Does growing dependence on digital worsen well-being? Does growing dependence on digital worsen well-being?

Authors
Tom Loozen

EY Global Telecommunications Leader

Fascinated by the positive impact of telecoms. Passionate musician. Enjoys educating himself on psychology, wine, sports, technology, arts and much more. Husband and father of three daughters.

Adrian Baschnonga

EY Global Telecommunications Lead Analyst

Lead Analyst with deep sector knowledge in technology, media and telecom, gained in professional services and business intelligence environments.

Martyn Whistler

EY Global Technology Sector Lead Analyst

Keen observer of all things technology. Storyteller. Avid reader. Bluff traditionalist who is impatient for the future. Fan of sports, occasionally sporty. Fan of the arts, rarely arty.

8 minute read 4 May 2021

The latest Digital Home survey reveals increased digital activities at home have escalated demand for reliable connectivity.

In brief

  • Forty-one percent of households are more concerned about the impact of the internet on well-being than they were pre-pandemic.
  • Digital fatigue drives 47% to seek downtime from internet enabled devices.
  • Value-consciousness prevails: 42% believe they pay too much for content.

The COVID-19 pandemic has dramatically altered the landscape of products and services consumed by households over the last 12 months. But even in these troubled times, there is plenty of good news, according to Decoding the digital home, our annual study of consumer attitudes toward technology. Levels of digital inclusion have increased during periods of national lockdown, with connectivity and content providers acting as a critical platform for continued socioeconomic interaction. However, long periods spent at home have also seen households question their reliance on the online world, with signs of overload and distrust also apparent. This indicates that providers must look well beyond positive adoption and usage trends if they are to make the most of their newfound importance.

  • Methodology

    Decoding the digital home is based on an online survey conducted for EY of more than 18,000 households in Canada, France, Germany, Italy, the UK and the USA. The study is produced annually, and this year’s research was conducted in December 2020 and January 2021. The survey is designed to understand changing consumer attitudes toward technology, connectivity and content experienced in the home – and the companies that provide these products and services. In this and subsequent articles we focus on issues such as the impact of the COVID-19 pandemic, network reliability, changing TV and video consumption, and customer support preferences. Additional insights and analysis are provided by EY’s global TMT team.

COVID-19 has prompted a surge in digital activities

Households have adopted a number of services for the first time since national lockdowns were imposed, and video calling leads the way, while grocery shopping and access to health and education services are going digital at pace. Younger groups typically lead in terms of first-time adoption, but older groups are playing catch-up in certain services, such as video calling of friends and family.

Chart of adoption of digital services during covid19

Connectivity and content needs are rising

Alongside this rapid shift to online products and services, households recognize that their connectivity and content needs have increased, yet greater demand is not apparent everywhere.

  • Consumers in Germany and France are more likely to disagree that their connectivity and streaming needs respectively have increased.
  • Growing reliance on the digital home has largely translated into greater engagement with the connectivity and content that they buy, although there are exceptions in France and Germany.
  • Growth in both demand and engagement is best aligned in the UK and US, indicating more responsive customers compared with other markets.
chart of Demand for connectivity and content during the pandemic

Ultimately, most households across markets agree that providers have coped well with the crisis. Connectivity providers top-score – reflecting the goodwill created by COVID-19 relief packages that offered extra data or allowed payment holidays – while social media platforms lag, highlighting ongoing challenges they face around fake news.

chart of consumer perceptions of provider performance during the pandemic

Digital well-being and data protection concerns are growing

Despite rising service adoption and largely positive perceptions of service providers, the pandemic has heightened fears regarding personal data and the effect of the internet on well-being.

Sixty-nine percent of households across markets are very cautious about disclosing personal data online. Our research reveals that the pandemic has heightened these anxieties, with 4 in 10 households more likely to be considering their digital well-being or concerned about personal data privacy compared with before the crisis, and younger groups often outscore their older counterparts.

chart of covid19s impact on digital trust and well being

Distrust of content and connectivity is a concern for many

There are also specific grievances that connectivity and content providers should tackle. More than one-third of respondents are very concerned about harmful content that their households may encounter online, and are wary about using 5G mobile, despite assurances from governments and communications service providers (CSPs) of its safety. With one-half of households favoring a very tightly regulated internet, providers may yet have to adapt to a growing compliance burden.

covid 19s impact on digital trust and well being

Rising demand and anxiety are highest among families with children

While there are variations among markets in terms of the changing digital behaviors and attitudes, what is perhaps even more striking is how the responses of specific groups tend to align across markets.

Family households with children are an important example: the positive correlation we have identified between rising demand and increasing anxiety is most pronounced in this group. All considered, the most demanding users of the digital home are also those who are most sensitive to its potential shortfalls and downsides.

Chart of digital demand and anxiety indicators among families with children

Spending intentions are encouraging

The outlook for monthly spending is broadly encouraging. There are more users prepared to increase, rather than cut back on spend, but for younger users, the outlook is more volatile, with greater willingness to both increase and reduce spend.

