Target designing stores as go-to place for smart home tech

Discussion
Photo: Target
Jun 07, 2016

Last summer Target opened Open House in San Francisco, a combination retail store, learning lab and meeting place for professionals focused on smart home technology. At the time, it was expected the retailer would continue to pursue the smart home opportunity. Now comes word that Target is taking a second step in that direction with a pilot of Connected Living, an area within the consumer electronics department of one of the chain’s stores in Minnetonka, MN.

Taking lessons learned from its Open House experience, Target is making use of a LED screens and discovery tables to show how smart home tech works in practice. Connected Living sections will be organized into six device areas:

  1. Family fitness
  2. Connected kitchen
  3. Virtual guardians
  4. Connected nursery
  5. Rest and relaxation
  6. Item trackers and smart buttons

“There is tremendous untapped potential here, and we’ve been steadily adding more connected products to our assortment.” said Scott Nygaard, senior vice president, merchandising, hardlines, in a statement. “But the market is still early and consumers are focused on single-use, single-benefit products. Our goal is to educate and inspire guests about the potential of connected devices, and take learnings from the test to refine the experience with the hope of eventually expanding it to more stores.”

Casey Carl, chief strategy and innovation officer for Target, said the chain has learned three lessons from its Open House experience.

“Storytelling is key to helping guests understand how they might use connected devices, having a knowledgeable team member on hand is extremely important and guests want to see products in a real-life setting,” he said.

After Minnetonka, Target is planning to bring the Connected Living concept to stores in Cupertino, CA and the Tribeca section of New York City.

DISCUSSION QUESTIONS: Do you see Target as being prudent or overly cautious in its approach to the Internet of Things opportunity? Which of the three lessons Target has learned from its Open House experience do you see as most important to its success in IoT tech?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"As consumer knowledge grows, so should Target's commitment to the technology."
"Target is being SMART. IoT in the home will peak in a few years then fizzle back to the basics that work and the items that just did not fly."
"Good to be one step ahead of the customer, not so wise to try to lap them. Right now the technology is leading the market, not the other way around."

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11 Comments on "Target designing stores as go-to place for smart home tech"


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Max Goldberg
Guest

I think Target is being prudent. The IoT is still in its infancy, with many questions to be answered about privacy and hackability. The overwhelming majority of consumers know little or nothing about many IoT devices. Storytelling, knowledgeable staff and hands on demonstrations will be the way to educate consumers. As consumer knowledge grows, so should Target’s commitment to the technology.

Kim Garretson
Guest
5 years 11 months ago
Two comments. There is a lot of media buzz around slow adoption, like this: “Most consumers lack interest in technology encapsulating the ‘internet of things’ in their homes amid ignorance of its benefits, a new study has found. PwC said 72 per cent of those surveyed said they were unlikely to introduce connected-home technologies like smart heating systems, renewable energy devices or automated cleaning appliances over the next two to five years, and were unwilling to pay for it.” Meanwhile, there are also predictions that the benefits will become evident as the entire digital ecosystem shifts from one in which consumers seek out and discover actions to perform and information to consume, to a world where “stuff” just shows up and happens. Read a post titled The Big Reverse of the Web by Dries Buytaert for more on this coming evolution. My view is that Target’s timing and slow rollout is smart, especially when you look at its competitors and their efforts, even Sears. The world will evolve where consumers who aren’t interested today will… Read more »
Ryan Mathews
BrainTrust

I’d say they are being prudent. Good to be one step ahead of the customer, not so wise to try to lap them. Right now the technology is leading the market, not the other way around.

As to the most important lesson, I’d say it is appreciating the value of storytelling. Without the story of a customer’s life, technology is, well, just a gimmick. If certain IoT technologies are ever to ever be accepted, the key will be introducing them with a great story.

Nikki Baird
BrainTrust
Nikki Baird
VP of Strategy, Aptos
5 years 11 months ago

The reality is that more and more products come with technology either in them or necessary in order to make them work. I’m still not sold on a smart-home — I’m still scarred from trying out the Kivo (keyless entry system) and standing on my porch waving my phone at the lock which would not let me in my own home. And I’m convinced there will be a news headline someday soon (if not already): “Family forced to send Bitcoins to Russian hackers to turn their refrigerator back on.”

