Factors affectingresistance to smarthome technology : An application of innovation resistancetheory in the European smart homemarket

Abstract: Smart home technology was first conceptualized in 1989 and has extensively been promoted for many years ever since. However, even after 30 years since conceptualization, the technology has seen very low penetration levels and consistently missed all market forecasts. The objective of this thesis is to identify different reasons as to why smart home technology has not been adopted yet using innovation resistance theory. We use the innovation resistance framework by Ram and Sheth (1989) and exploratory research to identify all possible reasons for consumer resistance. We then conduct a quantitative study, by sending out online surveys to consumers, to identify which of these factors cause the highest resistance. Multivariate linear regression and other statistical methods were used to analyze the quantitative data. Physical risk, the real-world risks of adopting this technology (including privacy and cybersecurity risks), was the most important barrier to adoption. This was closely followed by economic risk, the risk associated with buying a device, installing it, and paying a monthly subscription fee for it to work. To increase adoption, smart home manufacturers should try to reduce these risks to kick start mass adoption. Because economic barrier includes multiple latent variables (representing different phases of the product), further research is needed to identify which of these different latent variables lead to higher economic resistance. We hope that this study can be used as a guide to help smart home manufacturing companies identify consumers’ most important pain points.