fbp

 

Selling the smart home is about more than just displaying some cool products. Two new Nationwide Marketing Group programs — one focusing on merchandising, the other on offering tech support — prove why.

Rob Stott: All right, we’re back on the Independent Thinking podcast, coming to you from Houston, Texas at PrimeTime. Right now, one of my favorite interviews, always one of my favorite interviews, Derek Mattila. The tiny home is a thing that I can always get behind, I’d rather be in it constantly, but the VP of Connected Home Division here at Nationwide … Derek, I appreciate you taking the time, stepping away. I know you’re only a few paces from the tiny home and your spot on the floor here, but I appreciate you coming over and chatting.

Derek Mattila: Yeah, thanks, buddy. It’s good to sit down, and there’s been a lot of cool things going on here.

Rob Stott: Oh, I know-

Derek Mattila: It’s been an incredible show.

Rob Stott: This is one I’ve been looking forward to. I’ve walked around to a couple interviews with you, but now it’s me and you, man.

Derek Mattila: Yeah, that’s right.

Rob Stott: Now it’s me and you. Now we get to chit-chat and talk about what’s going on.

Derek Mattila: That’s right, that’s right.

Rob Stott: Well, first of all, I’ve been asking everyone, how has Houston been? How has Houston been to you?

Derek Mattila: Oh, it’s been great. The city is fantastic, first of all, despite a little bit of the weather that made some modifications to the schedule and the presentation and the location of our outdoor space-

Rob Stott: Outdoor moves indoor.

Derek Mattila: Outdoor moves indoor, they did a great job and the convention center’s been fantastic. The layout has been good, and I really like the way the whole area has set up to help accommodate a show of our size and all of our members.

Rob Stott: Yeah, it’s been a lot of fun. Like I say at the top, the connected home stuff, my background, you know, I come from the CE side, and covering it for a while. That tiny home is back here at PrimeTime, seen a lot of traffic going through it.

Derek Mattila: Yeah.

Rob Stott: There’s been a lot, it’s going to be tough for me not to focus on the tiny home this time.

Derek Mattila: Yeah, yeah.

Rob Stott: There is so much more happening in the connected home space here for Nationwide at PrimeTime. The one I want to start with is Tech Smart. We’ve sort of beat around the bush with this in the lead-up to PrimeTime, but now that we’re here and we can fully talk about this Tech Smart partnership, and the service side of things. A lot of the conversation to this point has been about the products, with the Google Nest program and getting Google Nest involved and some of the other vendors you see around the show floor. That’s the stuff that gets the consumer to buy product from the retailer, but then it’s that relationship after the fact.

Derek Mattila: Yeah, that’s right.

Rob Stott: Tell us a little bit about this Tech Smart partnership and what excites you about it.

Derek Mattila: Yeah, I think it’s really one of the missing pieces for the complete connected home experience and the complete connected home environment that we hadn’t had a chance to present or show at previous shows. It’s really one of the missing pieces to the entire category, to your point about the back-end support and creating good customer experiences. It was very obvious, through the building of the tiny home, how the delivery, install and setup processes were all distinctly different across a lot of our members’ conversations and a lot of the member feedback on why the category was so difficult.

As a result, because of that, we had to come and try to find a solution, and the good thing is that we were able to partner with Tech Smart USA, they’re a great company that does a great job in customer service and tech support, they have been doing it for a long time, and they have a great network of very good consumer- and customer-forward and customer-friendly technicians that can help you with all those challenges on the backside. After a customer leaves home, inevitably, when something breaks, they will help you without making you feel like you don’t know what you’re doing.

And it’s really important because I think that the continued evolution of the appliance category and the connected homes space is only going to put more pressure on the consumers as these things are interacting and talking and transitioning, all the way from the router, all the way up to every device that’s in the house. There’s more time for challenges. I always make the joke, I’m the tech support in my house, right? My mom, my wife, they love technology, and when they have a challenge, they generally make the first phone call to me to try to see, in fact, I probably think I felt my phone ring, it was probably a tech support call that I was getting ready to answer.

