Marketing high-tech products the smart way
Predicted to be one of the fastest growing retail categories this decade, the ‘smart homes and products’ category could see Australian households take on at least three to five smart home products within the next few years on average, according to market forecasts.
Just four years ago, the global smart home market was valued at around $24 billion but is now expected to surpass $53 billion by 2022, according to a recent Zion Market Research report. In the US alone, the smart home market is expected to more than triple in size from 2018 to 2022, according to the Home Improvement Research Institute (HIRI).
Although smart home penetration has grown to 33.2 per cent in the US, the average revenue per installed smart home still only sits at $113.16, according to the American Consumer’s Survey and Industry Study, Statista. This indicates that although consumers are currently comfortable at trialling a couple of smart home devices in the home, such as a door lock, they are yet to seriously invest in devices that have the ability to interact throughout the home.
In the past it seems the biggest draw card for consumers to buy smart home products was via the safety and security category. However, today the top-selling smart home category is consumer electronics, according to HIRI research, which includes smart speakers such as Amazon’s Alexa and smart appliances.
Today, smart home products have not only become smarter, but are easier to use. This was particularly apparent when Amazon, Apple and Google came together in a rare collaboration, late last year, to make smart-home gadgets easier for people to use. As part of the collaboration the tech giants partnered with the Zigbee Alliance, a standards group for Internet of Things (IoT) technology, to develop a better way for connected devices to talk to each other reliably and securely, according to a recent Business Insider report.
The project aimed to create a technical standard that electronics makers could use to make their gadgets compatible with smart home and voice services such as Amazon’s Alexa, Apple’s Siri and Google’s Assistant, and build on internet technology so that smart home devices can also connect with mobile apps and cloud services, according to the report.
Smart integration grows sales
While the US smart home market is expected to grow around 12 per cent annually over the next four years, according to Statista, there is potential for this percentage to increase significantly if hardware retailers are willing to take on innovative smart home marketing in-store. If established or new home builders are well educated on the benefits of integrating smart home devices and making them a significant part of the household, sales would increase significantly.
What seems to have gone unnoticed in the hardware industry is that currently there is only a handful of retailers that have grasped the concept of marketing or displaying an interactive smart home display in-store. One that can easily educate customers on products that may appeal to their home environment.
Currently, the majority of smart products are either sold online or via speciality retailers, including JB Hi-Fi and Harvey Norman. While such retailers do provide the necessary installation and programming support services for this category, many of these specialty stores do not provide an easy, interactive display that showcases the benefits of purchasing interactive smart home products to suit either a new or established home. While Harvey Norman is on the cusp of investing heavily in a ‘smart house’ store-within-a-store concept, the retailer is still collaborating its huge range of products. The large project is currently being headed by Harvey Norman Director John Slack-Smith, with the bigger stores set to allocate large areas in select stores, according to a recent Channel News report.
Looking at smart home products offered online, Amazon not only offers competitively priced smart products but also an Alexa smart home consultation service to ensure customers are well educated on how they can utilise these products to fit with their home environment. Amazon’s setup and installation service is offered at an additional cost, but includes learning how to use voice commands to control the home with Alexa Smart, such as changing the temperature, turning off lights or sourcing the news without lifting a finger.
This then leaves independent hardware stores and big boxes also dealing in the smart home category, but are often known to only display and market isolated smart products, such as smart locks.
IHG (Independent Hardware Group) has already ramped up its smart home program. This was particularly evident at last year’s IHG Expo in Adelaide with the launch of a new smart home section within its trade show. It was during the trade show that IHG presented a connected home concept showcasing the latest smart home technologies and home security. The response from members was positive, with an extensive smart home section again on display at this year’s Expo in early February.
Looking to the big box, Bunnings also launched its Connected Home platform last year, which was specifically designed to control curated smart home ecosystems using both Amazon Alexa and Google Home. The launch came just a few months after Bunnings first began stocking home automation products, with its first brand offerings being Philips, Sengled, Google Home Mini, LIFX and Wiz. The launch was intended to place pressure on traditional consumer electronics retailers, like JB Hi-Fi and Harvey Norman.
In-store marketing genius
So how can interactive smart home products be successfully marketed to the consumer?
