Target’s Open House in a shopping center near Yerba Buena Gardens in San Francisco is tucked underneath the retailer’s own City Target. The space isn’t huge, but it’s effective. Interactive displays pop up when you approach to give you speech bubbles that tell you what each product can do.
The Sears connected home showcase down the road in San Bruno is an even more effective display, largely because the retailer sells the kinds of appliances — stoves, ovens, washers and dryers, refrigerators, water heaters — that serve in a major way as a home’s connective tissue.
Both, however, act as a bellwether of sorts — that the Internet of Things has arrived. But not because consumers have all reached a Jetsons-like, space-age era that once seemed so fanciful. Rather, these devices offer meaningful ways to save energy and run hectic lives — at price points that have come down far enough for these once-seemingly unreachable devices to be considered by many more consumers.
Is this a way out for Sears?
There will always be a few customers buying appliances at the high end, with fancy, on-trend finishes, superior design, and elite performance. But for the most part, retailers like Best Buy and Sears — and even many of their local competitors — have competed on price. The Sunday circulars are rife with the low low prices and shoppers know to hit the stores on a holiday for extra savings.
But these “smart” devices could carve out a separate niche, especially for Sears. The retailer sells just about everything that exists in this IoT category in its Connected Solutions center, from baby monitors and routers to washer-dryer systems, plus the extension cords and hubs needed to get everything going.
On top of that, Sears has the added benefit of the technicians and repair folk that it has long employed. With these type of gadgets, those technicians will have to be even more skilled. But they can help newbies set things up and be available to troubleshoot along the way.
“What we’re trying to do is not just the products — we carry all the products,” Ryan Ciovacco, Sears president of consumer electronics and connected solutions, told Retail Dive. “We’re really trying to educate people and find out from them how we can solve those ‘pain points.’
"For example, some things are overwhelming to set up, there’s a learning curve. We have the tech support, people specialized in connected devices, and they’re a phone call away. They understand the products and they’ll troubleshoot all the way back to the router, which [is] usually the issue.”
Plus, while most of these devices by now are designed for “DIY” installation, many people don’t want to take the trouble to do it themselves, Ciovacco says, so Sears offers that too.
The marketing potential of IoT
Another reason that many of these devices are more likely to catch the attention of even budget-minded consumers than they did before is their ability to render big savings on their electricity, gas, and/or other energy bills.
“When you look at the way we have our products structured, we’re focused more on solutions than just products,” Ciovacco says. “It is cool that I can turn my temperature up or down from my phone, but it’s more than that. I also save energy, and when I save energy, I save money. So it’s not just the WiFi thermostat. It’s also Sears’ ability to put in energy-efficient windows and doors, to put in insulation that improves energy efficiency, along with the connected thermostat.”
Target also emphasized the energy-saving potential of the devices that helped with that in its showroom, notably its thermostats and connected power outlets. Those are items with fairly significant markups for what they are — a Nest thermostat , for example, sells for $249.00 there compared to a programmable (but otherwise non-smart) one for less than half that.
But Target’s appeal is more toward the Jetson side of things — cool, well designed smart devices that have many practical applications (but, to repeat, are really cool). At the Open House, Target has 35 items on display, including slow cookers, lamps, Sonos speakers, locks, doorbells, and tiles that help you locate your keys.
Still, while some of these smaller bore items may not be huge energy savers, they can make life easier. There's no more "Did I turn the iron off?" when you leave for vacation; as long as you've plugged it into a smart outlet, you can double-check that from the airport gate area. You can program locks to let in dog-walkers or workers at certain times, but not others.
IoT could 'pay for itself'
What is striking, even at Target where some of the items were on the out-there side (a smart baby onesie?) is that many of the things in its showroom are priced within reach. Again, the items may have been more than their non-smart (dumb?) counterparts, but nothing that would incite a gasp.
In fact, the difference in price seems in line with the added capabilities. (With larger appliances, like many of those bigger appliances available at Sears, the setup requires the purchase of an additional hub to connect it to the existing router. Many Sonos fans have also learned this the hard way).
“I think the price points are probably where they should be. What you have to consider is what it can do for you,” Ciovacco told Retail Dive. “A $250 wi-fi thermostat may not be worth it. That is, if you’re just using it because you can control it with your phone, it’s overpriced. But if you use it and take advantage of its ability to save energy, you can unlock a lot of savings that more than pays for itself.”
