Retailers Struggle to Introduce Smarthome Tech

Aug 31, 2014 by

In the past year, we’ve seen an explosion in smarthome technology. We started covering home automation with occasional posts and the launch of Home: On at a time where consumers depended largely on online outlets like smarthome.com to discover and purchase home control and automation products. Sure, there were exceptions like WeMo and Nest, which you could find at select brick-and-mortar retailers, but they were outliers.

Today, retailers are clambering to get on board and offer connected home devices to the masses. Market analyst Michael Wolf calls it a “land grab,” noting that these stores recognize the potential opportunity that connected devices offer. If this thing works with that thing, then maybe I should buy that, too….

To be fair, this isn’t the dawn of something entirely new. Sears and Radio Shack were both selling X10 devices way back in the ’70s. But those products appealed more to hobbyists, and their technical limitations ultimately limited widespread adoption. Burned? Maybe so…because except for higher-end A/V retailers (which are now, themselves, largely a thing of the past) few shops offered home control and automation products—until now.

Fast forward to the twenty-teens, and everything has changed. Z-Wave, INSTEON, and ZigBee have enabled standard and reliable device communication for nearly a decade. Bluetooth, IP-based, and several open and proprietary protocols have joined the fray. And now a day doesn’t go by that we don’t hear about some new connected home product. Industry analysts predict this will become a multi-billion dollar space in a few short years, and retailers want a piece of the action.

Brick and Mortar Offerings

Lowes Iris displayLowe’s home improvement stores were among the first to jump in, selling their Iris-branded family of Z-Wave devices around a fee-based monitoring service. The industry (and competition) watched closely, but nobody else really jumped in quite as significantly until very recently. Sure…INSTEON started to appear in Best Buys, Costcos and other outlets, and one-off devices were appearing on shelves in Apple Stores and Home Depots, but it wasn’t until Staples debuted Staples Connect last Fall that the industry really started paying attention. Staples, everyone thought…STAPLES?

And so the race began. But in the rush, there seems to be quite a bit of confusion and disorganization. While Staples’ initiated a strategic trial and launch of its line, offering largely tried and true products to specific markets with precision targeting and extensive staff training, others’ approach appears to be initiated by panicked C-suite executives lunging for their phones and yelling at their minions to get connected home products in our stores—NOW!

Home Depot’s earlier efforts to sell the Revolv hub and a handful of supported devices went largely unnoticed, but then out of nowhere, they recently introduced the Wink hub and an associated line of products, including connected Quirky devices and a new connected LED bulb from GE that’s received lots of attention.

Whats that below the photo-copied offer signs? Kevo and Nest—neither compatible with Wink.

What’s below those photo-copied offer signs? Kēvo and Nest—neither compatible with Wink.

That’s the view from outside Home Depot—largely in the tech press. Inside Home Depot, many stores missed the advertised target launch date, few store associates knew anything about the new products, and it’s painfully obvious from the uninspired end-cap signage in these stores that Home Depot just hasn’t figured out how to merchandize this stuff yet. Meanwhile, buggy software, poor reviews, and bad consumer ratings have plagued the Wink products, further suggesting that Home Depot’s push to market was unreasonably rushed.

Back at Best Buy, their scramble to offer an ecosystem of their own has been one of the industry’s worst kept secrets, and recent reveals on YouTube were indicators of the pending launch of their offering happening on this very weekend. If their seeming lack of a cohesive communication plan, combined with some stores’ early (and odd) shelving of the awkwardly-named, fee-based pēq system is an indicator, Best Buy may also have a rough launch ahead of them.

Meanwhile, Apple’s collection of smarthome accessories has been growing in advance of iOS 8′s HomeKit SDK, RadioShack is making a last-ditch effort [too late?] with a home automation section in its new, next-generation stores, and even the Microsoft Store is getting in the game, offering Windows-centric INSTEON products and kits.

So…What’s Going on?

It’s obvious that retailers want in to your connected home. More stores are offering more products than ever before, but with some clear exceptions (i.e., Staples), most seem to lack a comprehensive strategy or vision.

So what’s going on and what should be done? It seems like most retailers are tripping in multiple ways, and there are some specific areas that could use more attention and coordination:

Research and planning. Most of the roll-outs we’ve seen in retail outlets have been hit-or-miss. Ultimately, Staples has assembled the most comprehensive ecosystem of compatible devices, chosen specific markets to target, and coordinated a nationwide roll-out with the greatest store-to-store consistency. Even they had some day-and-date launch bumps, stretching resources thin during the busy back-to-school season, but it’s obvious that this effort has been well thought out and executed at all levels of the organization.