A recent Residential Today article indicated the genius of one Crestron dealer that used the mock-up of a home to develop a showroom displaying the benefits of an interactive smart home system. The mock-up consisted of a kitchen, living room, bedroom, entry way and patio. It also included speakers in each room, which exhibited how a whole-of-house system worked, including touch panels that controlled interactive products throughout the home, security cameras that could be viewed on a smart phone, a smart thermostat, motorised shades, as well as outdoor speakers, according to the report.
The space was user friendly, enticing, interesting and self-explanatory so customers were keen to try out all of the products and visualise how these products would sit in their own home.
This is a far cry from many unimaginative product displays found in Australian hardware stores today. It seems even specialty stores have not grasped the best way to market interactive smart home products to the consumer. Clearly the consumer is interested in these products because of the penetration already evident within this category. However, with just a little imagination, any retailer willing to think outside the square could display smart products in an exciting and interactive display.
It is often much easier for a customer to learn about smart home products when they see and feel smart home products working together in an interactive smart show room. It is then that the customer can visualise the smart home products they wish to purchase for their home before building a new home or integrating these products over time.
Retailers could also hold special events inside the interactive store-within-a-store, with special discounts and catering to educate customers on the value of pushing smart home products.
Cashing in on smart home growth
Understandably, the sheer volume of solutions, app proliferation, setup, installation challenges and hardware problems can overwhelm the average consumer and retailer. A recent Forbes report also pointed out there is the probability that many good, innovative smart home-related devices that are provided by start-up companies may or may not be in business a year after going to market. However, there are always ways around the overwhelming task of setting up a successful smart home display.
US retailer, Best Buy, is one such example, after it introduced the Best Buy Geek Squad, where well educated, well branded staff members patrolled the smart home department and assisted customers with smart home sales.
Retailers can then build on the assistance of their support staff and become the pioneers that take advantage of the potential sales in an interactive smart home space that is self-explanatory and user friendly. Retailers may even wish to create a mock-up smart home back yard, where smart mowers can be displayed in action and customers can see the benefits of investing in the mowers of the future.
The smart home category is expected to grow well into the future, which is why it is so important to become an early adopter of stocking these products in a way that will entice customers to integrate these products in everyday life. Ongoing sales are also born out of repeat customers who no longer shop at Harvey Norman or JB Hi-Fi.
It is likely there is a smart home product for the majority of hardware customers, particularly with more and more products being added to the category every year.
Just some of the smart home products to be launched over the next decade include electric charging stations for connected cars, a master controller for all smart devices, ubiquitous voice command integration, vision-based home security systems, smart thermostats, wholesale adoption of voice assistants in senior housing, voice-activated home diagnostics tests, environmental sensors, pet tech products and artificial intelligence integrations (Source: Forbes).
For now, never stop educating your customers on the value of these products, particularly tradies and builders who are most likely to pass on the information they gain from your in-store displays to their customers.
Latest trends from local suppliers
When discussing the most efficient way to market smart home products to customers of all ages, ASSA ABLOY Product Manager, Lauren Kendell said training and web content remain important aspects of growing the smart home sector, particularly because it is still a fairly new concept.
“We make sure our staff and customers are provided with in depth training on how smart home products work, because this in turn leads to an increase in consumer knowledge on smart homes. In-store displays are also important because it gives consumers the ability to touch and feel the product,” Ms Kendell said.
“Whilst we have seen an increase in online sales, many users still visit brick and mortar stores to view, play and experience the product prior to purchase. Having the products in a working setup within stores is an important factor to marketing the benefits of a smart home product and its features, when connected to a smart home system,” she said.
While Ms Kendell agrees there is a certain target market when advertising these products, the older generation still needs encouragement.
“Whilst we do see a younger demographic adapting to smart home products faster than the older demographic, we aim to market digital products to all ages due to the array of benefits available. As Australia encourages the elderly to live at home longer, smart products can assist in making things easier in everyday life, while also allowing family members to monitor the safety of their loved ones at home,” she said.
While ASSA ABLOY’s new and exciting smart home products continue to innovate the market, its Yale brand remains a leader in the industry through consistent innovation and development. The Yale Assure range is the latest smart product range launched onto the market, and has the ability to control the lock via an app, while interacting with a variety of smart home systems.
