Target gets smart
July 10, 2015 03:18 PM
Target Corp. today threw open the doors of its new Open House, a 3,500-square-foot store in a San Francisco shopping mall. Focusing on “smart” devices that are constantly connected to the web, it is not a typical Target store.
The mass merchant describes Open House as “part retail space, part lab [and] part meeting venue for the connected home tech community.” Its purpose, the retailer says, is to familiarize consumers with so-called connected home devices and their potential, such as thermostats or lights that can be controlled remotely from a mobile app, or coffee makers that automatically reorder supplies when they run low. The store is constructed of clear acrylic, and rooms show how “multiple connected devices can work together to create real-life solutions,” Target writes in its corporate blog.
“From a strategic perspective, we see Internet of Things as a megatrend on the horizon. We know it’s going to generate huge value,” says Casey Carl, Target’s chief strategy and innovation officer. “We’re using Open House to test the trend, both for us and for guests.” The trend of connecting all kinds of devices and objects to the web is called the Internet of Things.
Target this spring also began opening “Connected Life” sections in 1,800 Target stores.
The number of web-connected devices is growing fast. Research and advisory firm Gartner Inc. says there will be 4.9 billion connected things in use this year, and it predicts that number will explode to 25 billion by 2020. Further, 54% of U.S. consumers are expected to buy at least one smart home product in the next year, according to the 2015 State of the Smart Home Report from IControl Networks, a software company, based on a survey of 1,000 U.S. adults.
Target, No. 16 in the Internet Retailer 2015 Top 500 Guide, isn’t the only retailer that’s interested in educating consumers about connected devices. Last fall Best Buy Co., No. 14, opened dedicated “Connected Home” departments featuring more than 100 connected products in more than 400 U.S. stores. It also added a Connected Home department to BestBuy.com, which it is actively promoting within the Home and Office category.
Meanwhile, Amazon.com Inc., No. 1 in the Top 500, has introduced its Dash Replenishment Service that will enable connected devices to automatically reorder needed items, such as a washing machine placing an order when laundry supplies are low. Amazon says several major brands of household appliances will introduce products this fall that works with the Dash Replenishment Service. The big e-retailer earlier this year unveiled its Dash button that lets a consumer program the web-connected fob to reorder a single item.
For more on how retailers and manufacturers are riding—and accelerating—the adoption of web-connected devices, read the story “A Sensored Landscape,” in the June 2015 issue of Internet Retailer magazine.