Selling the Smart Home

Written by Rob Stott

March 2, 2020

If you’ve grown up around the retail industry, you know that success in this space is almost entirely incumbent upon your ability to develop strong relationships. At its core, the act of a retail transaction is built around the relationship between the customer and the retailer. But that’s just the tip of the iceberg.

Retail relationships extend to the brands that line the store’s shelves, to the distributors they receive product from, to the services vendors that they call upon to help their store operate efficiently and even to the other businesses in their community. Of course, there’s also the relationship between the retailer and their buying group — which our team here at Nationwide Marketing Group knows a thing or two about.

Relationships are key to what we have strived to provide our members over the last half century. And it’s those same relationships — and a number of industry-leading and group-exclusive programs — that are giving our members the tools they need to stand out above their competition and excel in this new era of selling a connected in-home experience.

The Smart Home Opportunity

Whether we want to admit it or not, technology is quickly creeping its way into every corner of the home. In our time at the Consumer Electronics Show this year, we saw sensors and smart technology in everything from major home appliances and toilets to mattresses, furniture and more.

But we don’t view this technological transformation as a reason for independents to be concerned about their business. Rather, smart home technology presents a massive opportunity for the independent channel.

According to data from Google, the connected home industry represents a $490 billion annual market. But there’s tons of room for that number to grow exponentially. Analysis from Statista shows that just 32.4 percent of homes in the United States have at least one installed smart home device, and that number is expected to exceed 52 percent by 2024. What’s more exciting is the fact that more than 42 percent of first-time Google Nest buyers buy another connected home product within the first month of their initial purchase.

“This is technology that helps you live a better life, rather than technology for technology’s sake,” says Nationwide President and Chief Member Advocate Tom Hickman. “We’ve identified the connected home as the next big opportunity for our retailers, and I believe we have an obligation and responsibility to help them get it right. We can’t squander this multi-billion-dollar opportunity.”

To get there, we believe retailers have two major hurdles they need to overcome: awareness around smart home technology and educating consumers on how all of this stuff works. Part of the challenge has been a lack of available tools and resources to help them close the gap with their customers. And that’s where we’ve leaned in on the relationships we’ve cultivated with our vendor partners. The result is a number of unique and exclusive programs designed to make selling the connected home experience a breeze for independent retailers. In particular, our close relationships with Google Nest, DSI Systems and AT&T have enabled us to launch several industry-leading programs that will give our members a major leg up over big box competition — and allow them to cash in on this booming market.

Another way we’re pushing retailers forward in this space is through the launch of Nationwide Connected Home, the industry’s first, and only, connected home division designed specifically for the independent channel. Having access to the technology and tools to help sell the smart home is great. But we plan to help retailers bring the story together, help customers get their products installed, and then provide ways for our members to continually service those products and maintain lasting relationships with their customers.

Gaining Access with Google

Success in the connected home space begins with the products. Retailers need access to the types of devices and gadgets that consumers crave. That includes things like security cameras, smart speakers, smart doorbell cameras, Wi-Fi routers, hubs, thermostats, smart plugs and more. In that regard, there may be no more-recognizable name in the industry than Google Nest.

Our relationship with the search giant extends back several years. When the decision was made to go all in on the digital side of the business, which coincided with the our partnership with RWS and the addition of Site on Time, we doubled down on that commitment by becoming active in the Google Partner program — a program that recognizes and elevates companies that understand how to build and optimize websites utilizing Google’s AdWords tools. Further, the program is tiered to distinguish the best-of-the-best in the business. We’re proud to say that we achieved top-tier Premier Partner status in near record-setting time.

Since then, our relationship with Google has evolved from the digital side of things to the product side. In 2017, we rolled out a Pro-Tail program for our custom installation members. The program gave them access to select Google Nest products that they could incorporate into their clients’ home automation projects. After the success of the Pro-Tail program, we opted to go all in once again with the consumer tech company, announcing the Google Nest Prime Retail Program in early January.

“The Google Nest Prime Retail Program is providing our independent retail members with wider access to Google Nest connected home products,” Hank Alexander, director of Home Technology Specialists Nationwide, says of the program. “This is really about giving our members access to industry-leading connected home devices and positioning them at the forefront of the booming connected home category.”

