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Substitution or augmentation? Understanding customers' reactions to IoT-applications

(2018)
Author
Organization
Abstract
Rapid technological advancements, such as the Internet-of-Things (IoT), digital B2B platforms, and mobile applications, are changing the nature and the delivery of services. Embedding smart technologies, such as sensors and software, in everyday products connects them through the IoT to each other and to the customer via mobile applications. A multitude of examples of smart objects have yet been developed, making the topic relevant and compelling. Boston police, for example, is already using smart city applications, such as sensors and camera’s, to create a real-time crime center. Digitizing objects enables them to deliver a special kind of innovative services, which are being referred to as smart services. In line with the ASO theory, technologization adds an augmentation and support layer to the service product. Considering the profound impact this has on the service delivery, the reconsideration of adoption models in the literature in light of the distinctive nature of these service innovations is considered as a research priority. The authors adopt a new perspective by considering the aforementioned digitalization layer as a way to either augment or substitute both the customer and the employee, resulting in a two-by-two matrix. In addition, a holistic perspective is employed by not only taking aspects into account that foster adoption (benefits) as is done in mainstream adoption and diffusion literature, but also the factors inhibiting customers intention to adopt the innovation (barriers). Although prior research has acknowledged the importance of price in a customer context considering their accountability to bear the price, the concept is still underexplored. Therefore, we integrate price as an outcome variable considering the customer perspective of this inquiry that is in contrast with a multitude of preceding research in an organizational context. The aforementioned service innovations create opportunities for servitization in myriad sectors, among which the automotive industry. Car constructors, such as Volvo and Audi, are currently developing self-driving and smart cars by implementing smart technologies (sensors, software, etc.) into vehicles. Consequently, smart services related to cars are being developed. The situations for the survey are based on these real life examples or combinations conform the matrix. The selection of the constructs, both benefits and barriers, is based on literature and on explorative interviews and analyses of social listings. To test the conceptual framework we conduct a quantitative study of which the survey items are based on validated scales from previous literature in combination with new constructs and items from the interviews and social listings. Drawing on the results from the qualitative and quantitative studies, conclusions and managerial recommendations will be conducted concerning benefits and barriers that influence customers’ adoption and price intentions towards smart services enabled by technology innovations that augment or substitute customers’ and employees’ roles.
Keywords
Internet-of-Things (IoT), smart services, customer adoption, substitution, augmentation

Citation

Please use this url to cite or link to this publication:

Chicago
Henkens, Bieke, Katrien Verleye, and Bart Larivière. 2018. “Substitution or Augmentation? Understanding Customers’ Reactions to IoT-applications.” In .
APA
Henkens, B., Verleye, K., & Larivière, B. (2018). Substitution or augmentation? Understanding customers’ reactions to IoT-applications. Presented at the Frontiers in Service Conference 2018.
Vancouver
1.
Henkens B, Verleye K, Larivière B. Substitution or augmentation? Understanding customers’ reactions to IoT-applications. 2018.
MLA
Henkens, Bieke, Katrien Verleye, and Bart Larivière. “Substitution or Augmentation? Understanding Customers’ Reactions to IoT-applications.” 2018. Print.
@inproceedings{8606793,
  abstract     = {Rapid technological advancements, such as the Internet-of-Things (IoT), digital B2B platforms, and mobile applications, are changing the nature and the delivery of services. Embedding smart technologies, such as sensors and software, in everyday products connects them through the IoT to each other and to the customer via mobile applications. A multitude of examples of smart objects have yet been developed, making the topic relevant and compelling. Boston police, for example, is already using smart city applications, such as sensors and camera{\textquoteright}s, to create a real-time crime center. 
 
Digitizing objects enables them to deliver a special kind of innovative services, which are being referred to as smart services. In line with the ASO theory, technologization adds an augmentation and support layer to the service product. Considering the profound impact this has on the service delivery, the reconsideration of adoption models in the literature in light of the distinctive nature of these service innovations is considered as a research priority. The authors adopt a new perspective by considering the aforementioned digitalization layer as a way to either augment or substitute both the customer and the employee, resulting in a two-by-two matrix. In addition, a holistic perspective is employed by not only taking aspects into account that foster adoption (benefits) as is done in mainstream adoption and diffusion literature, but also the factors inhibiting customers intention to adopt the innovation (barriers). Although prior research has acknowledged the importance of price in a customer context considering their accountability to bear the price, the concept is still underexplored. Therefore, we integrate price as an outcome variable considering the customer perspective of this inquiry that is in contrast with a multitude of preceding research in an organizational context. 

The aforementioned service innovations create opportunities for servitization in myriad sectors, among which the automotive industry. Car constructors, such as Volvo and Audi, are currently developing self-driving and smart cars by implementing smart technologies (sensors, software, etc.) into vehicles. Consequently, smart services related to cars are being developed. The situations for the survey are based on these real life examples or combinations conform the matrix. 

The selection of the constructs, both benefits and barriers, is based on literature and on explorative interviews and analyses of social listings. To test the conceptual framework we conduct a quantitative study of which the survey items are based on validated scales from previous literature in combination with new constructs and items from the interviews and social listings. 

Drawing on the results from the qualitative and quantitative studies, conclusions and managerial recommendations will be conducted concerning benefits and barriers that influence customers{\textquoteright} adoption and price intentions towards smart services enabled by technology innovations that augment or substitute customers{\textquoteright} and employees{\textquoteright} roles.},
  author       = {Henkens, Bieke and Verleye, Katrien and Larivi{\`e}re, Bart},
  language     = {eng},
  location     = {Austin (Texas), USA},
  title        = {Substitution or augmentation? Understanding customers' reactions to IoT-applications},
  year         = {2018},
}