Hardware Retailing

SEP 2016

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

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HARDWARE RETAILING | September 2016 82 Just a few years ago, smart home devices may have been the stuff of futuristic movies. Today, however, manufacturers are making smart devices for nearly every area of the home. Sales of smart home devices will continue to grow to reach 9.5 million units sold in 2016, a 29-percent increase over the previous year, according to data released by the Consumer Technology Association (CTA). The good news for independent home improvement retailers is that the market still has a lot of room to grow. A recent study by Coldwell Banker Real Estate surveyed U.S. adults and found that nearly half of them either own smart home technology or plan to invest in it in 2016. Those interested in purchasing the technology were not doing it just because they wanted to be on the cutting edge, either. In fact, more than one in three of the survey respondents said they didn't consider themselves to be early adopters of technology. This is another indication smart home technology is gaining broader acceptance among consumers. In addition, consumers who want these devices are very likely to purchase them from a national or local retailer, compared to other retailers, like online retailers, according to a study by Parks Associates, a market research and consulting company specializing in consumer technology. Once they've purchased one smart home device, they are highly likely to purchase another one soon thereafter. Big-box and discount retailers have already caught on. Walk into any Home Depot, Lowe's or Menards, and you're sure to see several feet of shelf space dedicated to the category. This past year, Target introduced its Open House, a 3,500-square- foot concept home designed as a showcase for how devices in a home can connect to each other. Consumers who purchase a device at one of these retailers are likely to return for subsequent purchases. Stores that are early adopters are the ones that will earn the repeat business of customers for smart home products, as well as other home improvement items. Ian Williams, department head of hardware and customer relations for Fresno Ag Hardware in Fresno, California, has been selling smart home devices for about three years. He says now is the time for independent retailers to adopt this technology. "This is just the beginning of the smart home age," he says. "As it catches on with more people, it will grow. Once it gets past the early adopter stage and to the majority stage, you want to already be established as the retailer with these products as the category takes off." Current Consumer Attitudes A Closer Look 45% of all Americans either own or plan to invest in smart home technology in 2016. 70% of those with smart home technology said buying their first smart home product made them more likely to buy another one. 30% of consumers look to a national or local retailer to purchase smart home products, rather than an online retailer or other source. Those who own smart home technology are... 43% Millennials 33% Between 35-54 24% 55 or older Recent surveys show consumers are warming up to smart home technology, and there's a big opportunity for home improvement retailers. Sources: 2016 Smart Home Marketplace Survey, Sources: 2016 Smart Home Marketplace Survey, Coldwell Banker Real Estate; Smart Home Coldwell Banker Real Estate; Smart Home Ecosystem: IoT and Consumers, 2014 Study by Parks Associates and the Consumer Electronics Association

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