Communication. Most of us who are interested in this stuff already know about Staples’, Home Depot’s, and Best Buy’s moves into this space from the tech press. But what about general consumers? Most people probably couldn’t tell you what stores sell smarthome technology. Why aren’t these products showing up in Sunday circulars? Why isn’t the mainstream press paying attention (perhaps with the exception of products like Nest and anything Apple might do)? Case in point: Best Buy is debuting pēq this weekend, and some stores even jumped the gun on shelving the pēq products. Is it mentioned anywhere on Best Buy’s home page or in the weekly ad? No.

Training. When Home Depot threw a smattering of connected devices on end-cap displays a month or so back, few people who worked at Home Depot even knew about the stuff. Customer service? Nope. Electrical? Nope. Even their inventory and point-of-sale systems didn’t seem to agree on the SKU for the Wink hub itself. Numerous bloggers and tech sites reported varying degrees of success (and failure) trying to find Wink devices and anyone who knew anything about them. In our experience at four stores carrying the products, only two out of over a dozen people knew anything about the stuff. If you expect to sell these products, you’d (a) better make sure your in-store staff know that you have them and (b) train (at least a portion of) them to know what they do and to answer customer questions. Again, see Staples for how to do it right.

One of these things doesnt belong here...

♫ One of these things doesn’t belong here… ♫

Merchandizing. If there’s one thing that’s glaringly obvious and fairly consistent between retailers, it’s that brick-and-mortar stores don’t know how (or where) to position, shelve, and sell this stuff. Home Depot’s end-cap displays are hugely inconsistent, usually poorly stocked, littered with incompatible products, and often nowhere near the represented product categories sold elsewhere in the store. There’s an entire aisle in many Home Depot stores with networking devices, A/V hardware, detectors, and thermostats. Connected devices? Nowhere near there. Except if you’re looking for WeMo—that’s over with timers.

Best Buy stores are only starting to pull together connected home products, but even then it seems like something like an afterthought. While INSTEON has finally found a home near other home security products, Hue, pēq, Nest, and Kēvo are shelved in some stores with tablet cases and backup power supplies.

Retailers who are doing it right are creating a dedicate space—a home, if you will—for connected devices. A place where people know they can always find the devices available in that store. Who’s doing it (mostly) right? Lowe’s (though the experience is somewhat inconsistent between stores), RadioShack (though only in their new concept stores), and Staples (though they’ve foregone their hands-on display for empty-box containers like you might see in their network and storage devices aisle).

Staples Connected Home display boxes leave you empty handed

Staple’s Connected Home display boxes leave you empty-handed

Bottom line: Everyone could be doing a better job, leaving lots of opportunity for retailers, consumers, and ultimately, for improvement. Could this spawn a new breed of stores dedicated to smarthome technology? Or might another sleeper, like Staples, sweep in and take us all by surprise? It’s messy now, but there’s a lot of promise for consumers on the horizon. Let’s just hope the current wave of mis-steps doesn’t sour the average consumer’s perception. And if you don’t have the patience to wait for everyone to get it right, there’s still always smarthome.com and amazon.com.

For further discussion about retail’s rocky push into the connected home, listen to Home: On #032 – Retail Struggles, with Dave Zatz.

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  • kevin

    Excellent article! I think there is a huge opportunity for traditional stores. Today home automation is being embraced by tech enthusiasts who are somewhat self sufficient. The retail stores should focus on the next wave of consumers who are going to need more assistance. Home automation is a two step process, one- deciding on a hub/system and two- building out your devices infrastructure. Another thing in the favor of brick and mortar stores, I think the buying motion for most devices will be the weekend project, ‘I need to run out and by a Z-wave switch for the hallway’.
    If I ran RadioShack I would be betting big on HA. Their staff is more intelligent than most retailers. If they setup a moderated forum system to support their customers, tech enthusiast would participate.
    HA fits nicely with the DIY products that RS already carries.

  • Richard Gunther

    I know I’m late on this reply, but I agree with you completely. I was hoping Staples would carry as many SKUs in their roll-out as they did in pilot because that could be the solution for, “oh, I’ll just go out and pick up a few (ivory) Caseta switches [or whatever] to finish this project.

    And on RadioShack…yes, yes, and yes. I think they should double down on this stuff and appeal to their enthusiast, tech-toy oriented base.

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