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Aug 23 2021
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Be Smart Be Smart Tech Savvy

Daniel Todaro, Managing Director of Gekko gives his take on consumer demand for smart tech.

The pandemic has changed the way we interact with our homes. Having spent an inordinate amount of time lounging around the house with our families, we have found new and interesting ways to not only entertain ourselves but also protect ourselves. At the heart of this has been smart technology that has enabled us to stream, cast, view, listen, observe and command and it’s unlikely we’re going to see an immediate cessation of the trend.

In the UK our thirst for smart technology continues and revenue in the Smart Home market (not including smart TV’s) is set to reach £5,277m in 2021 with an expected annual growth rate (CAGR 2021-2025)* of 15.06%, resulting in a projected market volume of £9,249m by 2025. So what does this mean for brands and retailers? It’s a positive trend that nods to an opportunity for all to continue focusing on as our homes become outdated and the need to update becomes essential and note merely fanciful.

The trend is set to see the Smart Home market increase across the number of active households increasing to 18.7m users by 2025. This household penetration will increase from the forecasted 37.4% in 2021 to hit 63.0% by 2025. That’s not the only positive signal. The amount we are prepared to spend is also uplifting with the average spend per installed Smart Home currently forecasted at £481.83 and even if this does not materialise, it indicates the scale of the opportunity from every customer that enquires or starts the journey of upgrading to Smart technology.

The global comparison reveals that most revenues in the sector are naturally generated in the United States, where the size of the market is over four times that of the UK at £22,408m in 2021. So even though we may not be in the same league as our US cousins, we are performing well for a nation of our size, one that is full of early adopters looking to spend on new technology before our EU neighbours. More importantly though, just look deeper at the demographic spread. In 2020 the share of 36.5% of users adopting smart technology was in the medium income group but even more interesting is that the share of 28.8% of users/purchasers were in the 25-34 year old age range.

So as we look to develop our living environments to control our home, become better connected to streaming platforms and increase our peace of mind with total security, the need to engage with consumers at a level which increases sales is critical. Consider every factor from the usage and the ecosystem that works best for your consumer and know your stuff.

A key element of the formula for success in store is a shoppers’ engagement with retail sales advisors. Are they proactive, helpful, skilful, knowledgeable, and capable of providing a personalised experience? This is something the online experience can’t replicate and physical retailers need to exploit to their advantage. Much is down to individuals, their training and management the retailer provides, but when it comes to talking about a brand and its products it is vital they are informed, motivated and most importantly advocates. The need to keep up to date is essential in order to capitalise on sales opportunities through trends in smart technology. Many brands have adapted ranges to meet the changing habits of consumers and our increased levels of time spent at home that have seen us cook, clean and entertain ourselves in the home more than we have ever done before. The space we occupy has evolved, we are now not only bothered about how it looks but increasingly also about how it works as a space to live in. This will no doubt ease once we come out of restrictions but changes are likely to stick.

Consumer demand will remain dynamic and therefore the current situation means that interest in products is still unpredictable. As household demand shifts, it alters long standing behaviours and creates new ones e.g. home-working leads to more interest in home luxuries and smart technologies as does the inert nature to protect our possessions and loved ones.

Innovation in the category will create more demand as brands bring to market more connected devices that integrate smart technology into the inanimate objects. A great example of this is where Ikea is working with Sonos on a hidden speaker built into wall art. Previous collaborations include a revamped version of the Symfonisk table lamp selling for around the same price (£150) as the original product. The Sonos Play 1 hardware is implemented into the body of the lamp to link into your existing system or used as a stand alone Sonos streaming solution. The second product that Ikea and Sonos are rumoured to be announcing in 2021 is completely new: a piece of wall art with an integrated speaker concealing the technical bit and integrating smart technology into lifestyle products.

Beyond speakers, home security and computing, integration across many categories from white goods such as laundry and cooling are now becoming commonplace and for product line ups from some brands, are now standard features. With initiatives to integrate these seamlessly irrespective of brand and assistant underway, it will undoubtedly expedite demand. One category that naturally did well in 2020 and will continue to do so in 2021 are those smart devices that help with a home’s health and cleanliness such as intelligent air filtration systems. These can automatically detect air quality and begin operation or be pushed to purify on-demand via app or voice control, not only do they provide cleaner air within the home but offer peace of mind and tap into the zeitgeist.

