CONTEXT’s retail MD Adam Simon discusses why UK retailers need to up their game when it comes to offering smart home products.
So far bricks and mortar stores have made little impact on consumers in the UK as far as smart home products are concerned.
This is strange, as general interest in the concept has grown as the range of internet connected devices available has swelled exponentially over the last year, backed by major investment from companies like Google, Amazon and Samsung.
This is matched by increasing sales in individual products. For example, our data from European IT distribution channels sold into retail, shows connected home technology has increased 151 per cent year-on-year.
However, despite this, only 39 per cent of UK respondents had heard of the term ‘smart home’ in our recent smart home consumer survey. This lack of awareness is due to the fact the major retailers you’d traditionally expect to buy IT products from have yet to seriously market the smart home.
Indeed, only eight per cent of UK consumers feel retailers are doing a good job explaining the smart home.
Across the channel, retailers have been busy making progress, recognising the revenue opportunities of the smart home. In Germany, Deutsche Telekom is leading the way, having recently commissioned extensive market research on the subject of the smart home, revealing last year that global consumer spending on smart home products and services will hit €122.77 billion by 2020.
It sells complete smart home packages and has invested in a dedicated website solely for this market. This has clearly had an impact on consumers’ viewpoints, with only 16 per cent of Germans claiming no interest in the smart home, compared to half of the UK.
Meanwhile, in France, both Orange and SFR released connected home services back in 2014.
A number of stores have also begun to embrace the need for an educational aspect to the sale of smart home products. French retailer, Lick! serves as a prime example, having introduced a very different format of store, which allows customers to test out the systems on a connected network.
JOHN LEWIS STEPS UP
In contrast to the above, few UK retailers have been marketing or promoting the smart home as a concept or experience. However, this is starting to change.
Maplin dedicates a large part of shelf space to its connected home concept. Dixons launched the Smart Things range last September. And John Lewis has opened the largest Smart home retail experience in the UK at the flagship Oxford Street store.
CONTEXT was invited to a preview to see the display before doors officially opened to the public. We were delighted to see that John Lewis has shown a strong understanding of how to sell these products to a largely ill-informed public, supported by a well thought through brochure introducing smart home.
To understand the potential of the smart home it's critical to get a feel of the connected products in a simulated environment. To address this, John Lewis has divided its display into four sections: kitchen, entertainment, sleep, and home monitoring. Within each section is a variety of products connected to tablets for consumers to control and try, accompanied by custom-built displays to simulate night/day cycles, or a view from a window, placed around furniture and household appliances.
John Lewis also plans to have a sales attendant on duty to show consumers how to interact with products and run them through use-cases. Education is crucial, with 61 per cent of UK respondents listing a lack of understanding as the biggest factor putting them off a smart home purchase, greater than any other issue.
Of course, there is still a way to go for retailers attempting to build trust and customer understanding of smart home benefits. While John Lewis has taken a great step forward, there will be a number of other hurdles to overcome.
For instance, having sales assistants on hand is a great move, but only if they are kept updated on the latest products and capabilities, which will continue to evolve at pace in the coming months as new products reach the market. Well thought out training will be essential if staff are to keep up with the pace of the technology.
Installation will also be a key area, requiring very specific training with accreditations from vendors. John Lewis has pledged to include installation as part of any smart home purchase, but it’ll be interesting to see how this works in practice as finding a good source of installers can be a headache for many retailers in the UK. Installation may also become more complex as consumers begin to construct their smart homes with devices from multiple vendors.
Regardless of the challenges ahead, it’s great to see John Lewis raising the bar. All retailers need to follow suit. The challenge to retailers in smart home is coming not just from etail, but also from DIY retailers, telecoms companies and utilities.
If retailers do not innovate, they will miss out on a slice of the lucrative smart home pie, and we, as consumers, will be worse off for the lack of choice on the market.
Adam Simon is the retail MD at CONTEXT