Starcom study aims to predict future consumer behaviour

Media agency strives to find out how smart homes will change consumer behaviour

In an effort to get ahead of consumer behaviour, Starcom is undertaking an Australian-first ethnographic study into the connected home of the future.

Starcom has taken four Australian households and transformed them into connected smart homes of the future, in a research project designed to uncover how smart technology will change consumer behaviour, and the commercial opportunities this offers for brands.

The project is being led by Starcom’s national head of futures and product, Graeme Wood, along with research agency partner, The Practice Insights. Collaborating brand partners include Seven West, Visa and Samsung, who will guide the direction of the research to inform their product development, marketing and sales.

“We believe the best way to understand people is to observe and engage with them in real-life situations. So we’ve created four fully-connected smart homes, and in conjunction with our brand partners, we’ll be studying technology through the experience of real people,” Wood said.

The four households, based in the greater Sydney area, have been chosen to reflect the complexity of Australian family life. As part of the initial stage of the 12-month project, these ‘natural labs’ will be observed over a four-week period, with observations recorded via a mix of filmed video diaries by the households, filmed observation, and show-and-tell interviews.

In addition, families will be set certain tasks to undergo, and will report on them as they go.

“We will bring to life what the future of family living will look like and provide an ongoing ethnographic study of human, lived experiences. Research outcomes will include gaining a deeper understanding of how and why consumer behaviour is changed by the experience of living in a smart home, and provide practical knowledge relevant to brand experience, product, service, content and commercial development," Wood said.

“With forecasts that 43 per cent of Australian homes will be smart technology enabled by 2023, and UK/US voice commerce expected to grow from $2 billion to $40bn by 2022, the opportunities for brands are enormous.”

On announcing The Future of Connected Living research project, Starcom CEO, Toby Barbour, said we’re experiencing a fundamental shift in connectivity, with consumers embracing voice technology at a rapid pace. 

"When it comes to the use of voice technology in homes, we’re already seeing significant changes in human behaviour with the arrival of smart speakers and voice assistants in over one million Australian households," he said. “But so far businesses have largely focused on the technology, which only tells part of the story. To fully realise the opportunity, our thinking needs to be human-centred."

Wood told CMO Starcom has been tracking marketers’ confidence and investment levels in customer experience capability over last three years, and has seen levels of CX maturity rise from 50 per cent to over 90 per cent today.

This has been driven by major investment in martech and data, among other things. However, this focuses marketers on the transaction as the most important metric, but this tends to be reactive and doesn’t track changes in behaviour. Wood said a lot of clients are asking what’s happening next and how to plan for it.

“Customer behaviour is changing faster than businesses can keep up. We are looking to elevate the level of research to stop focusing on the ‘what’ that’s changing, like technology. The more predictive and higher value insight is in to things that don’t change so fast, like human desire, motivation, and expectations. That is what is going to enable us to decide what we need to do next,” Wood said.

“This also enables us to get a bit deeper into how to develop brand and go to market strategies in the next two to five years. To do this we needed to view people in their natural environment. We are trained to think of ourselves of rational beings, but only about 10 per cent of our decisions are rational.

“So we set up a connected living panel with 36 households across various demographics, to understand what their expectations, hopes, and desires are for the future, and the way technology is going to help or hinder this. We have completed this phase." 

From there, one representative household from each of the four demographics will explore the near future of living.

"We created design fiction of the near future by installing state of the art connected homes, including voice interaction, smart fridges, washer/dryers/vaccums, TVs and speakers, as well as lighting," Wood continued. “It will be a deep dive over the next five weeks, and we are setting tasks, conducting interviews, and pushing these selected households to explore their smart homes."

With equipment staying in the houses for good, Starcom will be able to follow up in 12 months as well.

“What’s interesting is the way the participants have lent in and are willing to put up with issues and find ways to solve them, and are willing to see how connectivity can be beneficial for the," Wood commented. 

“This will lead to deeper insights and predictions. Voice is interesting, particularly as the concept of brand equity has been built up over decades, with memories of visual entities brought out at point of purchase [POP] for subconscious preference, so the challenge of audio branding is an interesting one. POP in the future is potentially non-visual, but equities and design language in global brands are very much visual.”

According to Wood, human behaviour change is a product of motivation and opportunity. Opportunity is what’s changing at the speed of Moore’s Law, and motivation is what changes at the speed of Darwin’s law.

“So motivation is where we should put our energy and research budgets. This is what is going to be constant and allow us to stay ahead.”

Australian Association of National Advertisers CEO, John Broome, said marketers are always interested in how consumers react and change their behaviours in response to new technology. 

"Emerging developments in connected home technology will be very interesting, and Starcom’s study will give us a perspective on what is to come," he said. “As new behaviours emerge, they will present new opportunities and challenges, particularly as existing behaviours potentially disappear. Savvy marketers will want to be in front of these changes before they happen.”

The project will include video diaries, reflective interviews, and formal interviews every week on specific tasks, which include a range of smart living goals based on the expectations and hopes of the focus groups. Following this, Starcom will undertake quantitative research as well before final results are released later in the year.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu 

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