Rob Stott: Always on call, it never stops, right?

Derek Mattila: That’s right.

Rob Stott: It’s kind of an interesting dynamic there, in that you think about everything for the consumer, as they’re purchasing these products, it’s an exciting category. The technology itself is so innovative, and you’re talking about purchasing products that are intended to simplify life, and don’t get me wrong, they absolutely do. But this is the internet that we’re talking about, so inevitably, there’s going to be hiccups along the way.

Derek Mattila: Yeah, that’s right.

Rob Stott: For the consumer, it’s all about a seamless experience, and when it becomes un-seamless or not-so-seamless, finding a seamless way to bring it all back together is just as important.

Derek Mattila: That’s right.

Rob Stott: Because it can be frustrating. I’ve gotten mad, I’ve yelled at Alexa. She’s not happy with me, we don’t have the best relationship.

Derek Mattila: Exactly.

Rob Stott: It just doesn’t, it ruins, almost, that experience of what is supposed to be an incredible product. So to be able, for members now, to have a solution where they can have something for their customers to kind of continue that relationship and ensure that your consumer if there is those hiccups, you can make them happy.

Derek Mattila: Yeah, that’s right, exactly. And it’s always evolving, right? Every new product innovation that comes out, every new great benefit and feature, every new example of how innovation and technology does something great for our lives, it adds to that level of possible complexity and the possible challenges that happen.

Rob Stott: Absolutely.

Derek Mattila: We’re on the eve of a transition, we’re on the eve of a very big transition in the U.S., 5G and the speeds of internet, and 5G implementation that is going to put the house in a reconfiguration. It’s going to change the connectivity, it’s going to change the reliance on, and make everybody touch their router, touch their password, find their router, and go back and try to connect these devices again.

Rob Stott: What’s the number, I know we’ve talked about it, the number of devices per household right now?

Derek Mattila: Projecting out over the next couple of years, it’ll be over 21 devices per household.

Rob Stott: So that’s incredible, and think about the fact that the router you have in your home right now, if you want to take advantage of those 5G speeds which, by the end of 2020, I know the number’s going to increase exponentially across the U.S.

Derek Mattila: That’s right.

Rob Stott: Routers are going to be swapped out.

Derek Mattila: That’s right.

Rob Stott: And these are products that have already been purchased, that are in the home.

Derek Mattila: That’s right.

Rob Stott: That, if you have something like this Tech Smart program, and you’re capitalizing on it as a retailer, you’re going to have a customer that has 21 potential pain points that they’re going to have to put onto this new router and reconfigure, go back through their apps. It’s going to be nightmarish for them at times.

Derek Mattila: I’m not looking forward to it-

Rob Stott: Me either!

Derek Mattila: -which is why I grabbed a couple of the Tech Smart brochures so I can get three-year coverage so that I can start handing them out to family and friends that I have traditionally been the support for.

Rob Stott: “Here’s the guys to call, I might change my number.”

Derek Mattila: But you’re right, though, you think about that, 21 devices, all having to reconnect. And that tiny home was the experience that we kind of figured out that this is really a challenge. If we hadn’t built that from the ground, or in this case, the wheels up, and went through the pains of setting all those up, we may have overlooked that. We may have overlooked the importance of that function, and our members who came through the home talked about it over and over again, about how delivery and install and setup were distinct functions in making sure that these products were operating, and it was holding back these connected devices from being successful because of how hard it was.

So I’m hoping, and actually, I know that this relationship with Tech Smart’s going to be a fantastic opportunity for our members, it’s going to be a good relationship to introduce to our consumers, and it’s going to be a very good help. I’m just glad and very happy and proud that we’re helping provide a good solution to something ahead of time, as opposed to reacting on the backside, once this transition to 5G.

