Understanding the adoption and willingness to pay for internet of things services

Abstract

AbstractInternet of Things (IOT) involves devices that can interact with one another by connecting to the internet and sending information, ultimately improving human lives. This research is one of the first in literature that seeks to understand the variables that influence consumer adoption of IOT products offered as services against a monthly premium. The influence of value dimensions on IOT on its adoption and consumer willingness to pay a premium was studied. A sample consisting of 1623 responses collected through an online survey was analysed using partial least squares structural equation modelling. The moderating role of age groups, gender and income levels was also analysed. Out of sample prediction and overfitting of the model were used to assess predictive validity both for the full data set and across groups using PLS Predict. Perceived playfulness, personal innovativeness and convenience value were the most significant variables affecting attitude and intention to use IOT services. Attitude mediated most relationships in the model. Moderation analysis using demographic variables of gender, age groups and income levels revealed significant differences in the strengths of the relationships in the model. Predictive validity assessment with PLS showed revealed high predictive power of the model for adoption outside the selected sample. The results can help marketers segment and design business strategies to expedite the diffusion and adoption of the technology in the market. The need for a shift in the B2C IOT market from product‐centric to a product‐as‐a‐service business to maximize value to consumers is thus proposed.