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Does the Internet of Things need a showroom experience?

December 16, 2015Written by Tom Ryan

Four early employees of Nest Lab, acquired by Google last year, have opened the first brick-and-mortar store dedicated to the Internet of Things.

Located in Palo Alto, the software-powered store, b8ta, currently has 60 items, some available at Best Buy and many heretofore only available online. The category range includes: connected home, electric transportation, smart toys and sensory augmentation devices.

In a twist, b8ta's business model relies on manufacturers paying a monthly subscription fee to be in the store. The Los Angeles Times likened the relationship to slotting allowances charged by grocers.

For consumers, the store offers advantages to the online experience in selling gadgets since customers can touch and try the merchandise. It also breaks from traditional physical retail, not only because all products are displayed outside their boxes but also in spaces such as a kitchen or living room to help consumers understand how Internet of Things devices work with each other. Real-time information for every product, including inventory, reviews and price comparisons, are also available.

b8ta Launch Preview - Photo: b8ta

But the biggest beneficiaries are the device makers that have been forced to sell products directly on their websites or through crowdfunding campaigns. Product can arrive at b8ta's store "in a matter of days, where similar deals with traditional retailers can take upwards of a year," according to a statement.

Moreover, rather than counting on a third-party retailer to nurture a new product to market, vendors are given complete control over marketing, pricing, training and inventory from an intuitive online dashboard. Changes sync automatically through in-store signage, accompanied by notifications to store staff. Real-time insight into conversion metrics enable vendors to "curate every step of the customer journey to control their brand identity and consistency."

A challenge appears to be drawing traffic to attract new subscriptions. Wrote Mark Bergen for re/code, "Despite techy buzz, drones, smart-home gadgets and virtual reality things have not hit enough sales to be a full-on category, let alone a holiday fad."

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