Rob Stott: Absolutely. We can’t go too long without talking about the tiny home, but I promise I’m only going to use it as a segue and transition.

Derek Mattila: Yeah, that’s right.

Rob Stott: When we were at New Orleans at the last show and talking about the reasoning behind it, it was, as you’ve mentioned, providing the experience, a way to showcase how these technologies come together. Obviously, a piece that has traveled and will continue to travel for Nationwide and bring foot traffic and attention to member stores across the country. But not every store can have a tiny home.

Derek Mattila: That’s right.

Rob Stott: Would love to have every store and every member be able to have a tiny home at their location, but just not feasible, not possible. So I know something else you’ve been working on is getting that experience down to a reasonable and easily integrated retail experience for members. So tell us a little bit about that and what that process has been like.

Derek Mattila: We immediately set out after, to your point, to try to create an executable model for retail, because to your point, that tiny home, you can’t roll that into a retail location. You can put it in the parking lot, but there are definitely limitations. It was designed to learn, inspire and create as a great event-based representation of the category, and it’s done very good for that. But we, immediately after that, went to building a retail display, utilizing tools and resources that are similar to what you would see in a current retail situation: standard shelving and standard slat walls and things that you would typically see in mini-retail, but then re-facing it, refreshing it, adding in technology to help as a guided sales and a guided training scenario and a kiosk, that we can help guide and shape what the consumer experience is within that environment.

So we partnered with a great retail company, Gorrie, which helped us in developing the vision and developing the presentation. The kiosk came out looking fantastic, the integration was fantastic, and I think it opens up the door for members that have maybe not considered one category or the other, either appliances, they’ve been more focused on appliances or more focused on CE, it helps them embrace pulling all those products together and putting them into one space. It’s only 12-by-20 space-

Rob Stott: Yeah, nothing overwhelming.

Derek Mattila: That’s right.

Rob Stott: It’s crazy. The tiny home itself isn’t an overwhelming presence because, at its heart, it’s tiny, right?

Derek Mattila: Yeah, right.

Rob Stott: To be able to take that same model, that same concept and idea, and put it in a retail store, where it does have a very similar impact on a smaller scale, is cool to see and something I think, I look forward to seeing how members configure it in the stores and kind of customize it for themselves and make it work.

Derek Mattila: That’s right, that’s right.

Rob Stott: It’s the whole point of this connected home space.

Derek Mattila: That’s right.

Rob Stott: What other challenges, we’ve hit on a couple of the challenges and how Nationwide is addressing those challenges; what other hurdles do you think still exist, or have you pinpointed and identified as hurdles for members and retailers in the connected home space?

Derek Mattila: Yeah, I think awareness and education on how to support setup and service is one of the big challenges. We touched a little bit about the kiosk and its role in helping that with the sales associates. But on the delivery and install area, there’s still a challenge with how do you go about in executing and setting up these connected home devices, and then accepting and taking responsibility for the entire home once you introduce them into a customer’s home.

I think we’re going to have to work really hard on the training scenario with not only the sales staff, so they confidently can present it and know that they’re presenting it, but they also have the backing of a confident and trained installer and delivery driver and setup team that can then make it a good experience for the customer in their home so the sales associate’s happy with it. And we’re going to have to develop a lot of content, a lot of partnership with all of our supporters, and I think you’ll see a lot more focus and a lot bigger push as the adoption starts to pick up within our membership.

Rob Stott: I see your eyes training on me as you talk about creating content. I see what you did there. Love the space, and obviously, anyway, we can help as a content team. I can get behind, you need me to do a little on-the-road podcast show with the tiny home? If I can work in me living in that thing somehow, for a short period of time, just a weekend, let me have it for a weekend.

Derek Mattila: I think we’ll be coming to a town near you very shortly, so keep that in mind.

Rob Stott: I might be there. Might be there and might be staying overnight. You can even charge me a hotel fee.

Derek Mattila: There you go. Free to stay, buddy, free to stay any time. You’re welcome to my house any time.

