'Wired' households ready for networking according to national survey

NORTH SALEM, N.Y., Sept. 19, 2000 — Now that a majority of U.S. homes have computers and Internet access, a new national survey finds consumers ready to take the next step — namely, linking their electronic devices together in home-based networks and using their computers to communicate with appliances and energy control systems.

This increasing receptivity spells opportunity for computer and major appliance manufacturers, who are preparing to launch new "thinking" devices during the Fall shopping season. Likewise, utilities have a business opportunity through the adoption of power line communications applications -- in effect, using the wires into the home to deliver additional services to customers.

Ironically, interested shoppers expect to turn to traditional bricks-and-mortar retailers for these new devices, according to the survey. By a 2-1 margin, these consumers favor name brand showrooms and warehouses over on-line channels for the purchase of advanced appliances.

While finding consumers more optimistic about their own outlook, the same survey traces a sharp drop in consumer trust of electric utilities. Less than three in 10 residential customers -- 29 percent -- say they trust their electric supplier, a statistically significant decline from the 35 percent recorded just six months ago.

Moreover, the survey finds a high awareness of environmental issues on the part of residential consumers that cuts across all segments of society. Concerned about air and water quality, respondents believe that emissions reduction must be a national priority. In an important finding for this election year, residential customers say that government, consumers, and energy companies must share the costs of generating cleaner electricity.

These results are part of the midyear national assessment of residential customers conducted by RKS Research & Consulting, a nationwide market research and public opinion polling firm. RKS interviewed 1,024 heads of households across the U.S. between mid-May and June 2 of this year. In addition, residential customers provided additional insights in focus groups held in St. Louis, Philadelphia, and Portland, Ore.

Personal computers and on-line communications are now fixtures in American homes, according to the RKS survey. More than six in 10 homes now include at least one computer, and three quarters of these homes are connected to the Internet. Nearly one in five American homes -- 19 percent -- have more than one computer, and one in 10 of these households shows interest in a home network that would link multiple computers and peripheral devices.

As evidence of increasing interest in interactivity, one in five -- 20 percent -- of consumers surveyed say they would be interested in purchasing smart appliances. Another 19 percent remain neutral but receptive to the idea. Consumers respond most favorably to the ability to use existing wiring, ease of use, and warranties related to smart devices, according to the RKS study.

The same survey shows continued increases in consumer use of the Internet for shopping, research and bill payment. Nine in ten regularly use electronic mail, and six in 10 communicate with merchants or financial institutions on-line. Close to 20 percent now use the Internet for their personal banking and investing.

In an encouraging development for online alternatives to traditional utilities, the data indicate growing residential interest in using the Internet for communicating with energy suppliers. In particular, residential customers register higher levels of interest in specifying their bill due date, obtaining energy usage information, and paying electricity bills on line.

"These findings, taken together with the focus group discussions, demonstrate that consumers are now comfortable with doing business with companies electronically and are looking for more in the way of convenient and customized features," said David Reichman, RKS president. "Given the rapid run-up in these scores in just six months, energy companies need to build on their established brand identity or risk being left behind as competition increases."

Energy companies also have to face the issue of declining consumer trust, according to the RKS study. Fewer residential customers deliver high marks for trusting their provider, and the overall rating on a 0-10 scale is 6.62, down from 7.14 just six months ago.

In addition, the RKS survey found deep concern among consumers about the environment. Nearly seven in 10 -- 69 percent -- believe that emissions reduction must be a major national goal. And nearly the same majority -- 66 percent -- say that the costs of environmental protection need to be shared by citizens, energy companies, and the government. And further analysis indicates that consumers do not give energy suppliers high marks for environmental stewardship.

"This finding could level the playing field for new entrants in energy markets," Reichman noted. "Although they must invest heavily to establish a brand identity, dot-com suppliers and national marketers are not identified with power plant emissions in the minds of consumers. This advantage, added to their electronic prowess, gives the new suppliers a fighting chance to gain market share from traditional utilities."

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