To connect or not to connect—that is the question facing consumers. While the convenience, cost savings and sheer fun of a connected lifestyle is appealing to most shoppers, there is also a palpable anxiety associated with relying on connected devices to handle everyday tasks.

The good news is that when U.S. consumers do purchase connected products, they prefer to buy them from a retailer or e-retailer. That’s the word from “Connected Future: Navigating Promise and Risk,” a recent survey we did on consumer attitudes toward internet-connected products.

Jeff Unterreiner, senior vice president, Global Connected Living, Assurant

Connected products are predicted to grow exponentially over the next several years; so, who’s buying them? The survey identified five categories of consumers, listed from most to least connected:

• Technophiles (5 percent) embrace all kinds of consumer tech innovation.
• Home Protectors (12 percent) find peace of mind with connected control.
• Convenience Seekers (21 percent) have a utilitarian interest in chore reduction.
• The Entertained (24 percent) selectively choose a few engrossing products.
• The Unconnected (39 percent) use a minimum of tech products, and do so reluctantly.

While consumers are fairly spread out among these five categories, it’s important to note that the smallest three segments—totaling at less than 40 percent of consumers—account for nearly two-thirds of all connected product purchases.

Also, what’s clear across all groups is that fears and frustrations are causing consumers to pause before purchase, and are contributing to a post-purchase engagement gap that many retailers are not yet addressing with today’s products and services.

Consumer fears spike when they learn of cyberattacks and data breaches that involve internet-connected gadgets and appliances. More than half of the respondents were either “terrified” or “very concerned” about identity theft (65 percent) and cyberattacks (62 percent). Forty-six percent went so far as to say they would be less likely to purchase connected products.

As for frustrations, when asked about the biggest aggravations with connected products they already own, respondents cited the high expense of product repair or replacement, performance issues and lack of self-help for troubleshooting problems.

This may be due to the little or no post-purchase support customers receive from retailers regarding installation, maximizing product usability, technical support and interoperability between connected products.

So how can retailers better support their customers in addressing these challenges?

The survey results offer some clues. For instance, 61 percent of those considering purchasing a connected product would be more likely to buy it if it came with a two-year warranty, insurance and/or on-demand tech support.

Technophiles in particular are most likely to add additional protection and support services for themselves and their purchases. They also experience half the level of fear and frustration associated with a connected lifestyle than the broader population.

In a retail market where customer experience is overtaking price and product as a key brand differentiator, such value-added protection and support services can play a vital role in improving customer loyalty, retention and engagement.

Looking deeper into the characteristics of those who purchase product protection plans, extended warranties and live technical support, segmentation of the survey results uncovered three distinct buyer groups. Devoted buyers make up 10 percent of the market and, in 2016 purchased an average of nearly seven value-added services. These buyers are more likely to live in a rural area, be younger in age and have children.

Moderate buyers, who purchased an average of 3.3 value-added products last year, make up 25 percent of the population. They tend to be of retirement age and live in urban areas.

Infrequent buyers are the largest group (65 percent) and only purchased an average of 1.1 products in 2016. They are more likely to live in suburban areas, be female and middle-aged, and be unemployed, a student or a homemaker.

Millennials, in particular, are more inclined to purchase extended warranties on technology than other generations. Another Assurant study revealed that nearly two-thirds of people ages 25-34 believe extended service contracts are an important part of a consumer electronic purchase.

Given millennials’ comfort with technology and the predictions that connected devices will grow to upwards of 25 billion by 2020, the question of whether or not to connect likely will become moot. As the preferred purchase destination for these products, retailers have a unique opportunity to take advantage of connected lifestyles and build shopper loyalty through a superior post-purchase customer experience.

The Assurant Solutions unit of Assurant provides extended service contracts and other risk-management products.