WEBINAR The State Of Consumers And Technology, 2016 Gina Fleming, Manager, Data Science September 12, 2016. Call in at 12:55 p.m. Eastern time

Understanding your audience is the first step toward customer obsession.

True or false? Millennials are the prime target for marketers.

Answer: It depends Gen Zers (18-27) Gen Yers (28-36)

Gen Yers spend the most while Gen Zers spend little online

When combined, Boomers make up the largest age group

We are living in an increasingly connected world.

Consumer connectivity is evolving in two key ways 1. The devices we use 2. The way we access content

Consumers of all ages connect on multiple devices

Past years built up momentum for wearables In 2014, 45% of US online adults agreed with the statement, “I am intrigued by the prospect of getting a wearable device.” In 2015, 21% of US online adults used a wearable device. Source: Forrester’s North American Consumer Technographics® Consumer Technology Survey, 2014 and 2015

Companies like Fitbit, Apple, Samsung, and Microsoft have established a base of initial customers

But consumer interest in wearables is waning

MROC Insights -- Why wearables numbers are going down: Wearables are given as gifts: "I got a FitBit free from Kelloggs Cereal last year and I never took it out of the box. I just had no use for it."  The devices are still in their awkward growing years: "I bought a FitBit to remind me to get up from my desk. I stopped wearing it because it didn't function as expected. I purchased a bluetooth bracelet before the Apple Watch was available. I expected it to alert me to calls when I was in loud places, but it didn't matter if I was alerted because I still had to answer the phone in a loud place. I am interested in the Apple Watch once it's functionality is more mature. I think these devices will be great one day, but are currently in their infancy."  Today's devices lack functionality and design: "I have noticed fewer people wearing the devices and for most the novelty has worn off. Most devices are expensive and not very attractive. Wearable devices are fun, some offer you a mini computer on your wrist, but they are not always accurate and limited in functions, especially for people who are techie or true athletes." Consumers don't perceive unique value: "Why wear a watch when I carry my phone with me? Why pay the same for a smart watch as I did my iPhone? I don't need two devices. I associate wearables with fear (because they might scratch or break), and guilt (because why did I buy one when I already have a phone?)" "These days I am more reluctant than I used to be to acquire the 'next new thing' without a firm belief that it will truly add to my life experience."  Today's products aren't improving fast enough: "I once tried a pedometer to measure the number of steps I took in a day but soon got tired of it. It was more difficult to use than was warranted by the results. Once you have a clear idea of how many steps are in your usual activities the device becomes superfluous anyway."  "I think that people love the idea of these products but then soon get bored! It is the same with most new products. I would only buy another one if it required less work to put in the data. Otherwise I would never use it to the full potential. Wearables are also expensive and there are so many different alternatives such as apps on your mobile. I would describe them as a fad, unnecessary and expensive." NOTE: A handful of people do have wearables success stories when there is a sense of emotional fulfillment: "I’ve used a smartwatch for about a year. I’d hate to be without one now. I rarely need to take my phone out of my pocket. For example, if I receive a text, I can reply to it either by selecting from a set of standard options presented on my watch or by speaking my response. And I can create a shopping list using Google Keep, display it on my watch, and tick off the items as I buy them. Also, I get turn-by-turn travel directions on it, and can control all my audio-visual gear from it. I associate my wearable with confidence because it just works. My watch hasn't done anything untoward or failed to act in the expected way. I also associate it with contentment, because I never have to worry about it, reset it, deal with unexpected behavior. And, I associate it with delight, because when I get an email while walking the dog in the pouring rain, I don’t have to struggle with my waterproofs to get at my phone, just look at my wrist." When asked, consumers give a multitude of reasons for losing interest in wearable devices

Some received them as gifts “I got a FitBit free from Kelloggs Cereal last year and I never took it out of the box. I just had no use for it.” Base: US online adults; Source: Forrester's ConsumerVoices Market Research Online Community, Q3 2016 (US, UK, Canada)