That said, the tide is inevitable. It may be the early days still, and this version 1.0 from Target may not last or may have to be rebooted at some point, but they’re smart to dip their toes in the water. Selling smart tech is not the same as selling, say, peanut butter. You kind of have to put more effort into it. Better to learn that now than when it really counts.

Anne Howe
Guest

Having the right people in place to deliver the storytelling strategy in an engaging and convincing manner will be key to success at Target.

About three years ago we were looking at Sonos for our under-construction new home and, while Target had the product, there wasn’t any person in the electronics department who could explain the system. I had seen Sonos in action at a friend’s house but in the end there was no-one who could get my hubby over the confidence barrier. P.S. — Best Buy couldn’t do it either.

Kudos to Target for being willing and confident in the “test and learn” phase. It’s only a matter of time before smart-home tech becomes embedded in tens of millions of homes. But I wonder how expansive Target’s roll-out can be given the associate issues most mass retailers have to contend with.

Tom Redd
Guest

Target is being SMART. IoT in the home will peak in a few years then fizzle back to the basics that work and the items that just did not fly. Quality will be the top issue — some IoT devices for home are junk. Others are virus-inviting disasters — want a virus running your air conditioning, TV and security system? They are on the way to your house. Little is said about this issue, but the hackers are on it. If there is an IP address that is not secure they will find it. The next tier of IoT — two years off — will be secured and the trend will be shoppers asking about security FIRST then considering how hip it makes them look.

Camille P. Schuster, PhD.
BrainTrust

It’s good to experiment and to try to get in sync with consumers. But which consumers — knowledgeable consumers, first adopters, curious consumers or slightly interested consumers? How many different versions of the store will exist? Where does home technology stop? Are they trying to be Best Buy?

Lee Peterson
BrainTrust

Target’s spot on with this idea. In general, stores need to become something much different than what they are now. Their execution of some great forward-thinking goes a long way to defining a piece of what stores will become. Between this, Samsung’s 837 in NYC and the “UO Space” shops by Urban Outfitters, we’re starting to get a much clearer picture of what the vintage term “store” will mean. Thanks for taking the risk, Target. Glad someone has the guts.

Brian Numainville
BrainTrust

This is a good move. IoT and smart home tech is still very immature, with a lack of standards. However, unless there are knowledgeable associates that really understand the offerings, this won’t work well. Many people simply don’t understand this stuff yet and if the people selling it don’t that won’t instill much confidence in the buyer.

Ken Morris
BrainTrust
Ken Morris
Managing Partner Cambridge Retail Advisors
5 years 11 months ago

Consumer adoption for IoT products has been a slow trickle. The slow adoption has a lot to do with the lack of consumer awareness and understanding of a compelling value proposition for these products. Target is taking a smart approach by offering an environment where shoppers can try IoT products in a simulated home environment to understand how these things work and evaluate if this is something of value for them. Even if Target doesn’t sell a ton of IoT products, it will bring more consumers into their stores and shoppers will have a positive perception of Target as a trusted advisor for innovative technology.

Many consumers enjoy the theater of shopping and Target’s Connected Living concept will definitely resonate with these shoppers. It’s just another reason to visit the store that the online experience cannot duplicate.

Chuck Palmer
BrainTrust

This is a unique category and opportunity. If Target can succeed in being the translator of the noise of innovation for the average consumer, they’ll win this emerging category. Can I trust them to tell me how this could work for me in my daily life?

Knowledgeable staff and innovative displays showing how these items work together for consumers’ benefit is the win. IF they can pull this off at scale, they could really own this category. Why Best Buy isn’t all over this is beyond me.

wpDiscuz
Braintrust
"As consumer knowledge grows, so should Target's commitment to the technology."
"Target is being SMART. IoT in the home will peak in a few years then fizzle back to the basics that work and the items that just did not fly."
"Good to be one step ahead of the customer, not so wise to try to lap them. Right now the technology is leading the market, not the other way around."

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