With the Prime Retail Program, exclusive to Nationwide, our independent retailers have streamlined access to the entire Google Nest portfolio. Distribution is provided coast to coast by Audio America, meaning retailers can place these products on their shelves, and offer — perhaps for the first time ever — the latest and best smart home products to their customers.

But beyond just gaining access to the connected home category, the Google Nest Prime Retail Program provides our dealers with an incredible opportunity to sell these products and actually make some money on them. Profitability is something that has historically been a major challenge for retailers considering selling connected home products, and that’s where we’ve worked with Google to create a program that has unheard of margins on the Google Nest line.

It’s important to note that this program is intended for all of our members, regardless of their primary product category. You don’t have to be an electronics store to sell connected home devices. This category has crept its way into every room in the home, and, as such, it behooves retailers to start thinking outside the box in terms of how they can incorporate this technology into their product mix — if they haven’t already. The connected home is a talking point with the customer, and it can turn the retailer’s store into a smart home destination in their market.

Connectivity Is King

Smart gadgets only tell a portion of the story when it comes to the connected home. In order to actually connect all of those products within the home and then control them, you need an Internet connection and wireless service.

Enter, DSI Systems and AT&T.

In early 2019, we announced a major partnership with AT&T and DSI that brought small-footprint AT&T displays (with zero inventory obligations) into members’ stores. This group-exclusive program allowed independent retailers, for the first time, to begin selling wireless phone service and the latest smartphones to their customers. Powered by DSI, the system cut the total approval and activation process down to roughly 15 minutes — a stark contrast to any other national chain’s in-store wireless service experience.

Our members have realized instantaneous success with this program. More than $1 million has been paid out to our members in commissions to date, and we’ve worked with AT&T to educate and certify over 200 retailers as AT&T Champions since last summer.

But beyond the smartphone and wireless service, bringing AT&T into independent retailers’ stores means we’re giving them the opportunity to offer in-home Wi-Fi and DIRECTV entertainment services. And, later this year, AT&T will begin offering its AT&T TV streaming service. This brings the complete package of smartphones, wireless service, in-home broadband and entertainment services right to our members’ stores in an easy-to-integrate display area.

“The phone has essentially become our remote control to the smart home, whether we’re in our homes or on the go,” says Eric Sindelar, director of connected services for Nationwide. “Being able to provide those services as a retailer puts you in prime position to win new, recurring business. And with these entertainment services and more connected devices being added to the in-home network regularly, we’re going to see a need for faster internet speeds. Our relationship with AT&T and DSI allows our members to offer their customers exactly what they need to power their connected home.”

Without that connectivity, the smart home cannot exist. And with this AT&T program, our independent retail members can tell that story and demonstrate it for their customers right in their showroom.

An Evolving Retail Experience

Smart home technology has had a tremendous impact on the in-home experience. But it’s also had a tremendous impact on the retail experience, from the way consumers research these products, to the physical purchase process, to how products are serviced.

“With so many connected products operating on several platforms, with products purchased likely from several different retailers, it is becoming increasingly hard for a retailer to take responsibility for the entire ecosystem,” says Derek Mattila, vice president of Nationwide’s connected home division.

Technology will continue to change at breakneck speeds, and retailers that are going to succeed in this day and age need to evolve right alongside it. But the best part is, they don’t have to do it alone. The programs and relationships that we’ve developed with vendor, distribution and service partners in this space are designed to be just as innovative and flexible as the industries they serve.

We consider relationship building to be a major strength of ours. It allows us to serve as the bridge between major brands and independent retailers, as well as past trends and future opportunities. And in a cutthroat industry like retail, we think having a partner like that — one who helps you strengthen your own relationships with your partners and customers — is our responsibility.

The only way to take advantage of all of these programs and exclusive opportunities is to be a part of the Nationwide Marketing Group family. If tapping into a $490 billion smart home market is something that interests you, and if you want to take part in this revolutionary retail opportunity, reach out to us. Visit www.nationwidegroup.org for more info. We can’t wait to hear from you.

This article was first published in the March 2020 issue of The Retail Observer.


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