So when you factor in the need for better compatibility, it’s welcome news that the initiative is underway to make it easier to create a smart eco system from many brands such as Google, Apple, Amazon, Philips who have agreed to collaborate to make all of their smart home devices compatible with one another. This has been entitled the ‘Matter’ Project which will create more choices for consumers. The goal of Matter is to increase the compatibility of your hardware to make sure you’re able to use your smart home devices with the voice assistant you prefer, whether that be Apple’s Siri, Amazon Alexa, or Google Assistant. At launch, when it is unknown yet but when available, Matter will run on Wi-Fi and Bluetooth. Some might say that this is a long overdue initiative that in reality expands the category and consumer reach for all brands whilst offering convenience for consumers.

As a retailer or reseller, put yourself in your customer’s shoes and consider what you aspire to achieve, and redouble your efforts. Use this personal approach to enhance the customer journey, engaging in the most effective manner possible with your target consumers. This begins with propositions that grab the imagination and reveal the possibilities a smart home can achieve. Explain creatively a story that envelopes the consumer, enough to become a customer through informed choices of Smart Tech purchases that work seamlessly for them and their lifestyle.

*Statista

Article originally published in PCR Magazine

Photo by John Tekeridis from Pexels

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Dec 11 2020
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Four strategies for mobile brands looking to build market share in 2021

Revised forecasts from IDC predict smartphone sales will have declined by 12% overall in 2020. Against this backdrop, the traditional approach to growing market share for mobile brands is as dated as music festivals, theatre trips or weddings. Instead, brands have needed to adapt innovative new strategies to weather the turbulence, respond to changing consumer needs and come out stronger. A 2019 playbook simply won’t cut it in a continuing world of social distancing and faded touchpoints. Here are four strategies for mobile brands looking to expand market share in 2021.

Focus on establishing credibility

It goes without saying, but it has been a very tough year for challenger brands, with consumers gravitating towards brands they already know. Market leader Apple has expanded market share in the UK from 49% in October 2019 to 53% in October 2020. In this new environment, it has been very difficult for new entrants to promote themselves and establish themselves in consumers’ lives, especially with the reduction in opportunities to physically see and touch a new product. Consumers will want to invest their hard-earned cash and goodwill into credible brands that they know and are likely to stay. Key to this is a brand that has a great portfolio, strong supporting ecosystem, great customer service and the marketing vision and ability to build a credible trustworthy brand. For those wanting to make inroads, they will need a best in class distribution strategy and the ability to really differentiate and personify a brand.

Build in-store knowledge and advocacy

A vital component for any brand intent on gaining market share is how the brand builds knowledge and advocacy among those tasked with selling the devices. This includes retail sales advisors and contact centre sales teams. When premium devices are pushing £1,000+, the customer also wants to have a touch and play, especially when moving into a new brand. While we are spending more of our lives on digital channels and less in shops, the fact remains that when people are shopping they are doing so with ‘purpose’. In other words, they are intent on buying something. A proof point for this is that we have seen conversion rates of over 40% of product demonstrations leading to a sale. Therefore having the right skilled staff in-store to make the sale on more infrequent trips is critical. Consumers also trust brands they can see in stores, as that lets them know that, as a brand, you are committed to the marketplace.

Being quick to adapt to rapidly changing circumstances

In today’s world, it is hard enough to plan two weeks ahead let alone six months. Therefore quick thinking and flexibility are critical. Brands have needed to adapt quickly to sudden government decisions, such as the two national lockdowns and various local restrictions we have seen. Many of the brands I work with have transitioned their activities back into distance sales with as little as five days’ notice. An omnichannel strategy has been needed with non-physical channels critical in 2020. Despite non-essential retail being closed, effective brand engagement continues through innovative e-learning and e-commerce. Many consumers upgrading or shopping for new devices won’t have the option of heading to the high street so have gone down the online or contact centre route. Brands that have been able to switch to providing virtual training and support to these channels have seen positive results.

Premiumisation is a good long-term strategy

A recent report by Counterpoint indicates that the wholesale average selling price (ASP) of the global smartphone market increased by 10% in 2020 despite a decline in shipments and the decline in premium products was less steep than the overall average. The reason being, there has been less economic impact on premium smartphone users. Huawei is a good example of a brand that established itself in the premium category in a relatively short space of time. To succeed in this marketplace, there needs to be a real focus and clarity on what your brand stands for and where you want it to go. A halo effect can drive the overall success for a brand. Driving customer buy-in at the mid- and low-level remains important, but solely targeting the lower- and mid-tiers will cause problems in the future. This is because you will need to buy your way into the premium market. The unintended consequence is that a brand can find itself in a low tier hole that is extremely hard to get out of.

