.4.4 Application test results

For the beginning the respondents were invited to evaluate a basic application proposition on which further modification option were proposed later. The basic proposition is presented below:

«Vos données personnelles recueillies par l'application ne seront visibles que par vous et ne seront pas partagées avec des tiers ou d'autres utilisateurs sans votre autorisation.

Afin d'avoir accès à des services supplémentaires fournis par des entreprises partenaires, vous pouvez partager ces données recueillies avec elles.

A tout moment, vous pouvez annuler cette autorisation de partage.

Les données issues de l'usage de vos objets connectés pourraient être rendues anonymes puis partagées avec des entreprises partenaires dans le but de créer de nouveaux services ou améliorer les services existants. »

The average results of security appreciation on different levels are presented in the Figure below.

Figure 18 - Application security scores split, 4 is maximum

The results witness that the application “as it is” has a good security score. The most is to highlight that the proposition itself already persuade the consumers that they are in control and that no data abuse will happen within the app (3,03 out 4).

As to the target audience segments application perception, it is believed to be secure by 60% of respondents at minimum (Value Optimizers) whilst Positive Aspirers are the most persuaded in security audience for the moment (79%). Dynamic parents have the biggest absolute trust (24%) whereas Value optimizers, being the second largest group, have doubts the most (2,64 is the weakest average security score). Details are presented in the Figure below.

Figure 19 - Average security scores by target audience segments, 4 is maximum

Finally, 72% of respondents were ready to install the application “as it is”.

In order to understand the reasons not to install the application, volunteer comments were analyzed. Overall 113 respondents decided to comments their choices 67% of which were comments to the negative answers. Fortunately, the vocabulary analysis show the security is not the main issue not to install the app. Moreover, negative answers are massively biased by the proposed usage situation description (precisely: 85% of “Definitely no” and 54% of “Probably no”).

Figure 20 - Intention to install question's comments distribution

Further vocabulary analysis of negative answers (in other words, absence of intention to install the app) witness that the following subjects were revealed (% of comments):

• Necessity of larger investment in connected devices - 21%

• Usage of devices not active enough to have a such application need - 11%

• Compatibility with already bought devices issue - 8%

• Gadget - 5% (only cited by “probably no”)

• Security and Application quality - 3% each

This way it is possible to conclude that the application must be compatible with a larger diversity of already existing devices not to force addition investments.

Other mentioned topics were:

• Willingness to test - 7% (“maybe” and “yes” respondents)

• “6 month is too early” - 2% (“probably no” respondents) have doubts in integrating such an app in their lives.

• Already have a solution - 4% of respondents are already using alternatives (in particular ImperiHome and Jeedom solutions were cited, both are for house control only).

4.4.5 Monadic tests results and options approval

The Orange legitimacy to launch the app check resulted in conclusion that providers are far from being the target audience favorites. In fact, in spite of qualitative stage findings the startups are the most legitimate companied to launch such an app.

Figure 21 - Companies' legitimacy to launch the app to the market

Firstly, analysis has shown that consumer trust in the famous brands has nothing to do with service provider choice (no correlation).

Secondly, the younger the audience is, the more legitimate Start-ups/Big companies are, and the less legitimate Internet and Mobile providers are (progressive decline with the age from 56% to 30%, and from 91% to 80% of total positive answers respectively). Consequently, it is vital to communicate with youngsters better.

Figure 22 - Trust in providers decline with the age

Then, Dynamic Parents and Positive Aspires have the more trust in Internet Providers than others. Besides, Positive aspires have relatively less trust in Start-ups (legitimate for 65% vs 85%) and in Big companies 50% vs 75%.

As to the sex, women have relatively less trust in Start-ups (they legitimate for 78% vs 88%, where totally legitimate for 32% vs 45%) and more to Mobile operators (legitimate for 80% vs 70%, where totally legitimate for 39% vs 27%).

Data sharing options test

According to the test results picky data sharing option is audience favorite, see results in the Figure below:

Figure 23 - Data sharing options test results

Respondents homogeneously prefer choosing data pieces to share one by one from a list, so this option is accepted by 90% of respondents and totally accepted by 51%. More important, this option is accepted by 60% of those rejecting to authorize the whole list, consequently can serve as the additional incentive to share the data for those audience.

The younger the audience is, the more is willingness to tick off (the most acceptable option share: from age 18-24 - 68%, 25-34 - 52% to 47% for 55+).

Anonymous data sharing options test

Anonymous data sharing option shall be distinguished by purposes (new service creation and existing service improvement are better to be approved independently from each other), see test results in the Figure below:

Figure 24 - Anonymous data sharing options test results

Choosing anonymous data sharing options according to further data usage is accepted by 87% of respondents, totally accepted by 41,6%. Besides, it is accepted by 68% of those rejecting to authorize anonymous data usage all at once which makes it the preferred option at the end.

