The Optimal Retail Experience for Consumer IoT Products   

Sachin Mahajan, (TELUS & MobileLive)

             Until and unless you have been hiding under a rock, odds are that you have heard about the fascinating world of IoT and the transformational impact it is going to have on our lives. As more and more consumer companies realize the benefit too, and start offering their connected products & services, they will more often than not have to tackle the question of the optimized retail & channel strategy for an IoT product. Ten years from now, it might not be a relevant question as the underlying premise would be that all devices would be “smart” or “connected”. Quite like a few years back it was common to refer to a mobile device with applications and advanced data features as a “smartphone” -which now has been replaced by just a “phone” as we expect them to be inherently smart.  Similarly all consumer electronic devices, homes & cars would be smart & connected- but until utopia is reached, let’s analyse what companies are currently doing to sell these devices through the retail channel…. and what’s working and what’s not.

Every product has unique marketing and channel needs based on its evolutionary phase on the technological lifecycle.  Looking at where consumer IoT stands today, what really is needed is an effective way to humanize the story or bring it to life through tangible real retail experiences.  Consumers need to see them, touch them and have a compelling desire to own one these fascinating (sometimes overpriced) devices. We need to collectively find a way to help make the leap from B2G (Business to Geek) to a real B2C story and not just having an endless aisle of products with no one to discuss them with!  To better understand how these connected products were being promoted I went mystery shopping on one of my trips to SFO. There was a lot of chatter around Best Buy, Sears & Targets’ concentrated efforts in this space and hence I visited them to make a mental note of the best in class approach.

Best BuyBest Buy has singled out IoT and the Apple watch as the 2 drivers for its success this year. By their own admission, the combination of these two helped fuel consumer demand and resulted in the firm posting expectation-busting numbers last month, which increased the share price by 14%. Full marks to them for giving the “connected category” prime real estate and investing in customer experience. The store I visited, much to my delight, had the “connected section” right at the front of the store but what made the experience so much more meaningful was the fact that they had miniature rooms created which helped visualize the product experience and the art of the possible. The store rep was informative (but not insightful) and looked a little bit out of his depth, although he did a good job with up to date infn on most of the products.

To be honest, the connected ecosystem is quite confusing. The market is overcrowded, products are sold piece meal and there are a plethora of choices on technology- with no clear winner. A lot of people find out the hard way, including yours truly, that they have invested $400-500 in a proprietary technology or a hub which has limited to no interoperability with other expensive goodies.  Where companies could help a lot more is through specialist reps who understand the ecosystem extremely well and can recommend products meeting the customer’s unique needs. That’s where Sears has hit the ball out of the park!

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                I had the opportunity to visit their much hyped San Bruno flagship store, which essentially has 4,000 Sq Ft dedicated section to the connected consumer experience.  As the pictures and this virtual video illustrates they have actually got real estate dedicated to each room of the house with live use cases and products being highlighted. In a way Sears is forcing customers to explore, learn and interact with connected products and see them working in the context of the home. To top it up the customer rep I interacted with clearly understood the complexities of the products showcased – he was extremely helpful and actually suggested alternatives to setup my home automation system with the best in breed (compatible) products at the least cost! Truly a memorable experience!  Hoping to see more wide scale rollout of similar “experience centers” from other retailers.

s3

Unfortunately, I wasn’t able to visit Target’s experimental store called “Open House” where not only are they experimenting with some of the most advanced Consumer IoT devices but also new ways of retailing in general. From what I read, they seem to be focussed on helping customers discover new products, getting them to understand what their own unique needs are and also in capturing feedback to optimize the experience! The target store I visited really dint have much to write home about as some of the reps didn’t  know if they had a “connected section”, to begin with. Waiting on David Newman to have a wider rollout of the connected store experience.

In a nutshell, the increasing complexity and interoperability challenges for IoT products are making the Sears/Apples’/Best Buy’s operating model increasingly relevant as customers want and need more help selecting, installing, connecting, integrating, using, maintaining and taking full advantage of their products. These companies have already invested heavily in the real estate and now need to make Customer’s physical experience and education around IoT front & centre of their strategy to ensure they can get back into the game and compete long term with the Amazon’s of the world.

Based on what I just witnessed it seems to be game on!

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Connected Home: Art of the Possible

Home

Sachin Mahajan, TELUS

I have a connected light bulb in my living room. Whenever India plays a cricket match, it turns blue, telling me to switch on the TV and kick back. If I wanted to, I could have the bulb flick on and off a couple of times every time somebody tags me in a photo on Facebook, or BuzzFeed uploads a new article on technology that interests me. I’m also thinking about buying a IoT enabled or connected lock for my front door. It would send me a text message when somebody knocks on the door, so I’d know about it even if I was on the other side of the world. Thanks to a small video camera at the door, I could use my smartphone to see who it is, and to unlock the door if I wanted to let the visitor in. I can do all of this thanks to Machine-to-Machine (M2M) technology and an industry  of really cool apps that’s growing by the day.

Home security

IoT enabled home security solutions have been around for a while. You can have a system installed professionally, or you can do it yourself. Cameras can be activated by motion, sending images to your smartphone or tablet so you know what’s happening inside your home. You can be alerted if something unexpected takes place, and you can check visitors at the door. It’s up to you how much you are able to control. You can even extend it to personal security inside the home, say for seniors. There’s an app that will alert you on your smartphone if your 80 year old parent has fallen, or if there’s been no activity in their home for the last 18 hours.

Automation

This is where the really cool innovation is happening. Take the connected lock I described above and imagine how realtors could use it. Today, many realtors still hang a dropbox with a key in it on the front door of a house they’re selling. Often, they use the same combination for all their dropboxes. That could be a security nightmare. But with connected locks, realtors could simply use their smartphones to check every prospective purchaser at the door and decide whether or not to open up to them.

Energy management

There’s already a plethora of devices that can do amazing things. For example, there’s the Google Nest. It’s only about $250 and you can easily install it yourself. It learns your patterns and preferences and automates them, controlling the furnace or air conditioning just the way you like it, and saving you as much as 20% on your energy bill. I paid over $700 for electricity last year, I could have saved $140! The great thing about the Nest is that it also understands hand gestures. So if you’re cooking something that you know is going to be smoky, you can wave your hand and Nest will switch off your smoke detector for the next 20 minutes.

What’s next for the connected home?

You wake up in the morning and put on your slim biometric bracelet. It identifies you by your heartbeat, which is as unique as your fingerprints so nobody else can pretend to be you. Your thermostat registers that you’re awake and quickly adjusts the temperature to your preference. You go through your morning routines and prepare to leave for work. The front door unlocks as you approach it and locks itself behind you. You walk up to your car and unlock it with a wave of your hand. Along the way, you stop for a coffee, wave your bracelet over the cash register and the cost of your latte is debited directly from your bank account. At the office, your desk lamp switches on when you enter and your computer boots up and logs you in. You finish early because you’re leaving on a business trip, wave your arm again and everything switches off.  Later, at your hotel, you wave your arm at the TV set and it starts up, ready to resume the Netflix show you were watching the night before, at the exact spot you stopped it. Actually, this isn’t a prediction of something that may happen sometime in the future. The technology for everything I’ve described here is available right now . And it’s all thanks to the magic of M2M. I think you can see from all this that M2M really is the “art of the possible“. That’s why TELUS is putting so much emphasis on it, working with partners who are turning science fiction into reality, today.