Others say they have lost appeal “I have noticed fewer people wearing the devices, and for most, the novelty has worn off. Most devices are expensive and not very attractive. Wearable devices are fun, some offer you a mini computer on your wrist, but they are not always accurate and limited in functions, especially for people who are techie or true athletes.” "I once tried a pedometer to measure the number of steps I took in a day but soon got tired of it. It was more difficult to use than was warranted by the results. Once you have a clear idea of how many steps are in your usual activities, the device becomes superfluous anyway.” "I think that people love the idea of these products but then soon get bored!” Base: US online adults; Source: Forrester's ConsumerVoices Market Research Online Community, Q3 2016 (US, UK, Canada)

Some don’t perceive unique value "Why wear a watch when I carry my phone with me? Why pay the same for a smartwatch as I did my iPhone? I don't need two devices. I associate wearables with fear (because they might scratch or break), and guilt (because why did I buy one when I already have a phone?)” Base: US online adults; Source: Forrester's ConsumerVoices Market Research Online Community, Q3 2016 (US, UK, Canada)

Success with wearables comes from multifunctional utility "I’ve used a smartwatch for about a year. I’d hate to be without one now. I rarely need to take my phone out of my pocket. For example, if I receive a text, I can reply to it either by selecting from a set of standard options presented on my watch or by speaking my response. And I can create a shopping list using Google Keep, display it on my watch, and tick off the items as I buy them. Also, I get turn-by-turn travel directions on it, and can control all my audio-visual gear from it.” Base: US online adults; Source: Forrester's ConsumerVoices Market Research Online Community, Q3 2016 (US, UK, Canada)

Wearables will evolve to stay relevant

Consumer connectivity is evolving in two key ways 1. The devices we use 2. The way we access content

Online TV viewing has hit a critical mass

In 2016, 80% of US online adults watch TV online

Why do people watch TV online? To watch on my own schedule To catch up on an episode I missed of a show I regularly watch So I can watch it anywhere So I don’t have to sit through commercials To try out shows I haven’t watched before Base: US online adults 18+ who have watched online video; Source: Forrester’s Consumer Technographics North American Consumer Technology, Media, And Telecom Online Benchmark Recontact Survey 1, Q3 2016 (US)

Not yet cannibalizing regular or “offline” TV Only 15% of US online adults have “cut the cord.*” *Discontinued my paid TV service to watch TV over the internet exclusively

But has potential to in the future 35% of consumers ages 25-34 plan to cut the cord in the next six months. 12% of consumers ages 25-34 are “cord-nevers.” Source: Consumer Technographics North American Consumer Technology, Media, And Telecom Online Benchmark Recontact Survey 2, Q3 2016 (US) and Consumer Technographics North American Consumer Technology, Media, And Telecom Customer Lifecycle Survey, Q2 2016 (US)

What it means Consumer technology usage is constantly evolving. Consumers’ needs determine the success of new technologies and those needs are not always straightforward. Therefore, it’s important to develop a full understanding of your customers’ needs and behaviors to be customer-obsessed. Forrester can help!

There is much more to discover about consumer technology and behaviors. Contact us at data@forrester.com for more information.

What is Consumer Technographics? DEEP, CUSTOMIZABLE AND TRENDED INSIGHTS OF DIGITAL CONSUMERS Quantitative Insight from >400,000 consumers across 19 Global Markets Customizable Views of consumers based on: region, brand, demographics, and more Dedicated Insights personnel to help derive insight and gain maximum value from the data Trendable Data on technology adoption, behavior, attitudes Actionable Frameworks developed by Forrester thought leaders contextualize digital consumers’ actions

Forrester’s Consumer Data Industry-specific topics Healthcare | Financial Services | Travel | Auto | Retail | Media | Consumer Technology Behaviors, Attitudes, and Motivations Technology use and preferences | Technology attitudes | Drivers/barriers | Life stage/ life style| Psychographics Brands Ownership | Interaction | Perception | Loyalty | Customer experience Adoption and Engagement Device ownership | Emerging technologies | Social media engagement | Mobile engagement Consumer Journey Discover | Explore | Buy | Use | Ask | Engage

Gina Fleming +1 415-294-8139 gfleming@forrester.com