11 minute read 17 Jun 2020
Side view of a person working from home on a laptop

Top 10 challenges and opportunities for the COVID-19 impacted digital home

Authors

Praveen Shankar

UK&I Technology, Media and Telecommunications Market Leader, Ernst & Young LLP

Broad experience in transformation and operations. Driving the 5G agenda. Focused on tackling the most pressing and complex business and technology challenges in the industry.

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 Media & Entertainment Lead Analyst

Keen observer of all things media and entertainment. Storyteller. Avid reader. Bluff traditionalist, impatient for the future. Fan of sports, occasionally sporty. Fan of the arts, rarely arty.

11 minute read 17 Jun 2020
Related topics TMT COVID-19 Tech sector

New research reveals how the COVID-19 pandemic is dramatically impacting households’ digital activities and the relationships with their providers.

The second edition of EY’s consumer research of 2,500 households, conducted 27 May – 1 June, explores how perceptions, attitudes and needs towards technology, media and telecoms (TMT) products are changing as a result of the pandemic. In this article, we outline the top 10 challenges and opportunities facing providers and how they can ensure they stay engaged with their consumers. View the first edition of the research

1. COVID-19 continues to drive a surge in engagement in digital home activities

Lockdown measures have driven many households to engage with digital products and services for the very first time. Video calling leads the way – with 36% of consumers using it for the first time since the COVID-19 pandemic began, a figure that has grown from 18% since the end of March. Other activities, from online shopping growing 9% to 15%, to accessing online health services and watching catch-up TV, have all been adopted by more than one in ten consumers since the UK entered lockdown.

Many households are trying digital activities for the first time

Which have you done/used for the first time since the COVID-19 pandemic?

% respondents

Alongside this uptick in first-time usage, households are doing more of what they did before. Fourty-one percent are making more group video calls, 38% are using social media more often and 36% are watching more streaming TV. And it’s not just the world of online that is seeing greater traction – 25% are making more mobile phone calls and one in ten are making more landline calls. 

Digital activities hold an important place in the home

Which have you done as a result of the COVID-19 pandemic?

% respondents

ey-digital-home-stat

It is vital that providers act now to translate this higher engagement now into higher usage – and spending – once the pandemic is over. Refinements to bundles, pricing and propositions will play a crucial role in ensuring that new digital behaviours reflect greater customer confidence, not just the necessities of lockdown and social distancing.

2. Connectivity and content spend intentions beyond the crisis are promising

Increased adoption and usage of specific products and services reflect greater levels of engagement with technology in general. Twenty-one percent of consumers are more engaged with the latest technology and gadgets as a result of the crisis. This is partnered by a reduction in desire to decrease screen time. Last year, 49% of consumers were actively seeking time away from their smartphones – but this has dropped down to 29% during the crisis.

Consumers are also paying more attention to what they purchase: 27% agree that they are more engaged with communications and content services that they buy. And the spending outlook is broadly positive. Although most households see their monthly spending staying the same, more households predict their monthly spend increasing rather than decreasing after the crisis. 

It is critical for TMT providers to communicate the value of their products and services in order to capitalise on these promising spending intentions. Removing customer pain points and frustrations can support premium propositions going forward.

3. Digital well-being is front of mind as security and privacy concerns deepen

While higher levels of engagement and a resilient spending outlook translates well for TMT providers, the COVID-19 pandemic is generating uncertainties in the digital home. Online disclosure and exposure are clear concerns: consumers are more worried than before about transmitting personal data or encountering harmful content online, for example.

New digital behaviours are also creating new types of anxiety. Fifty-two percent are unnerved by the prospect of personal or professional information being captured by smart home devices, while 3 in 10 households are concerned about the potential hacking of video calls. And with these rises in anxieties, organisations are not doing enough to help, with over a quarter, 26%, concerned that businesses are not able to keep their personal data safe as a result of the situation.