“According to our customers, having the ability to now manage a lock via their mobile phone is a key attribute of the Yale Assure products. Mobile phones have now become more of a valuable device, with the ability to manage a variety of products and services from a single point,” Ms Kendell said.
“The digital/smart home trend is now increasing globally and there is a need for companies to keep up with this trend. This is why we will continue to launch new products in line with current trends, as well as future trends within the industry.”
“We have seen an increasing trend in digital lock purchases, up three per cent from 2018, as well as 47 per cent of users considering a smart digital solution during their next purchase. These trends continue to identify the importance of introducing new smart digital products into the market,” she said.
As the Yale Digital Lock offering expands, ASSA ABLOY has the ability to provide consumers with a wide range of products suitable to varying applications.
“Having an increasing range offering also provides ASSA ABLOY with a greater point of difference in the market and against competitors,” Ms Kendell said.
“We are always working on the development of new products to expand our digital product range offering. 2020 will be a big year for Yale digital locks with a number of product launches planned, which we expect will raise the bar in the digital locking space,” she said.
Delf markets product capabilities in-store
Interactive in-store displays are vital in educating consumers on what smart home products are capable of and how they work while they are in action, according to Delf General Manager, Peter Crossley.
“Staff training, as well as knowledgeable sales staff who are up to speed in this innovative area are also imperative. On that note, it is really important that the display is in good functioning order, with the products working properly and all backed by an interactive website,” Mr Crossley said.
While Mr Crossley reiterated the importance for younger generations to be targeted during marketing campaigns – because they are early adopters naturally attracted to smart home technology – there is still a definite desire from people in the older, and sometimes less tech savvy, demographic for such products.
As Delf’s most recently released product onto the Australian market, the Delf Home Automation Range works independently while also remaining compatible with other major brands offering the best possible home automation scenario.
“A key differentiator of Delf’s Home Automation Range is that being modular and working with a range of other brands, it allows the user to adopt it alongside brands they are familiar with and expand incrementally from there at their own pace. Not only is our range highly intuitive, it is easy for anyone to use. It ticks all the boxes for everyday functionality and caters to the varying needs of all age groups. Of course, very importantly, it is also value for money,” he said.
“As an example, Delf’s Home Automation Range could initially be used as the hub for managing the home airconditioning system. Additional services and products can be added incrementally as the user feels comfortable with the level of technology.”
“One of the outstanding benefits of Delf’s Home Automation Range is that rather than being one stand-alone brand or platform, it can efficiently partner with many global brands if required, while still being a simple solution. Customers are able to choose from a wide variety of brands and home automation products and link these seamlessly, all controlled by a single app. This is a unique, win-win situation,” Mr Crossley said.
Delf’s Home Automation Range was designed and developed specifically to meet the need for more intuitive home automation products.
“In this rapidly evolving market, both on-trend momentum and pent-up latent demand for home automation have exponentially driven up demand for Delf’s Home Automation Range in the markets we have launched in,” he said.
“Along with its scalability to suit the timeframe and requirements of a particular customer, Delf’s Home Automation Range allows multiple global brands such as Yale, General Electric, Phillips, Swan etc. to all be integrated, used and controlled by one single, easy-to-use app. This makes perfect sense for people with busy lifestyles who need to be able to look after the security and automation of their homes easily and from any location,” he said.
A big trend in home automation is the need for open platforms and scalability allowing flexibility for the customer. This is an area in which Delf’s Home Automation Range excels, according to Mr Crossley.
“Customers with different technology appetites and budgets can enter the market without sacrificing ease of future upgradeability. People are tired of having to have multiple apps to control multiple devices within their homes and they are looking for technologically advanced simplicity.”
“Additionally, because Delf’s Home Automation Range is modular, it can grow with a customer’s needs and budget, while it also allows for further new products to be added. Marketing of Delf’s Home Automation Range in a ‘store-within-a-store’, format can be done very effectively using either a video format (if there are space constraints) or an interactive product model/display. Delf’s Home Automation Range has a full range that can stand on its own or other brands within the store can be pulled into its platform, making it an ideal product for showcasing in a ‘store-within-a-store’ environment,” Mr Crossley said.
“We are very excited to be bringing Delf’s Home Automation Range to Australia in 2020, including smart locks. Plus, there’s lots more in the pipeline that we will be announcing in the coming months,” Mr Crossley said.