While the market remains challenging, the brands that succeed are the ones able to adapt and respond to the changing needs of consumers. This customer-centricity is what has underpinned the success of innovative mobile companies over the past decade and will be the foundation for success whatever the next year holds.

To read the full article please visit The Drum.

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Dec 13 2018
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Real people not robots is what consumers want from retailers

Robot Shop

The study found that 81% of UK shoppers claim the personal touch has disappeared from retail customer service in modern Britain, with almost a third (32 percent) blaming an over reliance on technology for this decline. And half of those polled think that companies in the UK are using technology to save money, rather than improve customer experience.

Despite living in a world driven by technology, most people don’t want technology at the sacrifice of humans’ opinions and experience.  Only 30 percent said they would like to see ‘smart pricing’ initiatives adopted by retailers, where prices change in real time depending on demand, 22 percent smart mirrors that show a 360 view of themselves, 16 percent a virtual reality changing room, 14 percent augmented reality to help visualise products in the home and 9 percent a talking robot assistant.

When it comes to buying online, 43 percent of UK shoppers have had their screen freeze while trying to make a purchase, so when asked what makes a great bricks and mortar shopping experience, 49 percent of those polled said it was down to having good staff on the shop floor, staff that know the products (49 percent) and staff that go the extra mile (47 percent). Coupled with this, 61 percent of the nation would prefer to deal face to face when complaining, 59 percent when enquiring or trying to find out more about a product and 73 percent when getting a refund.

And businesses take heed – a third of Brits say that the personal touch is more likely to make a repeat purchase, and more than a fifth (22 percent) claim they always spend more money in a shop if they are served by a good assistant, incrementally adding to sales. Over a third (34 percent) of shoppers stated that a poor experience has driven them to buy from another retailer.

The research also highlights the impact of the decline of the local shop, with a quarter of Brits saying they miss shopping somewhere where people recognise them, 16 per cent confessing they preferred the days when they could talk through a purchase with a someone in-store, and a quarter saying online shopping is less fun than buying something in a real shop.  The convenience of a store’s location is also stated as important by 43 per cent of respondents which means that as retailers consolidate their estates, many will notice the effects, further emphasising the need to carefully consider the experience being provided in-store and the staff needed to deliver the experience.

According to the research we waste almost an hour and a half a month – which is 17 hours a year, the equivalent of more than two days at work – interacting with automated technology, only for a human to have to step in and help.

Bug bears include getting someone to rectify a problem with the self-service checkout, and ringing customer services and dealing with a recorded voice, only to repeat the details to the person you end up talking to.

Little wonder, then, that 51 percent of Brits have slammed the phone down during an automated call, as the system didn’t recognise what they were saying.  And 47 percent of shoppers have experienced self-service checkout failure that’s had to be rectified by a shop assistant.

In fact, more than three quarters (77 percent) of UK shoppers admit they’d much rather use a checkout with a person on it, rather than taking the self-service option.  More than 4 in ten (43 percent) British shoppers would rather speak to a person than an automated system when making a phone enquiry, with almost a quarter (23 percent) ending up having to complain on social media when their query hasn’t been responded to via the automated service.

Daniel Todaro, MD of Gekko said: “Everyone is talking about technology and innovation within retail, but our research clearly shows that what consumers really want is the human touch.  With traditional retail under more pressure than ever and an astonishing 81% of people feeling that the personal touch has disappeared from shopping, businesses need to focus on the customer experience in these tough trading times to help keep the high street alive.”

To find out more about our ‘Service not Sci-fi’ research please visit our Research page.

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May 23 2018
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Retail evolution not extinction

A ‘seamless customer experience’ appears to be the current obsession for retailers – mobile, desktop, in-app – a preoccupation with working out what customers want, even before they do and they’re getting pretty good at it.  But Bricks and Mortar retailers have the added pressure of the in-store customer experience and this is where it’s all change.

I’ll continue to rant about the merits of brick and mortar retail (someone has to) but not because i’m old fashioned but because statistics say we should care. According to the ONS, while online sales continue to rise, e-commerce as a percentage of total retail sales in March 2018 was still only 17.4%.

I also read an interesting stat from Murphy Research in e-marketer that 69 percent of U.S. internet users make a retail brick and mortar purchase in an average month while only 22 percent make a retail purchase online in an average month (and 9 percent buy something online for in-store pickup).  Our own research conducted last year ‘shopper influencers’ also supports this hypothesis.