Worry over smart home information capture

52%

are unnerved by the prospect of their information being captured by smart home devices

Concern over protection of personal data

26%

are concerned that businesses are not able to keep their personal data safe as a result of the pandemic

Organisations need to focus on ensuring their products and services are robust from a security and privacy standpoint – and address new anxieties emerging from the crisis. Timely and empathetic communications of the robustness of their services with the customer base will mean new digital demands long outlast the pandemic itself. 

4. Reliability is the ultimate consumer need and consistent performance is critical for households

The need for speed is important, but the EY survey data shows that the current situation has made households realise that reliability is the ultimate broadband attribute – only 11% disagree this is the case. Broadband speed and reliability are not mutually exclusive, but in a world where service providers differentiate on headline speeds, it is instructive that resilience is households’ primary concern. And this sentiment is more pronounced among younger and larger households.

With the rise in the nation working from home, apps and software are playing a vital role, 32% of all households – and 43% of under-55 year olds – have increased the amount of homeworking done via online collaboration tools since lockdown measures were put in place. However, the research shows that this trend is putting broadband providers under pressure, with 26% saying inconsistent broadband performance is making it difficult to work from home.

Refreshing the connectivity proposition to communicate value well beyond headline speed is vital to convert demand into service upgrades and build higher levels of trust with customers. Adapting your packages and customer segmentation to cater for increased homeworking needs is a must.

Broadband reliability exceeds speed - only

11%

disagree this is the case

Inconsistent broadband performance

26%

say inconsistent broadband performance is making it difficult to work from home

5. Customers and service providers don’t talk the same language in terms of network reliability

When households assess broadband reliability, achieving maximum or minimum guaranteed speeds are not the top issues. Instead, lack of buffering alongside consistent performance at different times of the day, in different parts of the house and when multiple household members are online all lead as indicators of reliability. Surprisingly, even ‘lack of network outages’ – telcos’ number one indicator of reliability – ranks below these consumer considerations. 

Network outages and customer speed promise are not the big issue – it’s all about consistent signal and consistent speeds

Which three are the most important ways in which you assess the reliability of your broadband connection?

% respondents

Adopting the customers’ mindset about the importance of reliability and aligning the customer definition of reliability with the organisation’s internal measures is key. It must be front of mind that they are looking for consistent service quality across the house and at all times of day.

6. Confusion around fibre is holding back upgrades

At a time when a new wave of digital infrastructure is emerging, consumers are finding it difficult to assess the upside promised by fibre broadband in terms of speed and reliability. Only 54% are aware of the differences between different technologies such as fibre, cable and full-fibre, while only 42% understand marketing terms such as ‘ultrafast’ and ‘superfast’ and what these types of broadband package offer in terms of speed. Crucially, awareness levels are lowest among 18 – 24 year olds, the very customers who are most likely to experience poor performance issues, and who could benefit the most from these latest packages. 

This confusion is not helping any of the UK's broadband providers – incumbents or the challengers. Evidently, only 10% of consumers want to upgrade to full-fibre but 43% would switch if better network quality was guaranteed.

Clearer articulation about what full-fibre broadband is and its benefits compared with what the customers currently use is critical. Simple and effective language that consumers understand is essential. This will empower them to make informed choices about the best package to suit their needs. Service providers, government and regulators have the opportunity to intervene, by working together to combat this sea of confusion.

Low levels of intention to upgrade to fibre

10%

of consumers want to upgrade to full-fibre

Better network quality could increase propensity to switch

43%

would switch if better network quality was guaranteed

7. Willingness to use virtual assistants has dropped since March

In the previous digital household COVID-19 survey conducted in March, nearly half of broadband users would welcome digital support channels to provide quick access to customer support. However, receptivity to automated customer services or virtual assistants has declined in the last past two months – 38% would welcome digital channels, compared with 49% previously. 

The contact centre still resonates strongly with customers – in fact 28% say they value technical support via contact centres more than before, compared with 18% who value chatbot-based self-serve features more than before. And while up to one in four customers would prefer to use chatbots over the contact centre for queries such as package alterations, payments and performance issues, 42% don’t see any queries that could be better met via instant messaging capabilities.