Rob Stott: That alone is worth the jump to Nationwide, I love it. I love it. No, but we’ve talked about a lot of the things that are going on at PrimeTime and that have been introduced here, and what you guys have coming down the pike. But what else excites you about the connected home space, maybe specifically the connected home division at Nationwide, as you look forward to the rest of 2020?

Derek Mattila: Well, I think we started off with it a little bit, but like I said before, we’re on the eve of this big transition in speeds and connectivity, and with our partnership with AT&T and some of the innovations they’ve got in delivering content, not only internet content but also programming, is really exciting. I think as we go through this transition to 5G, the opportunities that are building in how do you maximize and create great customer experiences with the content that’s being delivered is going to explode the ideas and create a whole new range and a whole new wave of retail innovation that we haven’t even really considered yet.

That partnership with AT&T is absolutely amazing because of the sharing, because of the like-mind in creating retail solution, and they do a fantastic job with helping come up with real, executable retail solutions. Quite frankly, they’re leading a new era of retail presentation and innovation that we haven’t really seen for a long time. I think that’s worth, I’m really excited about because I think you’re going to start to see these things blossom into some really fun, cool demonstrations which, in the end, I think will help create further differentiation for independent retailers and continue to create reasons to visit independent retailers in their local markets, because you’re going to see something, feel something as a consumer that’s better, cooler, funner, and it’s all intended to have a face-to-face interaction.

Rob Stott: Yeah, and I’m kind of thinking about just the space. The connected home has, in my mind, there’s lots of education and a lot of awareness that needs to happen still, as you mentioned, but in this channel, and I’m looking just across, how the show floor at this PrimeTime and past PrimeTimes is laid out. You think Nationwide Marketing Group, and obviously, there’s the furniture, bedding, appliance and CE channels and markets, but connected home is this thing that just feels like it could break down the walls that might exist between those categories.

Derek Mattila: That’s right.

Rob Stott: Because it is literally impacting furniture, it’s impacting bedding, it’s impacting consumer electronics, it’s impacting appliances.

Derek Mattila: That’s right.

Rob Stott: There’s no better example than what’s going on in that tiny home.

Derek Mattila: Yeah, exactly right.

Rob Stott: There’s no reason that members can’t, might not have a single piece of electronics in your store, but it doesn’t mean you shouldn’t be thinking about the tiny home… or connected home.

Derek Mattila: The connected home. Tiny home.

Rob Stott: Clear over my head, I’m still on the tiny home.

Derek Mattila: It does that, it steals the show. It’s funny how it does that.

Rob Stott: It attaches itself to your brain and you can’t get it out. You can’t not be thinking about the connected home.

Derek Mattila: That’s right, exactly. And to your point, at some point in the near future, just about every product we buy is going to be connected, and so by doing this, putting this investment now, we’re actually on the cusp, we’re on the front side of this development and the launch and the activity that’s happening, and we’re putting our members in a really good spot to be ready for these things, so we don’t miss waves of retail opportunities, like in the past with the computer business, maybe. Or maybe with the gaming business, or some of the other product categories, the innovation categories that members weren’t, we weren’t quite prepared to help service to make it a good experience, and then a good back-end experience for the consumers.

Rob Stott: Not to mention that the $490 billion number that we continue to hear about.

Derek Mattila: That’s right.

Rob Stott: If you need one more reason, one reason at all, that number alone, a billion with a “B.” Just think about that.

Derek Mattila: That’s exactly right.

Rob Stott: The opportunity that’s there for you as a retailer.

Derek Mattila: That’s right.

Rob Stott: Mr. Mattila, I always appreciate you stepping in and chatting, so this was a good time as always. I’ll let you get back out there on the show floor for a little bit longer.

Derek Mattila: Great, great job. Great job on a great show, too. Thank you.

Rob Stott: Thank you. No, appreciate it.

Derek Mattila: All right, buddy. Thanks.