By Mike Harris, firstname.lastname@example.org
To remain competitive in today’s digital world, big-box retailers need to capitalize upon new opportunities that connect the online and offline portions of their business. Retail executives understand the need for engaging consumers throughout the purchase cycle across all channels; from initial inquiry and online research, to in-store experience and post-purchase follow up.
Today, the “connected home” concept is heating up and presents a major opportunity for retailers to bridge the online/offline divide. Whether you refer to it as "smart home," "connected home," or the "Internet of Things," this category creates significant opportunities for retailers to establish unique and ongoing connections with their customers, from in-store education to delivery of a central in-home portal that drives "one-click" purchases and ongoing revenue.
The battle lines are being drawn, with various industry sectors realizing the strategic value of “owning” an integrated and centralized customer experience inside the connected home. First generation mass-market solutions are currently being delivered by security companies, telcos, and cable TV companies. These offerings are primarily built around home security, with expensive monthly fees.
However, big-box retailers hold the most strategic position from which to seize market share in this growing ecosystem. Lowe’s has already invested in a solution and online retailer Amazon is getting serious as well. The time for retail executives to act is now.
Here are four strategic reasons why retail executives should stake out their connected home strategy today.
1. Retailers have motives aligned with connected home success
By their nature, large retailers are in the business of offering consumers a wide variety of product choice. Today, there are currently thousands of connected devices on the market using common wireless protocols like Wi-Fi, Z-Wave, and ZigBee.
However, early entrants to this market like telcos and cable companies are typically providing pre-defined “packages” of a few connected home devices focused on security. Their goal is to not only drive revenue but to keep customers from switching their “triple play” services to the other guys. Conversely, product companies who offer a connected home solution typically have an inherent bias to promote (or protect) their own branded devices, and as a result also limit device options for consumers.
The goal of retail has always been to provide a wide variety of products that consumers want — or will want soon. This underlying philosophy of diverse inventory — versus the protectionist agendas outlined above — positions retailers as the ideal channel for delivering connected home solutions that most benefit the consumer.
Furthermore, brick and mortar stores become valuable assets for educating consumers on what is possible in the brave new world of connected devices and homes. Using hands-on displays and interactive media, retailers can bring the concept to life in ways that just cannot be accomplished online. This type of in-store education also goes a long way towards building brand loyalty for the retailer that delivers that knowledge.
2. The hub becomes the consumer retail portal
Consumers who purchase connected home technologies and devices will connect those devices to a central control device or "hub" that coordinates the dozens of devices and sub-systems in the home. Studies show that consumers do not want to deal with multiple apps to control multiple devices. As a result, whoever supplies and supports that central control hub with Web services essentially creates a centralized home dashboard for the consumer, while also creating a powerful portal.
Just as billions of dollars have been spent by online companies to secure their website as a consumer’s de facto portal or home page on the web, the connected home hub plays the same role for consumers’ “physical” home. The business case for facilitating this 24/7 direct line of two-way communication with the consumer and their home via smartphone, tablets and TV interfaces is profound.
3. Persistent product sales made easy
The rise of smartphones and tablets has challenged retail brands to provide a cohesive shopping experience across all channels. However, many retailers lack robust CRM systems that can effectively leverage customer value personalization after the initial sale or outside the store across fragmented channels.
Large retailers are in an ideal position to generate ongoing sales of both products and services with a connected home commerce portal. Via the central hub, retailers have a dedicated and highly visible customer relationship and outreach platform. By providing recommendations built upon th