The second CONTEXT Smart Channels Summit took place on 26th February at the DISTREE conference in Monaco. The seven guest speakers all had one thing in common – they sell Smart Home and they want to be trusted by the end customer.
The theme of the conference was channels to market for Smart Home. Whilst last year the talk was about breakthrough, this year it was about crossing the chasm – emphasising the hard work needed for smart home technology to be widely adopted. There remains an underlying optimism – our opening speaker, Luigi Salmoiraghi, started his presentation with a slide that was the same as the one he had used last year – apart from one additional word. It read: “Keep calm – I am still the next big thing!” CONTEXT figures support this – there are small revenues in smart home but they grew by 151% year-on-year in 2015 across all of Europe while the rest of our panel showed a modest revenue growth of 3.1%.
From all the presentations it became clear that a multi-channel strategy is a vital part of selling smart home. Diederik Nederlof, Sales Director of tado, gave an insight into the different advantages of four of the nine channels to market which CONTEXT has identified – online, ICT retail, DIY retail and custom installers. Luigi Salmoiraghi of D-Link would not be drawn on which he prefers: “They all have their place”, he responded diplomatically to the question. But he threw out a challenge to the traditional channels: As online shopping continues to grow at the expense of store visits, the premium in the future will on creating unique, brand-defining experiences that keep customers coming back- whatever the channel.
Distribution can play a vital role in growing Smart Home. Mark Hotter, a Marketing Director from Exertis, presented a full-service offering that goes way beyond the fulfillment process. Without any doubt Exertis was a driving force behind the growth of the UK market in 2015, and the industry would be well advised to include distribution as part of their channel strategy.
It’s also about understanding the end customer, and in Smart Home there is a vital role for customised service, for which Benoît Van den Bulcke, Director of FFD, has coined the expression SHAAS – Smart Home as a service. The characteristics of the end customer were analysed by Mike Lange, VP of Sales & Marketing from Z-Wave, who described three types of people. The first two – DIY and do it for me (DIFM) – are well known and catered for by specific channels, but the third type is what many hopeful DIY customers end up becoming – do it with me (DIWM). They start out thinking that they can do it themselves and then end up crying for help. If a channel is not capable of supporting the DIWMs, it will fail.
One reason why customers need help in today’s smart home world is because of the multiplicity of wireless standards. The DIWMs buy bits of kit and then find they do not function together. We were given a masterclass by Bernd Grohmann, CTO of eQ-3, who showed us the spaghetti junction of different protocols. He left us with a vision of how the market would develop, eschewing the pessimists’ thoughts that Smart Home would go back to being niche after some overblown hype in recent years. He believes that the market will consolidate into two or three camps in each region before finally succumbing to what Bernd calls “the ubiquity of TCP/IP”.
In the coming weeks, we will give each of our speakers a platform in our blog to elaborate their ideas about how Smart Home will develop in the coming year with a focus on taking Smart Home to market through smart channels.
We would like to thank DISTREE for supporting the CONTEXT Smart Channels Summit, and providing the space for this important industry exchange.