Connected home products offer fleet-footed retailers a fast track into custom installation. But it might be better to walk before you try to run, warns Steve May
With the connected home gaining commercial traction, an early move into custom installation might look like a smart move to many. Dedicated lines like Panasonic’s Smart Home accessories and Samsung’s SmartThings, as well as wider initiatives such as Bang & Olufsen’s BeoLink Smart Home open architecture cloud platform, are opening up new opportunities.
So how can retailers best exploit this potentially lucrative, but increasingly complex, new sector?
According to Stuart Tickle, managing director of distributor AWE, knowledge is power. Retailers need to understand the benefits of the products that they are offering, he says. “It’s important to know how certain products will connect with each other, as this can be a major benefit within people’s homes.”
The key for retailers is recognising the added value of installing the items you are selling, he adds, and carrying this out to a really high standard. “Moving towards a full installation service with more advanced control makes perfect sense for retailers looking to branch out into custom installation. It will allow the retailer to expand their business, while making them stand out from the crowd.”
Steve Simper, managing director of CI distributor Alltrade, argues that moving from pure retail to entry-level custom install and home automation is not the big step many retailers assume. “CI products, such as HDbaseT HDMI distribution, and modular home-automation systems like HDL and tablet-based interfaces like Demopad, have dramatically reduced the complexity and cost of getting TV and music in every room, and integrating control with heating, lighting and blinds,” he says.
The biggest challenges stem from retailers and their customers simply not knowing what is possible for only a reasonable investment, he says. “The solution is to partner with a good CI distributor that has the product portfolio and support geared up for these entry to mid-level installations.” Pointedly, Alltrade now offers a complete project-planning service for its retail and install partners, as well as a comprehensive training programme, much of it free to attend.
Energenie, the British brand designing modular, affordable, smart-home products from a UK perspective, suggests it’s important to recognise the difference between British homes, where consumers tend to ‘smarten up’ one room at a time, and American whole-house ecosystems.
“Our modular, retro-fit range offers excellent opportunities for installers, especially as a quick and easy alternative to more complex smart-home solutions,” explains Energenie’s commercial director Oliver Tadd. “Our products are simple and straightforward. There’s no need for installers to go on costly training courses to understand them. They can be pre-programmed before installs, and fitted fast – yet still deliver high perceived value.”
He says modular products suit customers who may not want to take a whole-house approach – “this gives new custom installers opportunities for repeat business and top-up sales”.
Ashley Shorey-Mills, manager of Hughes Smart Home, continues to be impressed by the speed at which the market is growing. “This is a rare opportunity for CE retailers to add valuable gross profit and turnover to their business,” he enthuses. “Just simply selling a TV and a soundbar doesn’t cut it anymore, what with low-margin products and package deals a-plenty from the big retailers, who then throw in a free warranty. No matter how many HDMI leads you may sell, this will not pick up the baton.”
An everyday opportunity comes in the form of a simple smart-home service, says Mr Shorey-Mills. “Take a standard customer who comes into your store, looking to buy or rent a large-screen TV, audio system, or something of value to them. Rather than spending an hour going through the ranges, we decided that we needed to be able to add an extra level of service to keep that customer with us.”
Sales staff at Hughes are actively encouraged to maximise any sale in-store but, should the customer still not be 100 per cent sure, they can offer advice that is “a little more tailored – we can send someone to their house”. The aim of this is to ensure that not only does the customer get exactly the right products first time, but also a level of service they simply cannot find elsewhere. It’s not about selling extra products that the customer doesn’t need, notes Mr Shorey-Mills. “It’s more that we can sell them products that we know will help them improve their purchases, both from us, and what is already in the house. It could be major products like a soundbar, a second TV, or more Sonos, or it could also be accessories to make life run more smoothly in their home, like wi-fi extenders and access points, a NAS drive, or an Apple TV or two.”
This approach can add on average around 50 per cent more turnover compared with what a shop sale would achieve, and probably 60 per cent more margin, says Mr Shorey-Mills. “It’s not uncommon for us to do a call to a customer’s home for a full built-in kitchen, or a great new range cooker and hood, at the same time as fitting a new TV and Sonos. Keep your mind open to the endless possibilities: ceiling speakers, outdoor entertaining, projectors and screens, these are all valuable extra sales we have been experiencing since dedicating a team to this market.”
