'Tis the season for predictions — the most dangerous time of the year for potential prognosticators looking to offer the world a sneak peek as to what’s coming next in the new year. On the whole, Karen Webster noted on New Years Day, 2020, making predictions at this time of year is irresistible, risky business.
“Which may explain why many predictions are wishy-washy or soon proved wrong,” she noted.
And, of course, 2020 was the year that proved everyone’s predictions wrong (except Webster’s, actually, who predicted a banner year for the connected economy and ended up being more spot on than she could have realized at the time). But no one was predicting a global pandemic that would shutdown the travel industry, events and physical retail. No one could have predicted that consumers would reconfigure their lives around the digital-first economy to the extent that they did.
That reconfiguration has meant that the places consumers call home have had to change, too. Consumers, over the course of the pandemic, refocused how they shop, bank, work, work out, worship, eat, entertain themselves and their families, stay connected socially and even tap into healthcare services via digital channels over the web instead of in-person. Consumers have stayed home while they’ve interacted virtually with nearly every aspect of their reality.
And the changes, now in place, aren’t moving. What PYMNTS has heard in a year of interviews with experts across verticals and fields is that when it comes to the inflection point of the digital and connected economy, there is no going back. There’s only going home.
The life of the consumer is a connected one, meaning their home is almost inevitably going to follow suit. In fact, as the PYMNTS/Visa How We Will Pay 2020 study demonstrates, the transformation of the home into the new connected commerce command center is already underway. According to the experts, the pace is only going to pick up when the ball drops and 2021 gets underway.
“Habits are hard things to change, but 2020 has been a year that has seen consumers unusually receptive to not only experimenting with new ways to transact, but to actually modifying the day-in, day-out details of how they live,” said PYMNTS in October. “Because the connected consumer isn’t just talking to a voice-activated AI through a smart speaker any more. And they aren’t just asking Alexa for a weather report any more.”
The New Connected Command Center
Consumers now shop for retail products from home at nearly double the rate they did a year ago, while three times as many relocated their grocery shopping from the store to their homes. They are also increasingly turning to voice assistants to enable those purchases — 42 percent more often than they did in 2018 and 10 percent more than they did in 2019. And the physical outlay of the homes themselves are changing — they no longer contain a point or two of connection to digital interfaces like voice, but instead have digital touchpoints sprinkled nearly everywhere. Because, as it turns out, the new consumer has a defined use for all those connection points.
Home offices are rapidly becoming the primary professional workspace, as 38 percent of American adults report working full-time jobs from home. Another 45 percent say they’re working part-time from home. Workers are also shopping while they work, as 6.5 percent report making purchases while working from home. And it is not just from their desks — consumers are now doing a lot of shopping and managing their financial lives from everywhere in their homes. Seventeen percent reported they’d shopped while watching television, roughly 14 percent reported having made a purchase via mobile during the last 24 hours and 6.7 percent said they’d made a voice-assisted purchase within the past day.
And while the shift has been seen broadly across all demographics, digital-native millennials and bridge millennials are leading the charge. Such consumers come with a fair amount of disposable income — $95,000 a year on average — and built-in enthusiasm for using connected devices. (They own roughly six on average.)
And those consumers aren’t merely interacting with connected devices more or transacting more by voice because they have to. The data increasingly demonstrate that connected, contact-free commerce is increasingly the way they want to do business. And when we say millennials are the future of homes, that’s not speaking metaphorically — millennials are expected to be the driving force in the real estate market for the next decade.
The Expert Opinions
While the future no easy prediction, Amazon’s Patrick Gautier told Karen Webster, what we can expect is that that future will keep moving forward, and that we aren’t ever going back to the pre-COVID world of commerce. Multichannel commerce isn’t a niche or temporary feature — it’s here to stay, and the goal is to develop it further to better meet consumers’ needs.
“Multichannel did not start at the beginning of the pandemic — the pandemic has just shown customers that there are new ways to do more with new touchpoints,” Gauthier said. “And we anticipate that multichannel is going to be the lingua franca of retail moving forward.”
The only constant in the retail world moving forward will be constant change. More transactions will be touchless and voice-driven, and commerce journeys will hopscotch across channels in ways we’re just starting to see emerge and are advancing in ways we can’t yet predict. Gauthier said that means the only thing retailers can do is be ready to adapt. “It’s like Darwin said: The ones that die will be the ones that don’t have the ability to adapt,’” he said.
And the evolution of that smart home into the hub from which consumer actions increasingly originate means the next big opportunity in the connected home market, Ecobee CEO Stuart Lombard told Karen Webster in an interview, is the potential there to create the “home oasis,” one smart device at a time. These devices, he noted, need to act as a team — not as a series of smart-offs.
“The connected home is a lot like that today. If you walk into a house, you have an alarm panel, but it wouldn’t know anything about your thermostat or your life,” he noted, saying equipping the smart homes of today and tomorrow means integrating more functionality across fewer devices.
The physical world will not go away, Gautier noted.
“I look at all the reports, not just around the country, but around the world, of people genuinely wanting to leave their home and genuinely wanting to have human contacts again. And so this is why I do believe that the physical stores are not going away. They satisfy that fundamental need,” Gauthier said.
But the connected home isn’t going anywhere either. Because as consumers have habituated to digital lives, they’ve learned to love their digital habits — and the custom connected hubs that are increasingly allowing them.