The importance of brick and mortar retail to a local economy and a town’s dynamic cannot be underestimated. Fewer shops equals fewer jobs, which increases instability and deprivation.  Fortunately, traditional retail isn’t dying it’s just changing and I personally don’t think retailers are keeping up with this pace of change and consumer demands for format, feel and functionality.

So, we had a look at smart home tech one of the fastest growing consumer categories – according to EY some 59% of UK households are expected to own a smart home device by 2022 – to see how or if retailers were capitalising on this surge in interest and the results were pretty insightful.

The study found that whilst 56 percent of adults have bought the latest must-have smart home tech including WIFI controlled security cameras, heating systems and speakers most have little idea how to use what they’ve bought.  To the extent that over 30% said they regretted buying at least one or more items of smart home technology because it proved so difficult to get up and running and many said they couldn’t get all their devices to connect – which is the whole point of having a ‘smart home’.

Coupled with this, nearly a third said they never read instructions or manuals when they buy a new piece of kit and 21 percent admitted that although they have a love of tech, they are intimidated by the complexities of it.

Of the most popular smart home tech items forty five percent said the trickiest bit of kit to install was security equipment including app-controlled doorbells, motion sensors and CCTV, followed by smart lighting (28%) and smart heating system (35%).

And despite its current popularity, 30 per cent of adults that have purchased a smart speaker such as the Amazon Echo or Google Home don’t understand or use all its functionality.

Smart home tech is popular, but people don’t know how to fully utilise it to meet their lifestyle needs – whether that’s convenience, money saving, leisure time or learning. Maybe the learning is lost for the majority of these customers because they chose to buy online but there’s clearly a customer need and experience that’s not being fulfilled by brick and mortar retailers.

We can talk endlessly about multi-channel integration, increased personalised experiences, fluid shopping between on and offline but ‘experience-centric’ shopping where consumers can ‘play’ and be served by a retail team that understand each product in detail and can match consumer need to product performance, is surely where brick and mortar retailers can always win?

We’ve seen huge strides in ‘experience’ shopping but there’s still a long way to go for brick and mortar retailers to make every customer visit worthwhile by fully utilising their USP – the fantastic team that meet and greet their customers every day.

Article by Daniel Todaro, Managing Director at Gekko

 

Read the full article here

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May 09 2018
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All the gear, no idea: 56% of consumers don’t know how to use their smart tech

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The results from a recent study published today by field marketing agency Gekko entitled ‘Smart Home Shopper’ reveals that more than half of Brits have purchased smart technology for their homes – but have little idea how to use it.  

The study which investigated smart home purchasing behaviour found that 56% of adults have bought the latest must-have smart home tech, including WIFI controlled security cameras, heating systems and speakers – but have been left scratching their heads when they get them home.  In fact, three in 10 consumers regretted buying at least one or more items of smart home technology because it proved so difficult to get up and running.

Nearly a third of adults say they never read instructions or manuals when they buy a new piece of kit, while 21% admit that although they have a love of tech, they are intimidated by the complexities of it. Thirteen per cent of consumers who have invested in smart home technology said they couldn’t get all their devices to connect – which is the whole point of having a ‘smart home’. More than one in 10 have used a piece of smart home tech once and never again.

The trickiest bit of kit to install was security equipment (45%), including app-controlled doorbells, motion sensors and CCTV, however 28% couldn’t get their smart lighting to work and 35% came unstuck when installing their smart heating system. Twelve per cent claimed poor WIFI connection made installation difficult and 15% confessed to lacking any technical ability.

Surprisingly and despite its current popularity, 30% of adults that have purchased a smart speaker such as the Amazon Echo or Google Home don’t understand all its functionality.

Those people that bought their smart home tech from a brick and mortar retail store did so to play, touch and feel the product (40%), get advice from sales staff (30%) and a demonstration (30%).

Daniel Todaro, MD, Gekko comments: “It’s clear from our study that smart home tech is popular, but people don’t know how to fully utilise the devices to meet their lifestyle needs – whether that’s convenience, money saving, leisure time or learning.    

This is a great opportunity for retailers, especially brick and mortar to improve the customer experience within the smart home tech category by having an environment where consumers can ‘play’ and a retail team that understand each product in detail and can match consumer need to product performance. By solution selling it’s a win win for the customer and the retailer – the retailer can enrich the sale by demonstrating the whole product portfolio and functionality and the customer gets a product that’s fit for purpose. 

Traditional retailers have never been under so much financial pressure to adapt to today’s market conditions, so they must use what they’ve got to make every customer visit worthwhile.” 