Mr Shorey-Mills is also excited by the possibilities of IoT: “It’s such an exciting part of our sector, it will be the biggest thing to hit our industry over the next five to 10 years. If you are planning still to be trading successfully in 10 years’ time, then I really do urge you to at least try to understand where the market is heading and how you can maybe adapt your business to take advantage.”
Katy Bradshaw, trade marketing manager at Meridian Audio, tells ERT: “Dealers need to understand what’s important to curious customers and provide relevant solutions to them. At Meridian, we are actively supporting many of our dealers as they expand and grow their custom installation channel.”
Ms Bradshaw suggests trade body Cedia is a good starting point for newbies. “They have a whole range of courses that will inform teams and quickly bring them up to speed with the language and expectations of the CI market. Their sessions help retailers build their knowledge and expertise.”
Mark Taylor, commercial manager at Invision UK, suggests the biggest opportunity for retailers lies in being able to really differentiate their business from the local competition. “As the CI industry has evolved, core products have become much more intuitive both to install and to use. This has really opened up the door for retailers eager to take a step into this growing market,” he says.
There is, of course, a major caveat. “One of the most common mistakes we see by new installers is taking on projects beyond the scale and experience of their business,” confides Mr Taylor. “Our advice is to take on projects you are comfortable with, where you know you have the support of your supplier partners, then build your project size along with your experience. At Invision UK, our training academy offers practical courses designed to equip installers, from novice to experienced pros, with the necessary skills for a wide range of installs.”
Meridian Audio also offers its own Cedia-certified training resources. A Two Channel Masterclass explains analogue and digital minutiae, from connection types to how a two-channel system is put together. “Audio sources, control units, power amplifiers and loudspeakers and the impact of each component on the system are all covered,” says Ms Bradshaw. A companion Multichannel Masterclass covers multichannel design, specification and set-up.
“Multi-room distributed audio is very regular business,” notes Meridian’s Ms Bradshaw. “Every CI dealer will be working on these all of the time and it should be treated as a regular income stream once the concept has initially been sold in.”
Meridian reports success with its own Sooloos displacing Sonos. “With the move to a QNAP NAS core, Meridian Sooloos is now incredibly compelling. It allows for a higher-performing, more profitable solution with multiple control options. More performance can also be specified via Meridian’s saleable product solutions, but the infrastructure can remain the same.”
Of course, home cinema has long been a staple of the custom install market, but it’s all too easy to underestimate the complexity of creating a technically compelling home theatre. The relationship between screen, speakers, seats and environment is notoriously difficult to master, and the arrival of 3D audio formats only complicates things. But one innovative new solution aims to counter that. Called The Cinema Designer, this ingenious software tool allows any installer to input the basics of their project and get an accurate specification and architectural plan in minutes.
It’s the brainchild of Guy Singleton, leading UK cinema designer and Cedia/ISF [Imaging Science Foundation] instructor. “Initially, I wanted a tool to assist me in my own cinema and media room designs, to make them more efficient,” he tells ERT. “Even for an experienced cinema designer, a proper design can take many days and can be a complicated technical process. Computing the design calculations, creating CAD drawings, correct product selection, writing a design report and, finally, producing the visual renders are processes that require a lot of manual design time. I felt that I needed a tool to make these processes quicker, more slick.”
Cinema designers simply enter a few basic details about the room, the type of installation and certain preferred criteria, such as whether it should accommodate object-based (Dolby Atmos) or channel-based audio formats. “Once these have been entered, the design process is complete in under a minute.”
The tool includes product data for major manufacturers, enabling the designer to select their preferred brand. The installer can also choose to illustrate the room in a variety of different ways, from lighting ideas to the colour of the seating. Integrators can use The Cinema Designer for a one-off design, or they can take out a regular design subscription if the number of projects mounts up.
“Ultimately, as CI and home automation becomes ever more affordable, the biggest challenge for retailers is to promote the concept, and show customers what is possible,” says Alltrade’s Mr Simper. “There is huge potential to really wow your customers.”