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Kris BowringSr. Director, Platform Lead
Home and Energy Management
New Business
The Connected World Consumer:Creating Relevance and Capturing MindshareFor Energy ManagementMarch 2011
Understanding The Macro-Technology Trends Influencing Consumers Today
ConsumersIncreasingly tech-savvy
and demanding experiences
ChannelsInteractive platforms that provide
connections and technology
ConnectionsHard and soft connections among devices, services,
content and people
TechnologyDevices, services and
platforms to deliver experiences and
capabilities.
Multiple Eco-Systems
Best Buy Consumer Trend Scan Results
Consumers Technology Connections Channels
User Co-Curation
GenerationalShifts
TechnologyExpectations
Source: BBY Consumer Trend Scan study 2010
Embedded Connectivity
Social OS
Connectedness has clearly become a core need for many Americans, and is increasingly seen as a core
need
Generational preferences will drive platform usage – Mass
consumer increasingly comfortable with technology
Consumers are increasingly becoming the gateway for each others’
consumption habits by finding, selecting, rating and distributing their favorite information, media, products
and experiences
Family Multi-Tasking
Products with instant connectivity and no additional contract (e-
readers) may lead to changing consumer expectations around
paying for connections
Consumers will expect multiple entry points to the Social OS to be
present in most products, services, devices and promotionsHouseholds are no longer acting
as one single consumption channel at a time, tapping
several simultaneously, even among individual household
members
As more personal devices enter the home, families are multi-tasking
even while spending time together, managing multiple information and
media tools and sources at the same time
Seamless Experience
Virtual/Physical
Crowd Support
Availability of the same services on different platforms, combined with multiple device usage and widely
available connectivity is creating an expectation of more seamless
experiences
New technology start-ups are experimenting with greater use of peer-to-peer support as a means of helping customers solve their needs
Internet and mobile technology is on the cusp of further transforming shopping for many Americans, perhaps most immediately and intensively in the electronics market
2. Utilization of multiple “Screens” as access points
4. Increased expectations for interoperability
Technology Is Becoming A Critical Dependency In Consumers’ Lifestyles
Source: © 2010 Cisco Systems, Inc,. CIU Analysis
1. More “content” supporting my lifestyle interests and needs
5. Connecting NEW with OLD creates consumer frustration
6. Lack of education & know-how to WEAVE solutions together seamlessly
3. Higher device penetration drives eco-system complexity
Yet a Proliferation of Devices Does Not Equal a Proliferation of Connected Experiences
• More devices have the ability to connect now more than ever before, yet few consumers are actually connecting them
• Consumers use home networks primarily to share internet connections and printers
• 17% connect game consoles – all other devices fall far short of this number
> 200M Connectivity-Enabled Devices now in
US HHD’s
366M connectivity-enabled devices
forecast to be sold 2010-13, not counting
PC’s and printers
<20% of Data Networked HH’s
Connect More than PC-Printer
Source: Parks Associates; Cisco IBSG
Ease is a deciding factor that drives consumers to adopt new solutionsConsumers tend not to seek out those solutions which aren’t convenient to get,
or will abandon those which aren’t convenient to use
The Experience Value Must Be Greater Than The Headache Quotient
Value of Experience > +Difficulty Complexity
8Source: Forrester Selling Digital Experiences; Cisco IBSG
CONCEPTIONI don’t even know what’s
possible
GROWING CHOICE/COMPLEXITYOver 200,000 active apps in Apple’s app store alone with a new one added each 2.5 minutes.
How do I keep up?
Consumer Barriers Industry Barriers
COMPLETIONI don’t know what to buy
COMFORT I feel stupid when I’m in
the store
CAREWho can I find to help me set it up and fix it?
EASEIf I follow the directions,
will it work?
INTER-OPERABILITYWill it work with my other stuff?
WALLED GARDENSLack of standards & interoperability
How do I move my content across devices?
CONTINOUS CHANGEManufacturer and retailer constant updates make
the purchase decision even more complex. When is it the right time to engage?
Navigating the Possibilities Isn’t Easy –A Number of Barriers Exist
9
Source: CIU Analysis, Forrester – Digital Consumer Insights; Cisco IBSG
Added Eco-System Complexity Means That Virtually All Consumers Will Need Help Solving Digital Headaches
78% of consumers
believe they will need more technology
services help in the future
Portable device
integration and interoperability
Digital media usage
downloading, streaming, and synchronizing complexities
Hardware failure
Home network configuration and security
New device/service
integration
Integration of devices, connectivity, content is critical to
the desired consumer experience.
