by Adam Simon, global managing director, retail business development, CONTEXT
2016 started promisingly at the Consumer Electronics Show in Las Vegas in January, with a plethora of announcements from major vendors. There were smart fridges with oversized touchscreen panels, innovative security solutions, and ingenious ways to bring connectivity to existing home appliances and fittings.
It seems that as we draw to final quarter the promise of the smart home is once again yet to be fully realised. That’s not to say that the industry isn’t enjoying some impressive growth figures. Over the past year smart home revenues into retail via distribution have increased by 36% year-on-year according to our figures, with strong growth in lighting/electricals, energy and security/access products.
That’s why I’m so interested in chairing a discussion on retail strategy during Smart Home Summit. Together with experts from John Lewis, Exertis, Cornflake, Sengled and Maplin we’ll be debating how this encouraging trend can be turned into a movement that adds genuine value into the homes and lives of consumers.
One of the clearest barriers that needs to be addressed is that while we in the industry understand the smart home’s vision and potential, the general public are much further behind in terms of awareness, let alone adoption.
Our research into 2,500 Europeans (500 from the UK) demonstrates that much more needs to be done to promote the smart home. Only just over half had heard of the term smart home, and almost two-thirds had seen or heard it mentioned, promoted, or advertised ‘not very often’, ‘infrequently’, or ‘never’.
Retailers need to play a more active and visible role in championing the smart home. Of all the ways that the public have heard about devices and solutions, retailers come out on top. 56 per cent saw products either in-stores, or on retailer websites. The next most popular channels tied at 20 per cent were from friends and family, and TV and radio ads. However, when we asked if people thought retailers were going a good job of explaining the smart home concept, only 12 per cent agreed.
We know there is a genuine opportunity for retailers to own a significant portion of the smart home market. Currently many retailers stock products by department—lightbulbs are in home furnishings, thermostats are in electronics, and ovens in appliances. As we know, the smart home is an ecosystem that works as one, and as such it needs to be promoted as a whole. John Lewis is a shining example of how to tie it all together with their dedicated smart home space at their flagship Oxford Street store. French and German retailers such as Lick!, Fnac and MediaMarkt, are also adopting this approach and reaping the benefits.
Retailers can also benefit from the fact that smart home devices are not just a one-time purchase. Because of its always-on and connected nature, the category lends itself to on-going after-sales care, as well as installation and support services. The importance of this proposition is not lost on Dixons Carphone, whose Knowhow service division generates £40 million worth of sales for the company annually. Retailers that commit to the smart home now could not only take advantage of being one of the first-movers, like Maplin, but could carve a competitive differentiator by building out a complete sales and services platform.
Retailers can also persuade the public that they are the natural place to shop for smart home products by targeting the whole family, and selling the smart lifestyle. Instead of trying to target lone gadget-lovers, retailers should instead be educating consumers that the smart home can make everyone in the family’s lives easier. The ‘boys and their toys’ stereotype also needs to be forgotten as our research shows that 65 percent of the UK consumers prepared to spend over £5,000 on the smart home are women.
Our advice to retailers is clear: creating spaces within stores where shoppers can test out the devices and see the concept come alive will pay many more dividends than having products boxed on shelves. Staff also need to get excited about the smart home. If retailers boost their teams’ technical knowledge, not only will the concept become more easily sold to consumers, but there’ll be more commercial opportunities in installation and after-sales support.
Even if we’re not there quite yet, the smart home remains one of the most exciting developments to come out of the digital and Internet revolution. At Smart Home Summit we are no doubt going to arrive at a new level of understanding. And with Apple recommitting to its HomeKit platform with an official app shipping with iOS 10, all of a sudden consumers have one-stop destination to add their devices to. Convenience is a powerful driver, and every iPhone user will soon have a pre-installed gateway to the smart home. It is touches like these, combined with the evolution of retail strategies, that makes us remain optimistic about the potential for smart home sales.
That’s why I’m so interested in chairing a discussion on retail strategy during the Smart Home Summit at Olympia on 21st – 22nd September. Together with experts from John Lewis, Cornflake, Sengled and Maplin we’ll be debating how this encouraging trend can be turned into a movement that adds genuine value into the homes and lives of consumers.
At the Smart Home Summit we are no doubt going to arrive at a new level of understanding.
About Smart Summit London
Smart Summit is a 2 day conference and exhibition covering the Internet of Things (IoT) ecosystem and its impact on the digital society.
With 3 in-depth event tracks and over 180 leading speakers, no other IoT event covers the Smart Home, Smart Cities and Industrial Internet of Things in as much detail.
Co-located with a joint networking exhibition, each track (summit) features over 20 unique and topical sessions – gain a unique insight from industry heavyweights and hear case study examples from major contributors.
Make sure you are present in London on the 21st and 22nd September for THE Smart event of 2016.