Read the article at retailtimes.co.uk

 

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Jun 27 2016
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Smart Move

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The connected home is now reality, not a fantasy. The global market for smart-home appliances is expected to be worth $38.35 billion by 2020, and will only grow as demand and consumer interest in smart appliances increases. Shoppers will be looking for smarter appliances, but these can be balanced with regular models depending on a consumer’s desire to have some or all of their devices connected.

Some categories are clearly just jumping on the bandwagon, such as a connected SDA, which is in most cases an expensive and underused version of a regular appliance.Yet when considering the connected home from a long-term financial and time-efficiency perspective, some are valid purchases, once you’ve weighed up the cost against its potential long-term worth. Many of these domestic appliance products are, however, costly and there’s a good chance that if you could afford a kitchen and utility room full of connected devices, you’re perhaps not going to be the one cleaning or cooking and directly using the connected devices.

For retailers, the margins on smart appliances are evident, however this must be weighed up against unit sales, which may mean a lower margin than your bread-and-butter range could achieve if it were occupying the same space in your store. While the investment in ranging smart appliances may not be attractive at the moment, remember that sales in John Lewis stores in the smart-home category increased by 81 per cent year on year from 2014 to 2015. This is a growing trend that will likely spread to independent retailers, as smart appliances become increasingly more mainstream.

Having a select range of smart appliances gives your store an aspirational product and proposition for shoppers to consider when looking for a new washing machine or fridge. It’s worth considering that many shoppers looking to purchase a new appliance are doing so as a ‘distress purchase’. These consumers will be looking for a reliable device, not necessarily one with smart features.

However, a demonstration from a knowledgeable staff member connected via a tablet or smartphone, to explain the benefits of the smart system, may persuade many shoppers to purchase for the long-term benefits. These include compatibility with future smart appliances they may add to their home.

My advice is to pepper your range with connected devices, but don’t forget the mass-market appeal of traditional appliances and offer choice at all price points and functionality.

Read more at http://ertonline.co.uk/opinion/smart-move/

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Sep 02 2014
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Education is key for the connected home

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The connected home, moving beyond the early adopter stage, is now trickling into the mainstream. Research we recently undertook highlighted that 17% of Brits would like and have no concerns about installing smart devices into their home. While on the other side of the pond a study by Accenture illustrates that 69% of consumers are planning to buy a connected home device in the next five years.

The entrance of the world’s biggest tech companies into the smart home market is likely to reassure consumers and accelerate adoption. Google’s £1.9 billion acquisition of Nest at the beginning of the year demonstrated its desire to be at the forefront of smart technology while Apple recently unveiled its HomeKit – a suite of tools for controlling home appliances.

However despite the growing appetite amongst consumers for ownership of smart devices, a great number remain unconvinced or cautious, with our research also revealing that an education job is needed on their use and set-up. Backing this up, just over a third of respondents also cited third party endorsements – whether through word of mouth or in-store advice – as the most important factor when researching a purchase. The stat highlighting the emphasis brands need to place on their in-store education experience. Furthermore, education is crucial for putting consumers’ minds at rest. Certainly an important thing to consider when 23 per cent of those interviewed were concerned with the complexity of setting up smart devices and a further 39 per cent were concerned that smart devices would be too intrusive or were worried that their data would be collected and used inappropriately.

What stood out for us from the research, is that human interaction and face-to-face communication is still hugely important in the purchasing journey. Brands therefore need to capitalise on this by developing their in-store strategies with specially trained in-store brand ambassadors. Yet they must also ensure their digital and in-store offerings are unified providing a seamless customer experience.

An example of major brands doing this effectively are Currys and PC World. They are rolling out ‘smart technology areas’ across their stores to help educate consumers and enable them to interact with connected appliances. Moreover they are investing in training their employees on smart technology and launching online microsites for customers which are dedicated to smart technologies.

Another industry where connected home devices are making a huge impact is the energy sector. With the soaring costs of utility bills securing significant recent media coverage, it is perhaps no surprise that smart thermostats to control a home’s heating are the most popular devices followed closely by lighting control systems. In a tight economy, where there is consumer desire to cut back on energy bills and with winter fast approaching, utility brands must start devoting more resources to marketing smart meters.

However as with all new technology it takes time for consumers to get on board and brands must support this journey by educating people on the products available and how they enhance your life by fitting in seamlessly or by accident. In my opinion, the ultimate winners of the connected home will come down to those who can provide a balance of security and privacy, whilst being reasonably priced with useful and intuitive functionality.

 

Read more at: http://wallblog.co.uk/2014/09/02/education-is-key-for-the-connected-home/

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