Internet of Things

Sizzle/Fizzle: The IoT Is Sizzling, Household Debt Is Fizzling


Cash in Japan: We’ve spoken in this space before about how cash is not dying but merely slowing down in certain countries. In Japan, the pulse is quickening. Cash use has, in fact, doubled over the past two decades. Meager savings rates show that the Japanese like keeping coins and bills in pockets rather than banks. That’s a boon for the security companies that lug the stuff around and put it in banks and ATMs in the first place, before it can be dispensed to be hidden, perhaps, in mattresses.

IoT: In a study conducted jointly by Visa and PYMNTS of about 2,600 U.S.-based adults, 80 percent said they would like to use connected devices to make shopping less tedious. That’s good news in an age when the average person has more than four devices at their disposal, ranging from game consoles to voice-controlled assistants. The shopping methodology is catching on; as of 19 categories measured, 11 of them saw more than half of consumers making purchases online.

Grocery options: eCommerce spat in aisle one? The battle over kiosks, online grocery ordering and delivery has yet to shake out — and whether Amazon wins, or Walmart wins, or someone else wins is anyone’s guess. But consumers are enjoying a bounty of choices in how they get their grub via eCommerce, and might the way to a consumer’s brand and even online loyalty be through their stomach?


Macy’s: On the heels of yet another margin warning, this time on gross margins — earlier this week, the stock of the retailer was off 7 percent (and change!) in a single day, to less than $20 a share, notching a loss of more than a third since the beginning of the year. The company is out to monetize its real estate assets, which begs the question of what happens when the bricks are finally mined for cash as eCommerce (and also Macy’s discount business) efforts still have a ways to go.

Bitcoin: Easy highs, easy movements off easy highs. Seems like yesterday that the cryptocurrency was touching a price point of just around $2,900. But then Mark Cuban showed, via tweet, the thin ice on which this cryptocurrency pricing skates. After a series of tweets questioning valuation, the price slipped to roughly $2,700 per bitcoin. Still lofty, but if you bought at the top, you might wish that Cuban keep his thoughts — and a-twitterin’ thumbs — to himself.

Debt: Household borrowing, and consumer debt as a whole in the United States, has reached $12.7 trillion. That is a record and is not necessarily the record you want to see when GDP growth is rather languid and interest rates are due to rise, making debt more expensive. Public Storage has said that consumers are stressed, and firms like Capital One are shoring up loan loss reserves.

Sizzle Of The Week: The Internet Of Things

Everyone has heard the prediction or some variation on it: 20 billion by 2020.

For those playing PYMNTS Jeopardy at home, the question is, “How many connected devices will be in the global marketplace in 2.5 years, Alex?”

Given the widely predicted and expected explosion, experts and analysts everywhere have felt comfortable making a prediction that connected devices are primed to be the “next big thing” across an awful lot of verticals.  The connected future is almost universally understood to be coming soon to an everywhere near you.

And while we would not go so far as to say that conventional wisdom is wrong on this point, the new data out this week from the How We Will Pay study commissioned by Visa and conducted by does seem to make it clear that a slight modification to that conventional wisdom is needed.

The connected future isn’t on its way — so much as it is kind of already here. It’s got a lot of growing up to do and a lot of function to develop before it is both living up to consumers everyday expectations and wildest dreams — but the question isn’t whether or not it is actually coming.  The question is now that it’s here — and obviously enjoying an heroic growth spurt — what’s next?

A Sizzle By Every Count

The most surprising headline figure from the report is just how connected consumers already are.  All in all, 75 percent of consumers have a connected device (that isn’t a phone, laptop, or tablet), and the average number of connected devices owned by consumers is 4.4.

Video game systems represent the most popular type of connected device behind what is now “mainstream” — smartphone, tablet and computer — with 47 percent of respondents noting ownership, followed quickly by activity trackers, which were owned by 41 percent of consumers.

Voice-activated speakers (like Amazon’s Alexa and Google Home) were owned by 14 percent of consumers, though it is worth noting they were only slightly behind smartwatches at 15 percent, which have been in the market nearly twice as long. Also worth noting: Both categories of device were favored by the connected device “super-user” category, who owned six or more connected devices and represented roughly a quarter of all respondents.

Super Connected consumers, as the name implies, skewed toward early adoption across the board — and also favored categories like connected cars — but they are interestingly not demographically remarkable in any other way. Age, income and household size does not define the profile of a connected consumer — rather, other socioeconomic attributes do. Connected Home consumers favor devices that support home-based activities like smart appliance control or gaming, while Connected Me users valued portability and tended to favor wearables.

Apart from the simple volume of devices proliferating in the environment, consumers are also increasingly upbeat about the potential for a more fiction-free connected shopping future using those devices.

Nearly 60 percent of respondents reported that shopping — whether they do so via eCommerce or in a store — and paying are “inefficient, unproductive, time consuming” and begging for improvement.  Moreover, 83 percent of respondents reported that connected devices and commerce had at least a strong potential to eliminate friction from how they buy and pay for things — both online and offline. A full 44 percent said they’d long for the day when they could avoid checkout all together in-store and at the pump by simply walking out of the store or driving away once their shopping — or pumping — was done.

Room To Grow

As bullish as consumers are in the future of connected buying and paying, they have trouble seeing how the devices they own today will deliver that experience, one that they increasingly believe can happen contemporaneously while doing other things — commuting, cleaning, taking care of the kids, even eating breakfast.

More than 60 percent of consumers don’t think the most commonly owned connected device — the smartphone — will do it. And while only 14 percent of consumers think a smart car can, it is amazing that as many as 14 percent do, given the relative newness of the concept.

Our big takeaway — and yours, too — should be this: It’s been less than a decade since Apple launched the App Store and introduced the world to a connected device capable of doing everything that a consumer’s laptop could do, making commerce portable and the lines between the online and the offline worlds blurry. Since then, the consumer’s appetite to use mobile devices in a variety of activities has opened the floodgates of innovation and reshaped how commerce and payments are done. The fact that 14 percent of consumers own a device that they can talk to and use to order everything from a pizza to flowers in a little less than three years is evidence of their appetite to embrace as much innovation in this area as innovators are willing to throw at them.

Provided, of course, that it solves a real problem for them. And with more than 60 percent of consumers telling us that shopping is an unproductive necessary evil, there’s a lot of room for innovation to flourish.

It’s hard to call that anything but a sizzle.

(Read the full report, How We Will Pay, here. Or Karen Webster’s deep dive on the data and what it all means here.)


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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