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Industry Insight SMART HOME RETAILING


February 2019 ertonline.co.uk


Grab your piece of the action


With Smart Home product sales set to boom over the coming years, now is the time to get in on the action and here, Rupert Cook, Sales and Marketing Director at field marketing agency, Gekko, looks at how this can be done


36 H


ere at Gekko we’ve been talking about the Smart Home for over four years now. Back in 2014, we commissioned research into ‘the connected home’ and asked consumers what they thought of having digitally connected devices in their homes. The vibe coming back from the 2,000 respondents wasn’t exactly positive, but thankfully for us all, things have moved on from then and the numbers speak for themselves. Analysis by PWC found that the global market for smart home is expected to be worth $50bn by 2022. Around 30 per cent of people are planning to purchase a smart home device in the next two years and looking at just one product category in the smart home arena, Smart Speakers, further illustrates the potential. In 2017, Amazon sold 33 million Echo devices whilst Google dominated, selling more than one Home device per second from its launch in October 2017 to mid-2018. Consumers aren’t only purchasing Smart Home they’re


products; also discussing the merits


online. A study by Crimson Hexagon indicates that positive sentiment is growing from 60 to 80 per cent in the last year – another sign that Smart Home technology sales are poised for blockbuster growth. So what will 2019 bring for the Smart Home?


Well, a quick search for the subject on the CES website schedule brings up roughly 100 talks, seminars and events on the topic. Looking beyond this, it is worth noting that 5G technology is on its way in 2019 as it’s rolled out to certain cities across the UK. With speeds 20 times faster than 4G, the advance is only going to hasten the Internet of Things and connectivity in general and will in future open up new possibilities for consumers. Everything from refrigerators, window shades and your family car will be linked, while housekeeping robots and next-generation digital assistants facilitate day-to-day activities. The potential is there for CE retailers to capitalise on the opportunities and as indicated by the ERT Turning Point survey back in October; 45 per cent of respondents have been looking at the Smart Home as a new area for their businesses. There are, however, challenges that have meant slow consumer adoption. To be successful at selling Smart Home solutions, retailers need to acknowledge and overcome these barriers.


Heart of Philips Hue system


Don’t overwhelm the shopper The perceived complexity of systems is one of the principal hurdles for consumers, so it’s essential that the sales approach simplifies the options available and doesn’t overwhelm the shopper. It’s easy to get carried away and attempt to impress by reeling off the endless possibilities of what can be done. The chances are that you’re going to elicit a potentially blank response. Our Smart Shopper research from earlier in 2018 showed that 21 per cent of people love the idea of the smart home tech but were intimidated by the complexities. Look to address this and you can have these types of customers eating from the palm of your hand.


The idea of complexity isn’t helped by the challenges of market fragmentation. On a typical shopfl oor, product groups tend to be disconnected – smart lighting, smart speakers, thermostats, security, home appliances etc. all displayed in separate areas.


The idea of complexity isn’t helped by the challenges of market fragmentation. On a typical shopfloor, product groups tend to be disconnected – smart lighting,


smart speakers, thermostats,


security, home appliances etc. all displayed in separate areas. This makes it hard for the consumer to picture the totality of what’s possible within their home. All the shopper can see is competing brands, products and technologies. There is a general fear that buying into a particular brand means you’re on a committed pathway with no guarantee of integration with other devices or solutions.


Retailers must plan, order and merchandise


to overcome these inconsistencies and create a conducive sales experience. As an example, the Google Smart Tables in some multiple retailers bring together their devices with compatible third party products such a Philips Hue, and in doing so bring the category to life.


The human touch For all the great interactive displays that can be installed to bring the concept and possibilities alive in-store, there needs to be an effective sales person on hand to guide and advise the customer. Otherwise, what will happen? The shopper will do their own research from the comfort of home before making an online purchase. In creating effective sales people, the approach to training is fundamental. For retailers, sales teams should be able to present an agnostic solution, understanding the bigger smart home picture rather than focusing on specific product types. Retailers should also tap into the product training on offer from suppliers and take up any offers of seeded or loaned kit, creating users and thus advocates of the products.


Consumer education is the key to expanding the use of Smart technology into the modern home, and retailers sit on the front lines of that effort. For all the pessimistic talk surrounding physical retailing it should be remembered that it still accounts for 80 per cent of consumer sales in the UK. There’s an opportunity for bricks and mortar retailers to demystify the Smart Home and become the destination of choice for consumers looking to invest in the tech.


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