A key point of differentiation will be in the ability to offer services that solve
these problems
Source : Parks Associates; PR CW Proof Points
Helping Consumers Understand How Energy Management Becomes A Relevant Part of Their Home System
outside the home
Content
TRANSLATE THE COMPLEX
Devices Connections
INTO THE DESIRED AND SIMPLE
“What I want to do” “How I can make it happen”Control my lights remotely
Get alerts on my phone when my power goes off
Manage my thermostat remotely
in the home
Best Buy’s Residential Energy Management Consumer Study
We Have Identified Key Consumer Insights That Influence Smart Energy Program Acceptance
• Lifestyle Drivers• Key motivations for home improvements
• Desired features for home management
• Energy Attitudes• Attitude impact on desired features for home management
• Lifestyle driver impact on desire for energy programs
• Smart Energy Programs• Appeal across Lifestyles and Energy Attitudes
A modest number of consumers (the young & wealthy in particular) are motivated by a desire to
have a more comfortable & convenient lifestyle.
This desire drives demand for remote management features. It also drives
demand for home upgrade.
There is wide-spread desire to financially and
physically protect the home. This desire drives
consumer demand for products and services that
help reduce energy consumption through
information and automated control features.
Is not a particularly strong factor in most cases but
does make a minor contribution towards the demand for smart energy
programs.
Of the three, this is the least compelling driver for energy efficiency programs
We’ve Identified Three Key Lifestyle Drivers For Acceptance Of Smart Energy Programs
Environ-mentalism
Home Safeguarding Life Maximizing
Home Safeguarding Is The Largest Lifestyle Driver For Smart Energy Programs
Most of those strongly driven by Life Maximizing desires (comfort & convenience) are also strongly motivated by Home Safeguarding concerns (home security & cost efficiency).
The None group shows greater resistance to participate in energy management programs.
They are less likely to have made home improvements and do not exhibit energy saving behaviors. They also lag in technology adoption.
36%
10%2%
49%
3%
Lifestyle Drivers (Q3/10) (among all BB HHs, n=2000, +/- 2.19%)
Home Safeguarding
Only
Life Maximizing Only
Both (HS & LM)
Environmentalism Only
None
Overall Environmentalism lifestyle is 18% of consumers, vast majority (76%) of this group fall within Home Safeguarding.
80% of Environmentalism consumers overlap with Home Safeguarding or Life Maximizing, or both
Although There Is Significant Consumer Overlap, Home Safeguarders Tend To Be Older And Less Tech-Focused
Home SafeguardingSomewhat older (fewer 18-34)Slightly lower incomes in generalSomewhat more ruralUse some CFLsMore likely to have purchased energy efficient appliancesMore likely to have installed energy efficient doors and windows, as well as weather-stripped and caulked around doors and windowsPurchased energy efficient heating/cooling systems
Life MaximizingYounger (18-44)Higher incomes ($100,000+)Larger household sizes (4+)More likely to own a second homeMore likely to live in urban areasGreater proportion live in the Pacific regionMuch greater technology adoption (universal remote control for home entertainment system, smart phone, ereaders, GPS, Blu-ray players, DVRs, security systems, etc.)
Extensive use of CFLs in homeMore likely to have multiple programmable thermostatsMore likely to have had a home energy audit
Life Maximizers Are More Likely To Make Home Improvements For Motivations Beyond Energy Efficiency & Savings
In general, “Life Maximizers” make more energy saving improvements and are more likely to cite comfort and appearance as factors as well as environmental concerns as motivation.
“Home Safeguarders” are more likely to cite cost-savings.
45%
74%76%
52%
33%
82%
77%
40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
To make my home look nicer / more up-to-date
To save on my utility bill To be more energy efficient To be more environmentally friendly
"Life Maximizers"
"Home Safeguarders"
Energy Motivators vs. Reasons for Making Improvements (Q3/10)"Q4015. For which of the following reasons did you make that home improvement?"
(Among Those Who Made Home Improvements, n=1,491, ±2.54%)
% In
dica
ting
Reas
on
Consumers Desire Different Features in Smart Energy Programs Based On Their Lifestyle Driver And Energy Attitudes
Automation / Information
Information that helps manage energy consumption and automatic controlled
thermostat, hot water heater, lighting, etc. that help with the task.
Consumers are seeking two primary capabilities in a system or method to help them manage the security, comfort, and energy use of their home.
Remote Management
The ability to monitor and manage the home while away from home.
Most Compelling Energy Program Features Are Information With Automation And Remote Management
Highly Desire Neither68%
Highly Desire Automation-Information
Only8%
Highly Desire Both17%
Highly Desire Remote Management Only
7%
Appeal of Home Energy Management Service-Groups (Q3/10)"Q5010. How valuable would each of the following be to help you manage the security,
comfort, and energy use of your home?"(Among All BB HHs, n=2,000, ±2.19%)
Across Life Maximizers and Home Safeguarders we see consumers seeking two primary feature sets:
Automation-Information—information that helps manage energy consumption and automated appliances that help with the task.
