Study: Shoppers wary of connected devices

Dive Brief:

U.S. consumers are open to connected devices and the Internet of Things, but they require reassurance that their payment and personal information are secure, according to a study from global payments company Worldpay. While 55% of consumers welcome the convenience of a chatbot or virtual assistant shopping on their behalf, for example, just 37% would allow a virtual assistant to have access to their payment information, the study found.
In the U.S., nearly half of consumers (48%) said they feel comfortable with a connected device, such as a refrigerator, ordering items on their behalf, but a large majority (62%) want to approve purchases beforehand and 78% prefer to be notified before the order is placed, the study found.
According to Worldpay, consumers are both worried and skeptical about these assisting devices. An overwhelming majority of respondents (73%) expressed concerns about the manufacturers of these devices having access to personal data, while 77% worry about devices being hacked by fraudsters. Nearly half (48%) are skeptical that a virtual assistant will ever be able to conduct a conversation like a real person, according to Worldpay’s press release.

Dive Insight:

While message app chatbots seemed poised to revolutionize retail customer service last year, voice assistants, particularly from leaders in the space like Amazon and Google, appear to be stealing much of that thunder. Some 35.6 million Americans will use a voice-activated assistant device at least once a month this year, according to research released in May from eMarketer. If that forecast proves correct, it would be a 129% jump in voice engagement with virtual assistants over last year.

In both cases, though, consumers appear to be leery of the security implications of each technology, even as they are open to leveraging them for advice, research and purchase.

"No matter if done by a human or machine, it is vital for consumers to remain in control when they’re delegating payment tasks," Casey Bullock, general manager for North America at Worldpay, said in a statement. "Our research has found that there should always be a conscious ‘act of consent’; be that via a device notification, button push or a pre-set rule like a spending limit, being agreed in advance."

Amazon alone is seeing wide penetration of its Alexa voice assistant, available to customers through its Echo devices and its app. They could provide Amazon with some $10 billion in revenue by 2020 and be a "mega-hit," according to a note published by investment bank RBC Capital Markets earlier this year. And several retailers, including Walmart and The Home Depot, have also turned to Google Home to help customers research and buy their products.

Nevertheless, the technology remains in its infancy, with hiccups that threaten to turn some shoppers off, Sam Cinquegrani, CEO and founder of digital commerce solutions provider ObjectWave, recently warned in a piece for Retail Dive. Such bumps are likely leading to some of the skepticism uncovered by Worldpay.

It requires a huge databank in order for a command or voice prompt to be effective, he warned. Otherwise, voice assistance can become counterproductive. "The software can, and often does, fail to recognize a word, annoying the customer instead of providing a new way of engaging her," Cinquegrani said. "With Voice, the maxim 'know your customer' is almost too glib — there are many more layers to the Voice interaction than any other digital touchpoint."