The Retail Challenge

September 3, 2015 • Tomas Sørensen Boye

Clearing one consumer hurdle with the AXON Platform®

In the not-too-distant past, when you wanted to check out the latest gadgets, shop for clothing, or sample a new cuisine, you’d head to the nearest shopping mall to fiddle with, try on, or taste the items you were interested in purchasing before you would actually buy them.

Some retailers have been able to maintain their customer base and attract shoppers to their stores by keeping the physical shopping experience interesting; thus generating a high percentage of total sales from their brick-and-mortar locations.  But other retailers have not been so fortunate, and those without an online presence have struggled to stay in business.

This means that sales in some brick-and-mortar stores are dropping, while B2C eCommerce sales are increasing.  According to Statista, B2C eCommerce sales in 2016 are expected to reach 1.92 trillion U.S. dollars:

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To maintain growth, retailers with brick-and-mortar stores need to change the shopping dynamic.  One way to do this is to enhance the experience given to buyers so they have the ability to try the products they are buying and engage in a pleasing tactile and social transaction—something that is difficult to provide in an online shopping setting.

Another challenge that is not so easy to overcome exists for the retail channel, especially in the IT and consumer electronics categories.  Many of the products in these categories are sold with an option for the consumer to purchase an additional service (more features, for example, or even a subscription for the basic functionality).  Examples of this include routers that require the consumer to have an Internet subscription with a service provider; or mobile phones that are subsidized if purchased with a SIM card and service from a telecom operator).  Electronic goods like lighting, music systems, TVs and home automation devices are offered with additional services that can be added-on à la cart.  The problem for retailers is that they often don’t get a piece of that aftermarket pie.  So even if they manage to get a consumer to buy an item from their store, the customer will pay service fees to someone else.  The only time the customer might think about the retailer again is if there is a problem with the device, at which point they will complain to the store or ask the store to take the defective item back as a return.

Another consumer hurdle comes when a complementary item for a particular device is purchased, but is not compatible with existing systems.  For example, let’s say you originally purchased a connected lighting solution, and later decide to purchase a home safety and/or smart heating system.  You’d want these items to work together seamlessly, but that wish does not align with the current reality.

The smart device ecosystem (also known as IoT, “smart” anything, information appliances, etc.) utilizes numerous radio frequency protocols to get devices to wirelessly communicate with one another.  Although there has been a lot of talk about adopting one protocol standard, this doesn’t appear to be happening any time soon.  Thus, it’s not unreasonable that a consumer could purchase three smart solutions (e.g., lighting, home security, and heating), but they will not work together because each utilizes a different radio protocol.  This results in an unsatisfactory user experience, to say the least.  Say you want to leave your home, and all three smart systems should be notified of your departure.  You do that by opening your app and pressing an AWAY button.  In our example, you would need to open three different apps and press AWAY three different times.  It’s likely that most rational consumers will tire of this cumbersome process and revert back to using manual controls.  In the worst case, they will become so frustrated that they will return each of the three devices to the retailer.

To resolve the issue of multiple protocols, Greenwave has developed a platform, called AXON™, which allows one gateway and one app to control all of the solutions mentioned above, as well as many others.  This open platform allows any third-party smart solution to be integrated into the ecosystem, thereby giving the consumer the ideal user experience. In fact, the system is truly “smart” because it doesn’t necessarily require the consumer to press any buttons whenever they leave the home or want another smart function to occur.  You can create a scenario where the lights are automatically turned off whenever you leave the home, or if you desire, a scenario that causes certain lights to turn on while you are gone so it appears as if you are home. You can also set the heating or cooling system so that an optimal temperature is maintained in your home, and set your home safety system to be armed so that you can be notified if someone enters your home.  You can also set up your system to send you a live video feed from your home, so you can see who entered your home or you can have a service provider be notified to visit your home and check on the situation. All of this can be controlled through the gateway by one app managing all the disparate smart solutions.

With the Greenwave solution, retailers can offer their customers a core smart interface under the retailer’s umbrella. This provides the consumer with a better user experience because it opens up the options for acquiring additional devices and services in the same location, without having to worry about interoperation.  And it also provides the retailer with an opportunity to sell these additional services, thus becoming more than just a logistical pick-up location for a new device.