The Smart Home Calls for Smart Retailing
Awareness and adoption of smart home products by everyday consumers has finally reached mass-market acceptance. According to Parks Associates, 48 percent of U.S. households with broadband intend to buy at least one smart home device this year, up by a whopping 66 percent over 2017. Brick-and-mortar retailers will play an important and profitable new role in this exploding sector. A solid omnichannel game plan has major advantages toward the smart home customer experience that can't be matched by pure e-commerce.
The key to retail success in the smart home space is understanding the entire through line of the consumer's purchase journey. The retailer's value and the customer's trust are exchanged before, during, and after the sale.
Smart home products are both easy and challenging for the retailer to sell. Common benefits like safety, security and energy economy are simple for everyone to understand and have genuine appeal; that's the easy part. However, there are multiple ways to achieve smart home benefits, involving a broad selection of product types and brands. This causes confusion for customers and sales staff alike. Smart home is not a product, but a combination of products working together. Smart home is not an app, but it's controlled by an app. Smart home is not a service, but it's often connected to a free or paid service. It's easy to see why confusion is a problem.
Throughout the initial growth stage of the smart home revolution, brick and mortar retailers were often left on the sidelines. When a do-it-yourself customer went shopping for smart home solutions, the purchase journey typically began and ended online. When do-it-for-me customers wanted a system, they'd get it from their broadband or security provider. Throughout this early growth phase, the retailer's role was diminished, with little added value to offer. With smart home now becoming mainstream, that's no longer the case. As the category continues to grow, retailers -- particularly those with a brick and mortar presence—can offer a crucial new value proposition.
The core differentiator that today's CE retailers can offer the consumer is the most important missing link in today's smart home market: expertise. Most ordinary consumers don't have it and don't want it. While there will always be a niche of self-sufficient, technology savvy customers, some technical knowledge is still needed to buy and deploy even basic DIY systems.
Despite smart home simplicity coming such a long way, systems still need setup and configuration. Plug and play might work for a single standalone product but add just one more device to make a system and the knowledge gap widens considerably. Do most consumers know the best place to install a security sensor, or how to securely include devices? Knowledgeable guidance from the seller harkens back to an older, pre-internet retail paradigm and is an important new offering for retailers.
Expertise for the consumer, before, during and after the sale, makes retailers—especially those with a brick and mortar presence—a natural go-to for the smart home customer. Because systems include physical products of varying sizes and designs that will often be visible, the customer’s desire to see, touch and feel is natural. The sense of what these products would be like in their homes is more real in-hand than through a photo or video. Brick and mortar retailers are also better positioned to explain and help choose between the multiple solutions and brands available and show how smart home capabilities can be extended over time.
Another challenge for DIY purchasing that the retailer can solve is demystifying the mix of brands that can create a smart home system. While broad choices are of course a benefit, they can make troubleshooting and installation difficult. Support from retailers who can guide the consumer on which products will work together is essential to securing satisfaction for smart home purchases. To build trust and set the stage for future sales, the retailer can steer customers to interoperable devices that let them build on their purchase without fear of obsolescence.
Expertise from the retailer is also a compelling advantage after the sale, when the consumer brings the device home to plug it in. Even tech-savvy consumers can be frustrated by unfamiliar technologies, and many abandon the effort to link their devices together, which makes them lose out on the full value of a connected home ecosystem.
According to a survey by Support.com, nearly half of tech consumers will spend up to one hour, and more than one-third will spend over an hour, on the setup for product purchases over $200. Even thirty minutes of unsuccessful device setup is frustrating for the average consumer, and frequently results in a product return. The Support.com survey demonstrated convincingly that increased effort leads directly to increased returns, regardless of price. For purchases of $200 or more, 90 percent of customers will return the product within a week if the product set up and installation was perceived as too difficult. Even for more modest purchases under $200, the return rate was similar, at 87 percent.
Manufacturers typically provide support information for DIY customers on their own web sites, to greater or lesser degrees. However, retailers can capture many sales which otherwise would go directly to the manufacturer by providing knowledge as a service, both before and after the sale. Being able to offer knowledgeable advice during the pre-sale process makes sure that the right products are sold in the first place, and negates the primary reason for product returns. Post-sale knowledge services return the retailer to the trusted advisor role they once occupied before the disruption caused by e-commerce. In the new retailing environment, expertise is now an important new offering.
As a result of the technical challenges, real or perceived, in setting up a smart home, the do-it-for-me model has started to gain popularity over the do-it-yourself method. While some customers are comfortable, or might enjoy going through the setup process themselves, others prefer a professional who can do it for them, or at least be able to assist if needed. Brick-and-mortar retailers can speak to the customer directly in store of course, but also through online chat and informational resources that educate and support customers as they take the products home for setup. Becoming a one-stop shop for products and expertise is a compelling value proposition.
To service the do-it-for-me crowd, retailers now have a wealth of options on where to send customers for qualified installation specialists. Many retailers offer in-house installation services, but others can take advantage of the growing third-party services market, which is creating both local and nation-wide organizations that offer smart home installations. Even if the retailer doesn’t offer any installation options at all, they can help assist the customer in getting the product correctly installed though online installation videos or web chats.
Education and support contribute to a better relationship between the consumer and the retailer. A foundation built by providing knowledge as a service before and after the sale contributes to repeat sales, stemming from trust and good customer experiences. A good retailer will help the customer choose the right products that will work together interoperably, help the customer establish a smart home system that they can build upon, and get the customer smoothly through the installation process. Becoming the knowledgeable tech resource for the consumer makes retailers into a trusted destination for both today's smart home purchases and tomorrow's.
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