The Smart Home Retail Revolution

OUTFORM Industry Trends

It’s certainly been a year unlike any other in terms of chaos and upheaval – and retail has taken one of the biggest hits of all. COVID-19’s impact on the retail sector has been swift, sudden and severe, with the speed of lifestyle change causing cataclysmic shifts in consumer spending, attitudes and behaviours.

Locked-down shoppers have headed online in huge numbers. McKinsey’s 2020 August report recorded the equivalent of 10 years’ advance in consumer and business digital adoption, all in the space of 90 days. In the US alone, e-commerce increased by 30% between March and mid-April compared with the same period in 2019

Besides price, a main driver in COVID-19 influenced behavioural change has been the presence of the fear factor of infection in physical stores. This has led to the ever more pressing need to provide safe or touchless retail solutions to encourage customers to return. A recent survey carried out by Outform highlighted the technologies desired by consumers when interacting with products in-store. It revealed 67% wanted mobile self-checkouts, while 43% wanted voice activation for store assistance and product demos.

During this time consumers mind-sets have shifted almost exclusively to the immediacy, convenience, availability and safety of digital products and experiences causing a mass migration to online and omnichannel paths to purchase. Smart home products in particular have seen a growth in online sales with 54% of men and 42% of women purchasing them remotely compared with 36% and 34% respectively purchasing them in-store, with Amazon, bringing a sense of order to the potentially confusing definition of the smart home category.

While the desire for digital convenience and purchasing is evident in the world of the connected home, the role of the store cannot be underestimated, or overlooked.

We’ve been told for a few years now that the Internet of Things is on its way and we may have reached the tipping point that could transform it into reality. For the leading brands and manufacturers of devices like smart heating controllers, speakers and security systems, this can’t come a moment too soon. These already include some of the world’s biggest and most successful brands including Amazon, Google and Samsung. Needless to say retailers are also sharing in this success as they start to own the category and experience.

Consumers who might help this happen include the obvious, and the slightly more surprising.

As you’d expect, the tech-savvy 18-24 year olds lead the way with 42% of them having used smart home devices for two years or more. But the next highest group is the 65+ category, with 41% being equally well-seasoned users. A number of theories have been put forward to support this finding. The most popular is that older people, probably mortgage and dependent-free, simply have the disposable income needed to try out new tech that promises to make their lives safer, more convenient or simply more comfortable.

The good news for retail is that while 39% of shoppers first start researching potential purchases on a mobile device and 14% on a PC, when it comes to buying the product in question, 64% of them choose to do this in a physical store. This is especially relevant for products that may be a first-time purchase, giving shoppers a reason to visit the store and experience using the tech. Seeing really is believing in this category.

The challenge to be overcome in this scenario is how to effectively demonstrate the features and benefits of the products in a somewhat overwhelming category. But the most forward-thinking retailers such as Best Buy are already discovering and demonstrating ways to do this, often leading to not just single but multi-device purchases through using innovative technology solutions in-store and ‘thinking outside the box’.

When in-store technology works well it can form the foundations for customer loyalty. Nearly half of shoppers say that interactions with well-functioning in-store tech increases their confidence which leads to more visits to store, frequent purchases and recommendations to others. A winning formula.

Here at Outform we continuously strive to innovate and overcome challenges, by providing insight, cutting-edge tech and creative in-store solutions, inspired by the latest advancements in technology and design.

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