Chart of Spending intentions for connectivity and content services

These positive spending intentions are echoed by an interest in high-end packages, with 20% of customers open to paying a premium for super high-definition content, for example. In many cases, the pandemic is acting as a catalyst: 25% agree the crisis has made 5G more appealing while 26% believe it has highlighted the importance of upgrading to gigabit broadband. Meanwhile, 30% of households now see the benefits of taking all connectivity and content from a single supplier, with younger groups showing the greatest appetite for a “one-stop shop.”

Chart of Attitudes to purchasing all connectivity and content from a single supplier

More households are focused on savings and value for money

However, fears of overpayment and the need to control costs are more pronounced than the appetite to upgrade or spend more, as more than one-half of households see bundles as a route to savings, and 4 in 10 think they already pay too much for content.

This is a critical issue for providers since customers expect more support. Forty-two percent of households across markets don’t believe their broadband provider does enough to ensure they are on the best deal, for example. While households’ spending predictions paint a positive picture, their underlying attitudes tell a different story.

Chart of Household perceptions of overpayment and cost savings

Is the digital household at saturation point? Feelings of overload and confusion are pronounced

The research has identified tensions in the digital home, with demand partnered by anxiety. Meanwhile, positive spending profiles and openness to premium offerings are overshadowed by value consciousness, regardless of product or service.

The survey findings also suggest many households are at saturation point. Forty-seven percent seek downtime from smartphones and other internet-enabled devices. Consumers are doing more than voicing the need for “time away” from their devices, as many are opting for the familiar, while some are keen to downsize their online universe.

Chart of Household attitudes toward online exposure

Importantly, these feelings of fatigue and overexposure extend beyond products and services to relationships with service providers themselves. More than 4 in 10 households agree there is simply too much choice of different service bundles, while a similar proportion (47% average across markets) agree that introductory offers complicate their assessment of value.

Chart of Consumer attitudes toward the choice of connectivity and content packages

Trust and value concerns limit the appeal of the smart home

If service providers ignore these warning signs regarding data protection, value and digital fatigue, then new products and services will fail to gain traction. Nearly one-half of households see the ability to control white goods via devices or mobile apps as a gimmick or fad, while even more are concerned about potential security flaws. Just one-quarter think smart home products are reasonably priced. Unless addressed, these attitudes will hamper adoption rates of smart home services.

Chart of Household attitudes toward smart home

What does this all mean for technology, connectivity and content providers? 

  1. Build on your newfound prominence with consumers

    Providers have a unique opportunity to make the most of the goodwill they have created during the pandemic. Consumers may think that providers have coped well during the crisis, but there’s a difference between coping well and delivering better. While demand has risen, positive engagement with service providers isn’t guaranteed, so now is the time to construct a new kind of relationship based on confidence and trust.

  2. Keep it simple: reduce customer overload and improve well-being

    Interaction with the digital world has increased but this dependency is fueling anxiety, as many households feel overwhelmed with everything that’s on offer. A more manageable digital universe is vital, and providers should reassure customers and communicate with empathy, as simple and intuitive services will reduce customer fatigue and make you stand out. Better collaboration can also help provide industry-wide solutions to well-being challenges.

  3. Overhaul your traditional customer assumptions: don’t take "digital natives" for granted

    The forced shift to digital has uncovered pain points that disproportionately affect certain groups. Younger groups are not always “digital natives.” In fact, they outscore older groups on data protection fears driven by the pandemic. Families with children encapsulate the tension in the digital home where higher demand is partnered by a greater well-being challenge. Resolving these pain points is essential, as these groups are prepared to spend more for the right products and services.

  4. Deliver new forms of value to convert higher demand into enduring growth and loyalty

    Looking ahead, there are signs of interest in service upgrades, supported by a resilient spending outlook, yet the desire for value is present everywhere and these deep-rooted attitudes may have more say in customers’ future spending levels. Ultimately, customers need better rationales to spend more. New value propositions, supported by tangible customer promises, will help attract, satisfy and retain customers in the long term.

Summary

The COVID-19 pandemic has driven greater reliance on the digital home. The good news is that service adoption is rising, households think providers have coped well and spending intentions are promising. So, what’s the bad news? Anxiety and overload are on the upswing – and households are seeking value wherever they look. Providers need to meet these new demands and solve these emerging pain points to make the most of their newfound prominence with customers.

About this article

Authors
Tom Loozen

EY Global Telecommunications Leader

Fascinated by the positive impact of telecoms. Passionate musician. Enjoys educating himself on psychology, wine, sports, technology, arts and much more. Husband and father of three daughters.

Adrian Baschnonga

EY Global Telecommunications Lead Analyst

Lead Analyst with deep sector knowledge in technology, media and telecom, gained in professional services and business intelligence environments.

Martyn Whistler

EY Global Technology Sector Lead Analyst

Keen observer of all things technology. Storyteller. Avid reader. Bluff traditionalist who is impatient for the future. Fan of sports, occasionally sporty. Fan of the arts, rarely arty.