Tag Archives: connectivity

Window Shopping and Shopping on Windows

A running theme over the last few years in business news in the US and elsewhere is the terminal decline of the physical retail store. Many of the big name chains once thought of as bastions of the high street have fallen victim to the online juggernauts, on what seems like a weekly basis. The finger of blame is most often pointed at Amazon, whose profits continue to soar to such extents that some financial analysts are now claiming that their share price is overvalued and based upon forecasted earnings of massive proportions.

It is possible that President Trump may attempt to curtail Amazon’s growth through trust-busting legislation – something which could be motivated by his feud with The Washington Post and its owner/Amazon exec Jeff Bezos – however there is little legal ground to challenge the etailer simply because their business model and disruptive technology offers a better deal for consumers as things currently stand. It’s true that few retailers can take on Amazon based on pure pricing, however there are still assets which Amazon does not yet have: a large high-street presence and refined customer service.

I was speaking to a colleague recently whose wife works as a beauty consultant in London’s West End. She was upset that although their footfall was good and plenty of customers wanted to try out products, very few actually bought anything, and many could be seen price-checking and purchasing on Amazon before they even left the store. Let’s be honest: many of us do this every time we shop. Her general feeling was that they shouldn’t even bother stocking anything in-store. This remark was borne of bitter resignation, but some retailers have done exactly that, using a sophisticated omnichannel model to remove the need for significant store inventory.

There are certain categories where consumers will always want to try products in person, and which if prove unsatisfactory can result in a glut of expensive return logistics. Clothing and fashion is an obvious candidate; US brand Bonobos recently posted a $60m increase in revenue over the past five years, driven by their Guideshop setup. Consumers visit physical stores to see the new lines, try on clothing, then pay to have clothes delivered when and where they wish. The store itself does not hold large stock or inventory. Bonobos’ system challenges the assumption that most consumers want to leave with the product in hand, and has allowed them to reinvest logistical savings in staff training and a high service-level.

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This phenomenon is also seeing green shoots for technology sales, with showroom setups such as London’s Sandbox offering hands-on experience with new categories including VR. Like Bonobos, Sandbox’s function is to give consumers the chance to try room-scale VR, something Context’s 2016 VR consumer survey showed to be a key factor in purchasing VR. At this stage in the category’s lifecycle relatively few consumers have tried room-scale VR, and would therefore be unwilling to part with the daunting initial upfront cost.

These kinds of demonstrations are arguably more important for VR marketing than traditional advertising. VR can be a revelatory experience, but selling it to someone who has never tried it is an uphill struggle. It is also fair to say that many consumers shop online to avoid feeling pressured by a salesperson, and at present very few retailers can offer truly excellent face-to-face customer service. By removing the onus of making the purchase then and there, and potentially allowing for price reductions to compete with Amazon, Bonobos’ solution, or a modified omnichannel setup could be the saviour of the high street, not to mention a huge boom time for the distribution channel and drop shipments.

The art of window-dressing has a long and proud history, once a place of hubris for serious-minded shop attendants and source of satire for comedians, but now the whole store offers a window into (Microsoft) Windows.

by JW

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Filed under Connectivity, Retail, Retail in CONTEXT

Peddle Faster to Fly Your Unicorn: Could VSports Cause Unintentional Fitness?

In three decades of video gaming there have been some very odd on-screen instructions. The Grand Theft Auto series introduced a controversial healing mechanic, and in PS3’s 2010 title Heavy Rain players were encouraged to “press x to Jason [sic]”, however being instructed to pedal in order to start your unicorn must now be a close contender. It’s also fair to say that very few eSports or sit-down video games will draw much more than nervous perspiration, or perhaps the dreaded Nintendo Thumb some of us used to suffer when attempting to finish seemingly impossible titles like Battletoads (which if played with two players was actually impossible). The Nintendo Wii was the first mass-market gaming platform to show the potential for video games to help users truly exercise, and the motion controllers and uses beyond sedentary gaming were a major selling-point over seemingly superior competing products. The majority of users eventually grew to see the Wii Fit as a novelty workout video with interaction, and slowly consoles were retired in garages, ignored and eventually abandoned like so many gym memberships. Few of those Wii Fit owners have looked back since.blog1

As the VR industry has grown over the last two years a new form of exercise has emerged – Vsports. In this instance, the user is immersed in a 360 degree 3D world, transforming a session on an exercise machine into a totally different experience. Often complaints of reluctant joggers is that running through the streets of Balham is hardly exciting, and thudding on a treadmill whilst watching Simon Cowell’s latest autotuned starlet in the gym is drastically worse. What about running along the banks of the River Tiber whilst chasing rogue legionnaires, or indeed, flying a pedal-powered unicorn? The latter has been made possible by VirZOOM, a company so sure of its product that they are targeting their marketing directly at lapsed gym bunnies. My own aversion to jogging is the lack of competition and the abstract nature of lonely cardio exercise, however a gameplay element and opponents, both virtual and real, will push me the extra mile. Interestingly, in a 2016 CONTEXT survey of EU consumers, sport was the gaming category which excited them the most for VR, with 1 in 5 respondents expressing an interest; this could now mean sport in a very physically-active sense.

