Survival of the smartest

Now that smart homes are truly smart, technology journalist Rob Lane says it’s time for bricks-and-mortar retailers to exploit this growing market and outsmart the internet

The term ‘smart home’ has finally come to mean what it says and live up to its mid-Noughties billing. Today’s homes really can be smart, and there are more opportunities than ever for AV integrators and retailers to make a decent living from giving our homes an intelligent makeover.

But now that smart really does mean smart, can bricks-and-mortar retailers exploit what is surely a golden opportunity to add value to hi-fi and AV sales that continue to be hit by online price-cutters?

I cut my teeth as a journalist in the residential AV sector back in 1995, having been lucky enough to land what was only my second professional gig as deputy editor on the launch of a well-known – and still publishing – home-cinema magazine.

Back then, retailers were yet to see the internet as a threat to bricks-and-mortar sales – because it wasn’t. The golden age for hi-fi sales may have been a distant memory, but in the mid-Nineties retailers were yet to appreciate that they would soon never have it so good. Jump forward just three years to 1998, and they were already discussing the threat the internet posed to their very existence – a conversation that continues to this day.

Today, most retailers would give their eye teeth to transport their outlets back in time to the mid-Nineties. Indeed, they’d surely gladly compromise on the mid-Noughties too – such has been the continued growth and impact of online sales since.

The big sea change in the mid-Nineties was the arrival of the huge AV integrated amps and speakers, and massive CRT and rear-projection TVs. Retailers really had to rise to the finding-space-for-kit challenge, while accepting that these products would never have mass-market appeal.

Luckily, at the same time, mass-market hi-fi was shrinking, becoming even more mainstream into the bargain. Stackable pseudo-separates systems were rapidly replaced by first mini, then midi, systems. Early (and awful) MP3 players added to the sense that two-channel was miniaturising, and these shiny, smaller components were a boon to the likes of John Lewis.

The smart-home revolution is surely the first time since internet retailing took hold in the late Nineties that bricks-and-mortar has the upper hand

It wasn’t until the early Noughties, a few years after the arrival of DVD, that home cinema began to follow suit, with an explosion of so-called one-box systems. One publisher even launched a magazine aimed squarely at this burgeoning market, with me at the helm. Exciting times, as AV suddenly went mainstream.

TVs were slimming down, too, with heavyweight plasmas being joined – slowly at first – by lighter LCD models that would ultimately herald the mass-market appeal of the big-screen TV.

Unfortunately, the light quickly faded on the one-box AV explosion as quickly as it had sparked. For retailers, there was now a financial hole as well, with shelf space to fill, just as the internet was really taking hold.

Indeed, it wasn’t long before hi-fi mini/midi systems followed suit, disappearing from shelves after years of revenue-boosting ubiquity. Retailers on the high street – threatened like never before by the power of Amazon and other online retailers – began to really feel the pinch, as margins on flat-screen TVs plummeted.

Fast-forward to today and products like Sonos have breathed some life into retailers, having a similar – if less broad-reaching – mass-market effect to the midi system and its close cousin the one-box cinema.

But what of smart-home solutions? This is certainly a market ripe for exploitation, but in spite of the arrival of a steady stream of products, retail sales continue to suffer growing pains thanks to a variety of factors.

Complexity is one of the issues, and this probably goes hand in hand with the fact that, when it comes to many smart-home products, retail display is a challenge. How do you encourage consumers to buy something that they might not easily be able to see and touch in-store? Tricky…

Another problem is market fragmentation. This was OK in the mid-Nineties, when rear-projection TVs were situated away from AV amps on the sales floor, but one of the USPs of smart-home solutions is the totality of their integration potential. It’s no longer enough to rack home-cinema products in one area of stores, with hi-fi in the other. Smart-home solutions demand whole-system sales processes.

Add to this the need for staff education and progressive, visceral and descriptive retail p-o-s, and is it any wonder that some retailers are struggling with making a fist of smart home, even in the face of increasing pressure to offset online sales competition.

The opportunity is a golden one. Online it’s easy to box-shift hi-fi and AV, while undercutting in-store prices, but the smart home is a much more difficult sell.

On the high street, the opportunity is there to educate, enthuse and also defragment each smart-home solution, while perhaps also offering integration services, so that customers have no viable alternative other than to purchase in-store.

It’s certainly not easy and requires a lot of thought, investment and in-store processes, but the smart-home revolution is surely the first time since internet retailing took hold in the late Nineties that bricks-and-mortar has the upper hand.

Pictured top is the smart apartment at the Hughes store in Ipswich