The smart home is here (because retailers are going all in)

We’ve learned, through years of work with sustainable product manufacturers, that growing sales without good retail distribution can be a steep uphill battle. It’s always a bit of a “chicken or egg” game. Retailers want manufacturers to prove consumer demand for products before they’ll commit precious shelf space. But most mainstream consumers remain largely unaware of more sustainable options and are unwilling to adopt them until they start seeing them at shelf.

But consumer interest in and demand for smart home products/apps is growing astronomically, and retailers have decided to get on board this fast-moving train.

The ThroughTek (Kalay platform developer) 2015 Internet of Challenges Report released in June found that 31% of Americans “believe a fully connected home will be achievable in the next year,” and 60 percent think it will happen within the next five years.

Our fresh-from-the-field 2015 Energy Pulse data shows that 35% of smartphone/tablet owners already use their mobile device to monitor or control home functions, and 62% of those who don’t say they plan to do so within the next year! Why the confidence? We think it’s because they’re seeing it at retail, and the technology is beginning to feel less risky and more “normative.”

Last year, Best Buy announced that it’s updating 400 stores to include Connected Home departments, where an increasing number of products by Nest, Belkin WeMo and other similar brands will have designated shelf space.

At the 2015 Consumer Electronics Show (CES) in Las Vegas, Lowe’s (Iris) displayed a “fully realized” smart home. And 1,500 select Lowe’s stores around the country are featuring these new, innovative products in precious endcap advertising space.

My local Home Depot is also featuring their Wink line of connected home products in the most visible front-of-the store endcap space.

Walmart now has a “Your Life. Connected: Home Automation” site. Featured products include smart thermostats, lighting, locks and Wi-Fi cameras.

Sears has started to put Connected Solutions Shops in 200 Sears and 300 Kmart stores around the country. Each one features a 50-foot aisle stocked with live displays of over 100 wireless products, including wearables, locks, garage door openers, thermostats, motion sensors and monitors. Sears is also planning a major demo-home prototype display in one California city.

Finally, Target rolled out Connected Life departments in 1,800 stores in May, featuring connected light bulbs, baby monitors, sprinklers, doorbells and more. And in July, the company launched Target Open House in San Francisco’s Metreon shopping center. The display, which is described as “part retail space, part lab, part meeting venue for the connected home tech community” is a futuristic interactive exhibit featuring a transparent, acrylic “house” to better highlight the devices and their uses.

While retailers are embracing connected home technologies, “right sizing” is still a challenge. In some cases, retailers have reportedly pulled back displays because of limited sales and/or product availability. Distribution is currently pretty targeted to high-propensity markets. But with the growing interest, it’s likely that major retailers will continue to grow shelf space for connected home devices as sales grow.

By the way, while the terms “connected home” and “smart home” are often used interchangeably by consumers, and Contractors.com notes the terms are currently “not regulated by any particular government, group or agency,” they are distinctly different to manufacturers and contractors.

In a recent report, The American and EMEA Markets for Thermostats, IHS defines “smart” thermostats as those that are connected to the Internet and make automatic adjustment decisions.

Retailers are adding to the confusion. For example, click on Walmart’s “Your Life. Connected: Home Automation” site and the smart thermostat link takes you to standard programmable thermostats (which are not considered smart), as well as sensing thermostats (like Lyric) and learning thermostats (like Nest).

Keep your eye out to learn more about consumer adoption of and desire for smart/connected home products and differing perceptions of these terms in an upcoming, downloadable report featuring juicy insights from our 2015 Energy Pulse study in November.