Internet of Things

A Holly, Jolly – And Connected – Christmas

Merchants Omnichannel Holiday

There will certainly be many sales to choose from once the Thanksgiving dinner dishes have all been cleared and the Black Friday festivities begin at retail locations nationwide.

But this year, there is something slightly different in the mix.

We are about to have a very connected Christmas. Or, more appropriately, a very connected New Year – on the assumption that most people will be shopping for gifts that won’t get their first official test drives until the last week of 2017.

A development that is filling the U.S. consumer with a lot of yuletide cheer – not only for themselves, but for those around them, many of whom will be the recipients of those connected device gift boxes.

Making It Easy To “Connect The Halls”

The unsurprising push in the Black Friday connected commerce deal is coming from the resident power players: Google, Amazon and their voice-activated speakers. Both are deeply discounting their devices on their respective eCommerce sites. But, as it turns out, shoppers can’t assume the home site is necessarily the best deal. For example, one could buy an Amazon Echo Show from Amazon for $200 this Black Friday – or they could pay either Best Buy or Target $50 (and, in Best Buy’s case, get a free gift thrown in for their trouble).

But beyond the home speakers, there are a number of connected devices beckoning gift seekers. Retailers galore are hoping to lure shoppers with a wide array of kitchen gadgets, smart lighting kits, smart speakers, Wi-Fi robot vacuums, connected security kits and more. Whether it is an appliance or a wearable, rest assured that someone is looking to connect it to the internet and sell it to you this holiday season.

Honorable mention in this category goes to Best Buy, which is probably carrying the most extensive and varied array of IoT devices – with the deepest embedded discounts.

So, why the mad rush?

Well, it’s the smart bet, by the numbers.

Research firm Gartner predicted that 8.4 billion connected “things” were in use in 2017 – up 31 percent from 2016 – and that the average home will have as many as 50 connected devices by 2020. According to Qualcomm’s Wi-Fi router consumer survey of European IoT users, consumers who use connected devices tend to use a lot of them, often at the same time. According to Qualcomm’s figures, 50 percent of those surveyed said they use a device in three different rooms simultaneously.

That data is directly borne out by PYMNTS/Visa’s data from the How We Will Pay survey, which indicates that as many as 75 percent of consumers already had a piece of smart technology other than their phone, with the average connected consumer having four or more. The survey also notes that 83 percent are open to the idea of using connected devices to reduce payments friction in their lives.

Sharp Differences Of Opinion

While consumers are enthused to enrich their own lives with the benefit of connected experiences, here in the U.S., there is also a sharp enthusiasm for passing that love of smart objects onto our children.

A new Amazon-backed U.S. study from Washington-based international nonprofit Family Online Safety Institute (FOSI) has found that 70 percent of parents are comfortable with their child having a connected device or toy. The survey also found that almost half (45 percent) of parents of connected children reported that their children have least three connected devices.

Connected parents reported feeling comfortable with their kids’ connectivity at a 97 percent rate, whereas the parents of the less connected are, unsurprisingly, less comfortable (though, at 60 percent, perhaps more comfortable than one might assume).

And though the U.S. parents surveyed in that data set did note that privacy and security were primary concerns surrounding their kids’ connectivity, the attitudinal outlook is quite different in Germany.

Last week, a German regulator banned domestic sales of children’s smartwatches that have a listening function, warning that parents have been using the devices to secretly eavesdrop on teachers at their kids’ schools.

The watches, which are marketed to children ages five to 12, can reportedly be affixed with an app that turns them into listening devices for parents – and, according to German regulators, essentially turns the devices into an “unauthorized transmitting system.”

Back in February, the same federal agency banned sales of an internet-connected doll called My Friend Cayla, as German law bans making or selling any recording device that is disguised as another object.

The regulator has further asked parents to destroy any devices they have bought, and asked schools to be on the lookout for smartwatches. If they are found to be verboten, schools are asked to request that parents destroy them.

But while that step may seem extreme, it does bear noting that perhaps Americans’ extreme comfort with the IoT could at least bear some realism about the state of global cybercrime.

The world of connected devices is also an attractive target for malicious actors, as consumers often place weak security settings on devices that make them particularly vulnerable to takeover.

Furthermore, devices taken over in tandem can lead to very serious breakdowns in the digital order.

IoT cameras were a primary vector for the Mirai botnet attack that managed to cripple Twitter, Netflix and PayPal in a single shot in 2016.

And while that was the most attention-getting IoT-enabled bot attack so far, it almost certainly won’t be the last.

Criminals and commerce centers have that in common: They like to go where customers are already hanging out.

Which isn’t to say we shouldn’t enjoy our very special connected Christmas – that would hardly be fair to the retailers who worked so hard to bring it to us.

Besides, tomorrow, when you’re cooking a turkey and Alexa tells you a joke while your Roomba does the vacuuming for you, a connected world will probably feel pretty good, despite the risks.



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.