Service providers need to act faster to educate the consumers on the benefits of virtual assistants. Building an intelligent solution with user-friendly digital interfaces and a seamless integration with the contact centre will ensure that the overall support model is coherent, agile and effective. 

8. Positivity about public service broadcasters (PSBs) has eased-off during lockdown

As a consequence of the pandemic, the consumption of public service content rose exponentially, driven in large part by news. Forty-six percent of all households said they looked at news content more often and 30% said they relied more on PSBs for news.

In March, shortly after the government implemented lockdown measures, 77% of households identified PSBs as coping well with the crisis. This was significantly higher than the two thirds of households who thought streaming services were coping well. Fast-forward to the end of May and now only 61% of households think PSBs are coping well and in contrast streaming services have increased to 70%.  This is great news for the latter but represents a missed opportunity and a return to normal for the former.

News has and will continue to play a key role in brand building and driving traffic, but it is a mistake to rely too much on this. PSBs should look at rapidly reviewing their approach, engaging their customers and finding new ways to redefine their long-term purpose to avoid missing this opportunity.  

9. The impact of fake news runs deeper than perceived

Levels of trust in social media have remained relatively stable throughout the pandemic. In March, 17% of respondents said they trusted social media less than before COVID-19 and by the end of May, it was almost unchanged at 18%. 

Fake news is a big part of the issue – a case in point being the headlines around 5G and its health impacts. Despite reassurances from service providers and government, 25% would still be wary about using 5G in the future. It is clear that more needs to be done to both reassure consumers, as well as engage consumers in the benefits of this new technology. 

Social media companies are historically seen as responsible for tackling fake news and that’s remained unchanged since March, shifting from 67% to 68%. However, the clear takeaway is that the Government needs to step up and step in. Over the same period, perceptions of the Government’s responsibility rose from 52% to 61%.

Combating fake news requires agility, commitment and consensus. Collaboration across the ecosystem involving platforms, regulators and news providers is vital. Additionally, providers could look to the use of new technologies such as blockchain, to help with mitigating fake news and rebuilding trust.

Caution over 5G following fake news

25%

would still be wary about using 5G despite service provider and government reassurances

10. Competition is rising as streaming adoption accelerates 

According to the EY research from October 2019, the average number of content streaming services used in the home was 3.4, that has now rise to 4.2, a greater than 20% rise. The big beneficiaries are both, major global streaming services but also the PSBs, with their on-demand service up significant, especially for the two main channels.

Although a good proportion on the increase in service usage comes from free platforms, nonetheless, 25% of 18 – 24 year olds believe their spending on streaming services will increase as a consequence of the COVID-19 situation. Even digital adoption by older generations is rising fast, with 15% of over 55s having watched PSB streaming services for the first time.

Media companies need to look at their competition and scrutinise their own operations and develop a clear vision of how the market is changing and how to respond. This requires a granular understanding of their customers’ expectations, reinventing forecasting models using new tools and datasets, but it also requires the organisational structures, processes and mindset to execute.

Increased spending intentions on streaming

25%

of 18 – 24 year olds believe their spending on streaming services will increase as a consequence of the COVID-19 situation

Summary

With these signals of increased engagement and spending intentions, the time is now for providers to act. However, providers need to be wary that with anxieties on the rise and indications of digital adoptions waning, time is running out. It is vital to remain close to customers, understand their rapidly changing needs during the crisis and provide clear propositions that are simple to understand. Those who do this successfully will turn the tide to unlock new opportunities to serve customers and help the economy to grow.

About this article

Authors

Praveen Shankar

UK&I Technology, Media and Telecommunications Market Leader, Ernst & Young LLP

Broad experience in transformation and operations. Driving the 5G agenda. Focused on tackling the most pressing and complex business and technology challenges in the industry.

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 Media & Entertainment Lead Analyst

Keen observer of all things media and entertainment. Storyteller. Avid reader. Bluff traditionalist, impatient for the future. Fan of sports, occasionally sporty. Fan of the arts, rarely arty.

Related topics TMT COVID-19 Tech sector