For those of us in the ICT industry who have been lucky enough to try VSports at events such as CES, general consensus is that this could be a big category for VR, both at home and in larger installations. As an analyst, I am frequently asked where the opportunities for VR lie for the channel, and VSports offer both a B2B and consumer market. Health technology is persistently strong in terms of sales, and the industry is accustomed to disruptive technology and wearables. Moreover, gyms have long been a customer of AV installers and resellers: almost all gyms contain dozens of TVs and LFDs. The sanitary aspect of VR headsets has not been missed by start-ups, with companies such as VR Cover popping up to sell washable VR peripherals.

Perhaps the most interesting example of the convergence of games, VR, and VSports is the phenomenon of accidental exercise. My own serendipitous encounter with VSport was whilst playing Knockout League on the Oculus Rift/Touch recently. After over an hour of shadow boxing I removed my headset to discover the sort of sweat I’d expect after a 5km run. I’m not the only industry professional to accidentally work out during a normal gaming session: Job Stauffer, Telltale’s head of creative communications recently announced that he’d lost over 50lb playing a VR game, in this case Sandboxing. For those of you in the channel who have routes to the healthcare verticals and are also lucky enough to be distributors or resellers of one of the high-end VR HMDs, my advice is to start some serious conversations about the new categories of VR Fitness Devices and Accessories.

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by JW

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Filed under Connectivity, gaming, Mobile technology, virtual reality

Going out of Body Combat™

by Mathias Knöfel, Enterprise Analyst

My local gym is closing!

This blog was supposed to be about HP’s purchase of Aruba, the possible effect on their position in the market, and how well (or not) they will be able to integrate the acquisition. I guess that time will tell if they manage to do this successfully.

At present, I am preoccupied with the closure of the VA gym in Putney.

I guess there might be people that see a gym as a place they dread going to, and hearing about the closure of their gym might even be celebrated by them, giving them another reason NOT to go. For me, it’s a sad situation. This gym has been a social hotspot for me over the past 14 years, where I have made many friends, on top of exercising and keeping fit.

And I am not the only one who feels like this. Many people who used to come regularly to gym classes also enjoyed the social aspect, as well as the group enthusiasm for exercise… and the occasional night out! As we were left high and dry, been given only two weeks’ notice before closure, and one week to transfer to another gym (much further away), there is a group of us that want to maintain the spirit and social aspect, even if we have to transfer. As one of my friends has put it: “unless you’ve been to Putney gym, you just don’t get it”!

We started to mobilise ourselves, creating a web-page for information, and an online spreadsheet to record people’s names to show to the management of the next club that we are serious about this. Also, many of us have taken to social media, sharing thoughts, memories, pictures, and grief!

This activity has made me realise that all of this is readily available today, and we have come to expect it. The mobility aspect of this shows the importance of accessing information and social media wherever we are, through devices from smartphones to notebooks.

Telcos want us to use their networks, but these are not always available (besides, 4G is still somewhat expensive). We have seen an uptake in powerline adaptors for consumers and SMBs, as they want to make the most of the mobile devices they own, whether at home or in the office. When you are out shopping, or go for a meal, many places provide free Wi-Fi. In the corporate space, more and more offices are fitted with wireless access points.

With this demand growing as we become more mobile still, the purchase of Aruba by HP would appear to be a step into the right direction.

Unfortunately I cannot say that about the decision of VA headquarters – at least not from a members’ point of view.

*Body Combat™ is one of many classes offered by Les Mills at Virgin Active

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Filed under Networking

Opportunity knocks for the Channel in IP Camera market

by Alex Mesguich, VP of Enterprise Research

The IP camera market has reached a tipping point in Europe, accounting for around half of all revenue from surveillance and security camera sales. This is mainly due to businesses looking to migrate from legacy CCTV technology.

In addition to legacy systems being discarded, a number of key events have shaped the IP cameras and connected home markets over the last year including Nest’s acquisition of DropCam. With a impressive year-on-year unit sales growth over the last couple of years, we anticipate more mergers in the IP camera space where smaller, specialist players are snapped up by larger IT electronics giants wanting a piece of the cake in this area.