Enthusiastic explores are especially attracted to this option (the most acceptable option share equals 59% vs 42% at an average).

4.4.6 Data Categories Features

At the beginning it is important to mention that an attitude towards demanded security levels for various data is homogenous. Only Positive Aspires are less concerned with home and children data security in terms of “very important” and just “important” answers balance. This way, for instance their 90% of total answers claiming the importance of children related data security are split like 40% of “very important” answers and 50% of just “important” answers whereas others' answers are distributed like 80% of “very important” answers and 13% of just “important” answers. Nevertheless the Positive Aspires can be considered as equally concerned by the security issues. In general all the data but sport performance one is valuable for a user since the demanded security levels were always higher than median (i.e. 2 out 4). The lowest security is demanded for sport performance data (2,71 out 4) in comparison with others yet it is still significant. Children, Home and Health data need to be protected the most The highest level is attributed to the “loved ones” i.e. children related data (3,79 out 4).

Table 3 - Demanded security levels for different types of data

Data recommended to be included in app

Children and pets surveillance. Data collected by children and pets surveillance devices is valued the most by the consumers. Its demanded security level is the highest and equals 3,79 out 4. When integrating this devices category in the application, at least localization and health and physical data must be included as the most collected by the users

Table 4 - The most collected Children and pets surveillance data (base of 325 resp. ever used an object)

Home

Home related data is the second needing the highest protection. So the demanded security level goes up to 3,77 out 4. Five the most collected data segments are movements detector, inside/outside temperature, fire alarm, windows/doors openings and electricity/light control. Those types of data are collected at least by 42% of this devices users, hence recommended to be included in the app.

Table 5 - The most collected Home related data (base of 647 resp. ever used an object)

Health (specific medical data)

Health related data (in particular specific medical data) is considered to be highly personal and is preferred to be protected. Its demanded security level is 3,69. As to the most commonly collected data categories, they are heart rate, body temperature and blood sugar rates meanwhile the heart rate is the most tracked data with those devices.

Table 6 - The most collected Health related data (base of 189 resp. ever used an object)

Physical form and well-being

Physical form and well-being data in contrast with the Health related data is less valuable. The demanded security level equals 3,25 vs 3,69 of health data one. Consequently, it is proven to be important to distinguish those data communication and persuade more health concerned consumers in data security.

In the app the physical data is recommended to be represented at least by weight, heart rate, calories intake/calories burnt, sleep data.

Table 8 - The most collected Physical form and well-being data (base of 421 resp. ever used an object)

Sport performance

Sport performance data demanded security level is 2,71 out 4 which is the lowest yet still more the median. This data segment is better to be represented all the proposed data types since at least they are collected by 57% of users. Distance, calories burnt, GPS and steps are the most tracked by far.

Table 9 - The most collected Sport performance data (base of 518 resp. ever used an object)

1. Work on the Orange image harder with younger audience

Since the young audience is the most attractive for the company in terms of early adopters' ratio within it, it is crucial to ameliorate the company image.

Nowadays, Orange being the most expansive provider and having a quarter of century long history (it's created 1 January 1991) i.e. being one of the oldest French telecom providers, Orange is not organically associated with the company for the youngsters. Even though the company communicates actively to the younger audience, those actions don't seem to be efficient enough.

At present moment, the company communication is sooner quality oriented with a premium touch which is putting accent on its expertise and quality services. In my opinion, Orange must not deteriorate this image. However the company could add more start-up style agility, challenge, dare to the market mood and play on the ground of young ambitious companies whereas not losing the side of the stable truth-worthy telecom giant.

2. Sheer youngsters to share their true data

As we discovered the correlation: the more data the person reveals the more fake data are in it. Somehow people tend to self-protect themselves by creating false data to fill the gaps in profiles.

Consequently, the purpose is to communicate more on shared data security while simultaneously support people's data sharing. As it was explored in qualitative and quantitative study various levels of data protection (from security certificates to promises to delete consumer's profile on demand) must be shown. In addition, it is essential to secure company-person communication with no access to the specific not generalized and not anonymous data by the third companies OR if giving such an access, to propose real high value services in return of the data.

This way Orange must dedicate all its expertise and data findings to creation of true original service propositions genuinely affinitive to consumers' needs. It is probably to be more preferable to hide partly pertinent offers unless it is demanded so by the consumer, and to show the best matches only.

3. Communicate on security more for Windows and Android phone users

Apple phone users seem to benefit from iOS security advantages. Apple security communication spreads as an echo to its devices and applications. Windows and Android users feel more insecure about their data since they are more likely to be hacked by side unauthorized programs.

Hence, for Orange it's preferably to present all the possible security guarantees in the application description without omit any. Furthermore, in order to reinforce communication and ensure better understanding of security and privacy conditions, I recommend creating a mobile Q&A page whose link's to be placed in the application description. That Q&A would explain further all security and privacy related details thus filling consumers' gaps in the application's security perception.