Remote Management —the ability to monitor and manage their home when away from home.
Has strongest desire for smart
energy programs
Additionally, Consumers’ Energy Attitudes Impact Their Acceptance of Smart Energy Programs
There is a tendency to feel they have done and are doing about all they
can to be as energy efficient as possible.
These consumers aren’t necessarily satisfied with their utility bills, however.
High electric bills drive anxiety about future energy costs. These consumers are on the
look-out for products and services that reduce energy costs through
automation and information features.
Believe that new technologies will help
reduce energy consumption and costs in the future. This attitude positively influences the
demand for smart-energy programs.
Energy Optimist
Energy Worried
A relatively small group of consumers have this
attitude. They seem to have accepted the size of
their utility bill and feel there would be little
payback over time from investing in making their
home more energy efficient
Energy Satisfied
Energy Indifferent
In addition to lifestyle characteristics, attitudes toward energy usage and efficiency also influence likelihood to enroll in energy management programs.
Worried but optimistic16%
Worried and not optimistic
17%
Neither worried nor optimistic
49%
Optimistic and not worried
18%
Energy Attitudes: Optimistic vs. Worried (Q3/10)"Q3070. Do you agree or disagree with the following statements?"
(Among All BB HHs, n=2,000, ±2.19%)
Those Most Interested In Smart Energy Programs Are Driven By Anxiety Over Energy Costs And Belief Technology Can Help
Those most likely to enroll in a smart energy program are worried about rising energy prices but optimistic about technology’s ability to address the problem
The group second most likely to enroll are those that are optimistic about technology but not worried about rising energy costs
Third are those that are worried and not optimistic
An optimistic view of technology is more important than a concern
over rising energy pricesHave lowest interest in smart energy programs
All Energy Attitudes Are PresentWithin Each Lifestyle Driver
47%
69%64%
21%
49%
58%
52%
18%
30%
49%45%
4%
14%
30%
24%
6%
Home Safeguarding Life Maximizing Environmentalism None
Energy Optimist
Energy Worried
Energy Satisfied
Energy Indifferent
Life Maximizers have a higher percentage of Energy Optimists and Worried attitudes, coupled with their greater level of technology adoption, it makes them a key target for Smart Energy Programs that enable automation and remote management
Examples of Smart Energy Programs Tested: How likely would you be to enroll in this program?
Util
ity C
ontr
ol • Allows electricity provider to make minor adjustments to your thermostats & other appliances during times of high energy demand
• You are able to over-ride them if you desire.
Info
rmat
ion
& M
anua
l Con
trol • A program that allows
you to monitor how much electricity your home is using at any given time
• You could better manage your home’s electricity consumption by turning off/down/up the systems using the most energy A
utom
ated
Con
trol • A program that installs,
at a modest price, devices that automatically adjust themselves to optimize your home’s electricity consumption.
• The devices would automatically learn your family’s schedule and keep your home comfortable when people are home but save money when they are not.
25%
25%
28%
29%
29%
30%
34%
36%
31%
31%
22%
30%
27%
22%
27%
19%
Remote Management
Remote Management + Security
Evaluation + Discounts
Maintenance + Fee & Tech Tune-up
Automated Control
Utility Control
Maintenance + Fee
Information + Manual Control
Very Likely Neither Likely nor Unlikely Unlikely
Overall Consumer Reaction To Smart Energy Programs
n≈500 per program concept
The desire for automation-information and remote management features in home control systems drive preferences in Energy Management programs.
Energy Attitudes Desired Features Desired Energy Programs
Home Safeguarding
Key Motivation: Financially & physically protect my home
#1 Energy Worried#2 Energy Optimist Automation & Information - Information + Manual
Control
Life Maximizing
Key Motivation: Desire for a more comfortable & convenient lifestyle
#1 Energy Optimist#2 Energy Worried Remote Management
- Automated Control- Remote management +
Security
Environmentalist #1 Energy Optimist#2 Energy Worried Automation & Information
- Utility Control- Evaluation + Discounts
- Maintenance + Fee
This Multi-Layered Consumer View Can BeA Key To Shaping Relevant Smart Energy Programs
We Have Much More To Share….
• What are the benefits that should be emphasized to persuade consumers that energy management is important and relevant to them?
• What are the key motivators of energy management behaviors and programs, and what incentives are most likely to influence participation?
• What are the most compellingenergy management programs to address consumers’ lifestyle needs?
• How can manufacturers, retailers, utilities, and agencies deliver the energy management message in a manner that resonates with consumers?
Our recent Best Buy study addresses the issues of residential energy management from a consumer benefits and barriers perspective:
Thank You!