It’s an exciting time for the connected home category as sales move beyond entry-level products to more advanced offerings that work together to form a connected ecosystem. Within this ecosystem, products are creating a sense of modernization for consumers—devices are talking back to users and communicating with other devices to make homes more efficient and comfortable than before. This shift translates into big opportunities for retailers, who should be planning for how to consultatively sell products that interconnect, as the smart home category continues to grow. Retailers who select core products that work together and add in the right peripherals can help consumers create a true connected ecosystem. Due to these new possibilities with technology, now is the time for retailers to map out a plan for gaining connected-home market share.
Creating the Right Product Mix
The first step in developing a plan is carefully selecting the right product mix. The technology that works together to create a connected-home ecosystem already exists; it’s just a matter of connecting the dots to bring everything together for consumers. Home security is a starting point for many people, with key products including security cameras, alarm systems, smart locks and video doorbells. Security encryption is also becoming more advanced, which allows consumers to better protect themselves against cyber criminals being able to hack into their home environment. HVAC control, smart lighting and smart appliances add another layer of connectivity and efficiency. Another hot area is smart products that clean the home, such as robotic vacuums that are controlled by a smartphone or tablet. Eventually, these core buys lead up to the purchase of products such as the Google Home or the Amazon Echo. Once voice control comes into play, consumers have a cool chance to experience automation in the home.
Beyond the central products that come to mind when consumers think of a smart home, entertainment is another key area, from home computing to the latest in gaming. Retailers can increase sales simply by educating their customers about how entertainment ties into the connected home. Leading manufacturers are coming out with new TVs and accompanying tablets that let users download or stream directly to the TV, as well as soundbars that tie in with the Amazon Echo or Google Home for easy voice control. In gaming, consoles are serving as the home hub to listen to music and watch TV. Smart remotes also work with voice-control devices to create added efficiency.
The Sky is the Limit with Peripherals
Once the core products are in place, adding in peripherals presents a big opportunity to gain market share. Peripherals create a whole menu of build-to-order options that allow consumers to configure their homes exactly the way they want them. Just plugging in a smart light bulb includes an adapter and the switch plate that go along with it. With a security camera, you need a device to monitor activity. Sensors also come into play for lights, doors, windows, moisture detection and other applications. Outdoor lighting switches for the holidays and outdoor living areas bring even more opportunity.
The end goal is that people are waking up and using voice control to turn on the lights and the coffee maker, check the weather, and hear the latest news without lifting a finger. When they get home at night, they’re asking their Echo what ingredients to use in a dinner recipe or quizzing it about trivia on a favorite actor while catching up on their favorite Netflix series. Ultimately, everything comes together when the consumer walks into their house and preferences automatically adjust: certain lights come on, the temperature corrects itself, and their favorite playlist turns on. As a retailer, you now have the unique opportunity to help consumers create the kind of experience that allows them to be in complete control of their homes.
In-store Tactics and Online Sales
As the retail shopping experience continues to see big changes, it’s important to make adjustments around how connected-home products are sold. People aren’t just coming in to buy a single product any more, but are looking to buy a complete solution. Retailers need to create an in-store experience that includes interactive product demos and a consultative sales approach.
Big brands are opening showcase stores where product sales are no longer the focus—they’re purely there for displaying the technology. These store models are all about the educational process of teaching consumers what’s available and enabling them to learn before they buy. Making it comfortable for shoppers to come into a retail store is also key—places to comfortably sit, access Wi-Fi, and really take the time to learn about products.
For online marketing, it’s critical for retailers to take all product content and make it readily available to customers online. Retailers also need to be looking for new ways to tap into different audiences to capture the huge number of eyeballs glued to device screens. Take the rapidly growing eSports category, for instance. With the eSports global audience expected to reach 385 million this year, according to Newzoo, retailers have ways to advertise their products with a massive new audience. Another example is that once consumers buy into a certain connected-home ecosystem, retailers have a new audience to reach and communicate how accessories connect with them. It’s all about tapping into the right audiences and educating consumers about interconnectivity, whether in stores or online.
Staying Relevant to Key Demographics
The female shopper is making most of the decisions when it comes to the home today. Home security is a hot topic for working moms, since it allows them to be “at home” and in control from a smartphone, tablet or computer. Smart-home technology also allows them to manage the workflow of the home, including bills that need to be paid and people who are coming in and out of the home. Baby Boomers and Gen-Xer’s are other key audiences, as they’re increasingly becoming responsible for their aging parents. Through smart-home technology, they can receive notifications when their parents take their medicine each day, use home security cameras to monitor potential intruders and visitors, and even use voice control to order an Uber to take their parent to a doctor’s appointment. For Millennials, ease of use is one of the most critical pieces. Millennials are on the go, and want to be able to easily order items, from ordering a pizza or supplies for the home to buying music using voice-control. They’re also looking for the cool factor within the smart home - opening the garage door and turning on the lights with voice command as they pull into the driveway.
The connected home category will continue to mature and see an influx of new products coming to market during the year ahead. This will give consumers the unique opportunity to access more products that work well with existing ones and expand the capabilities of what they can do in the home day to day. The products that will be most relevant for consumers all relate back to ease of use and interconnectivity. Users want to know, “How quickly can I get this product and set it up, and how will it work together with the other products I have?” Retailers who can deliver on these questions, add in new approaches to in-store and online marketing, and relate to key demographics will see big success in the upcoming 2017 buying seasons.