4. Integrate the top collected data of different categories in the App

At the moment of the application launch it is not necessary to ensure collection of all the possible data. It is sufficient to include into the application's options the gathering of the most frequently used data. Thus the demand for the essential data is satisfied without extra expenses from the company part.

Other data collection options can be added in subsequent period after ongoing analysis of consumer trends and new so-called “must-have” data detection. As soon as specific data is started being collected by larger number of consumers while the more and more devices propose the analysis of that data, it is the moment for the company to include such a data in the application.

This way the company can be sure both in return of its investments and in larger consumers' need coverage.

5. Communicate more on data security when including Children, Home and Health (medical) data in the app

Since people are more sensitive to the data concerning their loved ones they tend to protect it more. Consequently, not to hinder data sharing and not to deteriorate the security perception of the application, it is still preferable to create the Q&A page with several questions regarding children, home and health data in particular.

There it is important to highlight that company appreciate consumers' trust and values that data the most. It's also crucial to mention that security of such data is the company's foremost priority.

6. Communicate on data invisibility for others and not sharing with the third companied without permission

Consumers tend to trust to just a counterpart of the deal. This way, being persuaded in company's credibility and security, they don't expand this trust to the company's partners or other users of the system.

Moreover, other users are perceived hostilely, since they have no direct dependence of the data and their intentions are unknown (in contrast with company that needs the data for business) they can be trusted.

As a result, all the data a consumer share must be invisible for all the users by default. As to the third companies, if their additional value propositions (highly pertinent for a specific consumer services) are considered useful and attractive by the consumer, the one could authorize the chosen company to receive and treat the consumer data. In order to create incentives and promote the third companies services, the application could have online mobile page with the third companies' and their services' descriptions. Those examples must be interactive, representative and appealing otherwise the consumer won't see any need.

7. Communicate on users possibility to change their decision on data sharing with the third companies

It is recommended as well to give a trial period of the chosen third company services with automatic prolongation unless the consumer withdraws.

However, the consumers must be communicated in advance that the withdrawal is possible at any time; otherwise the trials' demand will be low if considered as a definitive subscription.

8. Allow to share the collected data one by one and allow to stop this share at any moment

It was discovered that guided by security / privacy issues the consumers prefer both at the moment of registration and at any moment of usage to consult the whole list of the data available for gathering. Then picking a data one by one gives the consumers the perception of control over the data and enhances their trust to the company (since they are sure not to have “blind spots” as they approve the data to share manually).

In addition, even if people choose not to share all the data, this option will let the coverage of larger audience: the application becomes attractive even to those who want to hide the health related data, for instance, and to share all the rest. In other case those concerned consumers won't install the application at all.

9. Allow to choose sharing of anonymous data according to its further usage (new services creation / service improvement)

The results also have shown that even a person, allowing the data collection to the third company, still share more willingly the anonymous data with the company application-provider directly (for the application improvement sake). Since the anonymous data sharing with the third companies for new services detection purposes is considered as a for-profit operation only, it is better to split the anonymous data sharing on two categories.

This will allow the company to stress the application security and transparency one more time thus stimulating the application installation and further data sharing.

Brief Executive Summary

Concluding the study results to generate additional revenues with a help of services collateral to the broadband Internet and Mobile, it's recommended to launch the app having the satisfying the following criteria:

ü Not sharing collected data with other users

ü Not sharing collected data with third companied automatically

ü Allowing to share the collected data one by one and allowing to stop this share at any moment

ü Allowing to choose sharing of anonymous data according to its further usage (new services creation / service improvement)

ü Allowing to work at least with the top collected data of different data categories

When building communication it's advised to make sure to

ü Communicate more on data security when including Children, Home and Health (medical) data in the app

ü Persuade in security Windows and Android users harder

ü Improve Orange image among younger audience

Conclusion

It is important to ensure an appropriate level of security, authentication and encryption of communications for all the devices connected to the network, especially of those collecting Children, Home and Health data.

Security seems to be is a basic requirement that must be taken into account. However in term of marketing study we discovered that security of connected devices among other reasons is far from being the first one. In practice, being the emerging high-tech market proposition, those devices have a lots of shortcomings in eyes of consumers. Firstly, some of the smart devices categories have not proved yet their utility for consumers, so they don't see any benefit of owning one. Secondly, even if a consumer buys one, he or she is likely to be disappointed since the promise of devices performance exceeds their real capacities. Consequently, since the security comes as the fourth reason, the H1 is rejected.

Although security issues raise some concerns, there remains no doubt that the Internet of Things is able to provide organizations a number of advantages: network-connected devices will be able to generate valuable information that will enable companies to better understand how to use their products and services to provide a more high quality service to its customers and continue to monetize its software for competitive advantage.

Yet only by solving reliability, functionality and then security problems, every counterpart (producers, service-providers and consumers) will be able to fully take advantage of the "Internet of Things".

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