IoT and Retail: Is 2015 the breakaway year? CEO Breakfast CES

CONTEXT CEO Retail Breakfast, CES 2015.

CONTEXT CEO Retail Breakfast, CES 2015.

In January, we were in Las Vegas at CES hosting our first Retail CEO breakfast with Régis Schultz, CEO of Darty and Hans Carpels the President of EURONICS International. They were joined by senior members of the Darty and EURONICS teams as well as other European retailers and senior representatives from the industry.

We asked our two Retail CEO’s to talk about the new products and formats they are deploying in 2015. They both confirmed that wearables and smart home products are a big focus for retail in 2015 – this could be the breakaway year.

For Hans Carpels IoT is one of the main topics for 2015, but the landscape is complex and fragmented, and it is not easy to serve as a retailer. Interoperability of devices is a major concern of consumers, and a as a way of recognising this, EURONICS announced at CES and that they have joined the AllSeen Alliance, led by Qualcomm, and are thereby targeting a leading position in smart home solutions. The EURONICS offer will depend on the size of their stores with 800 square metres being multi-specialists and the smaller formats being hyper-specialists. Carpels did not exclude the possibility that there may be some hyper-specialist stores entirely dedicated to the sale of connected products and wearables, the same as the Lick and Fnac formats in France, and which we have not yet seen in other European countries.

When Régis Schultz addressed us he lamented the fact that for a company that aspires to sell technology their own salesmen and stores are not adequately equipped. He has set it as a strategic priority to change that with the Digitalisation of Darty, one of the planks of his 4D strategy.  For Régis who started his career in an FMCG company where they always spoke about consumers, the whole raison d’être of retail is to transform the ‘consumer’ into a ‘customer’- that’s where the real value lies and where the profit comes. So it is impressive to note that the attach rate of installation to the sale of Nest products is 75% and that their service department is also installing Nests for customers who have bought their thermostat from sources other than Darty.

Regis spoke of the creation of the Darty button. The customer presses it – it’s like a technology panic button and you are called back by the Darty service centre who are on call 24/7. 1,000’s of people have subscribed to this service and it demonstrates Darty making a reality of profitable service revenues linked to the IoT – and other retailers have shown that they are keen to follow Darty’s lead.

We ended the breakfast taking the temperature of confidence about 2015. “From a product and solution side, we’re really upbeat. There are many new products and areas where we can add value.” said Carpels. “But we have to be realistic,” he continued. “There is a lot of education of the consumer to do. Only 5% of consumers know where to buy IoT solutions”, he quoted from a survey. I asked them if they thought that a product such as Nest smart thermostat could take off this year – with its £180 retail price tag there was a lot of doubt from our two CEO’s that consumers at a time of falling energy prices would see the value compared to a normal thermostat. But the jury is still out which makes 2015 an exciting year. He also spoke of France and Italy as stressed economies with real issues in Russia, Kazahkstan and Ukraine, in all of which countries EURONICS has operations.

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