Amongst the European countries, France has been the largest market in Europe, accounting for an 18% share with the UK third (12%).

D-Link is by far the largest vendor of IP cameras in Europe, having steadily grown its market share from 2012 (58%), to 2013 (66%) and 2014 (68%).

For the IT channel, this is good news indeed with many of the IT solution and managed service providers jumping on the IP video surveillance trend. The popularity of IP based video surveillance cameras that offer high quality video and in-built recorders is set to stay. Particular hotspots for IP surveillance sales will be end user application areas such as transportation as well as retail, education hospitality and healthcare.

CONTEXT has launched a new category to the CONTEXT SalesWatch Distribution reporting specifically for IP Cameras. For more information please visit the website.

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Filed under Connectivity, IP cameras

Full service in ICT Retail

One idea which captured the imagination earlier this year was the Darty panic button – you hit the button and you are put in touch with a call centre which can help. There are many ICT retailers who are going to press a panic button if they don’t get their service model right, because they risk losing out.

A whole new generation of products is emerging with wearables, smart technology and connected devices for the home. Cisco estimate that in 2018 there will be more than 7 billion machine-to-machine devices in the world, almost twice the number of smartphones. That is a lot of devices to sell. Some retailers are also targeting small and micro-businesses with a Retail-to-Business or R2B Channel. The winners know that they have to put in place a full service offering whilst maintaining a keen cost structure:

  • listening to customer needs with skilled in-store staff
  • holding a broad enough range of products to meet those needs
  • providing an omnichannel solution which allows customers to go from web to store and back again
  • and the all-important after-sales service of installation, warranty and general hand-holding

Here is why. Traditional retailers are already losing market share to etailers, but new threats are emerging: utility companies such as British Gas are linking the installation of new boilers to the creation of a smart home, with, for example the installation of smart thermostats and other kit. DIY retailers are trusted for service and installation, so how long will it be before they create a smart package with the installation of a new kitchen. Specialist retailers are emerging which are dedicated to the sale of wearables and connected devices. One of our keynote speakers at the Smart Channels Summit in DISTREE Monaco in February 2015 is Stephane Bohbot who has set up the Lick stores in France – in an interview with him in the FT he said that his salespeople are “coaches”. In the world of connected devices, a practice which was once taboo is now becoming commonplace –manufacturers are establishing direct links to end customers – unless retailers find a way to maintain their customer intimacy as retailers like Staples and Lowe’s are doing with the creation of a hub, retailers will lose out.

This journey involves investment in people, training, product availability, partnerships with other providers. Currently I am trying to order a Nest Thermostat so that I can walk the talk of a smart home myself. Two leading bricks and mortar retailers offer a solution through their call centres and websites but none has been able to assure me at the moment of passing an order that I would have both the product and an installation date. One of them told me I would have to go in store to get it ordered. No-one I spoke to really knew what a Nest Thermostat was. The question is – who is prepared to give full service to their customers, and win the prize of a new generation of products and customers.

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Filed under Retail in CONTEXT

Smart Channels – asking the right questions

smart channels meeting CONTEXT

The Advisory Board for the Smart Channels Summit met on Friday 7th November in Paris. We were getting ready for the event which will take place at DISTREE in Monaco on 26th February 2015. The photo shows us having a pause before lunch in the fabulous surroundings of the Maison Amerique Latine in Paris. The Summit will address best practices in the sale of wearables and connected devices in a context of explosion of consumer demand for these products.
The key reason for bringing together in an Advisory Board eminent people from the ICT world is to make sure that we are asking the right questions.

So here are some questions we will be addressing:

• Which retailers are going to win out – those who are strong on technology or those that are strong in installation, service and support? ICT Retailers cannot ignore the threat of DIY retailers as well as energy and telecom companies as a route to market

• In a world of connected devices with manufacturers connecting directly to the end user, how does retail continue to own the customer relationship? Should they be investing in creating their own hub system for connected products like Lowes and Staples?

• What can retailers working together with vendors and distributors do to generate demand for connected devices? Who drives the merchandising? Is it up to the retailer or the vendor or both?

• How much education is necessary for the consumer? Do retailers plan to invest in more training of store employees in order to equip them to sell connected devices?

• With a multiplicity of technical solutions available on the market how do retailers bring it all together to make a coherent whole for the consumer? How do retailers ensure that the solutions they propose are a long-term proposition allowing for future upgrades and additions to the home?

• By the time of the conference in Feb 2015, we will have the experience of Christmas 2014, and the launch of the Apple iWatch – will smart watches finally emerge as a killer category? Is it all about the apps like the iPhone introduction?

• Do connected products and wearables offer the possibilities to retailers of new private label products?

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Filed under Retail in CONTEXT, Uncategorized