[Insight] Best Buy in introducing new services for the IoT market
Best Buy Inc. is launching a new “smart home” service this week in the Twin Cities aimed at helping adult children remotely check in on the health and safety of their aging parents.
The service, called Assured Living, offers a free in-home assessment with families to design the most appropriate array of monitors and devices. Geek Squad tech workers install the custom-built systems, and family caregivers can receive information or alerts on their smartphones.
The market for using technology to assist an aging population promises to be both lucrative and competitive. There are 17.7 million adult caregivers in the United States looking after someone 65 and older, according to federal reports, and the numbers will accelerate rapidly in the next decade as baby boomers hit their 80s.
“This is Best Buy looking at a long-term user base strategy rather than a one-off, shopper-based strategy,” said Carol Spieckerman, an expert on retail and brand positioning. “Something like this is truly solving a need vs. attempting to come up with shiny objects that will appeal to an emerging generation.”
The move comes as word spread Monday that archrival Amazon has begun offering its own in-home repair and installation service, potentially becoming a formidable challenger to Richfield-based Best Buy’s iconic Geek Squad.
Best Buy’s stock took a 6 percent hit in response to Amazon’s latest offering, which has quietly rolled out in seven markets. Shares closed Monday at $54.23.
Smart home gadgets are a fast-growing consumer segment. Some 80 million devices were sold globally last year, a 64 percent rise from the year before, according to IHS Markit.
But integrating different models and capabilities requires time and expertise. Even with Amazon entering the in-home services market, Best Buy officials believe Geek Squad has a running start with its 20,000 workers, who have a “brand-agnostic approach” to working with customers in their homes.
The Amazon news “reflects what we know: Consumers love technology but frequently need help getting the most out of it,” Best Buy spokesman Jeff Shelman said in an e-mail. “We are excited about the range of initiatives we have previously announced that do just that and feel uniquely positioned to serve consumers by offering products, services and support wherever the customer wants it, including in one of our 1,000 stores, on BestBuy.com and in homes millions of times a year.”
The “connected home” category has been a strong performer for Best Buy, helping to drive overall sales for the past three quarters.
Piper Jaffray analysts believe Best Buy stands to benefit as more people adopt smart-home gadgetry, calling the company a “notable standout” in a June 26 industry note.
Focusing on seniors and their families allows the retailer to build on its existing “connected home” offerings and to leverage the expertise of Geek Squad, Spieckerman said.
“Once Best Buy hones these skills from a training standpoint, they can parlay that model in any number of directions,” she said. “Plus they’re gaining access into people’s homes, which is what everyone from Amazon to Google and all the rest wants.”
Best Buy launched a pilot of the Assured Living service in January after hearing from 30- to 50-year-old customers who were juggling caregiving duties with busy jobs and families. The retailer worked out the kinks with about two dozen employees and their families. Results were so positive that executives decided to expand the pilot in the Twin Cities, with the aim of quickly adding more cities.
“This is very different from anything that we’ve done,” said AJ McDougall, general manager of Best Buy’s strategic growth office, whose job is to identify emerging trends in consumer technology. “It’s very personal, it’s emotional. Every employee who has touched this experience walks away and says we have impacted a family’s needs in a different way than we’ve done before.”
Options range from basic cameras and motion sensors that cost $200 to a range of smart products that can learn a person’s typical pattern of activity and alert family caregivers through a smartphone app to unusual changes that require attention. Those items can cost up to $1,000. The service plan costs $1 a day on top of the hardware.
Seniors can use voice commands to turn on lights, lock the doors or adjust the thermostat. A doorbell camera allows them to see who’s at the front door, which adds a sense of security but can also save precious energy for someone recovering from a fall or knee surgery.
Meanwhile, caregivers can quietly check to see if their parents locked the front door before going to bed or whether they got up multiple times during the night, a possible flag to a health issue that needs attention.
Former retail workers undergo in-house training to handle the sometimes-delicate negotiations between concerned adult children and their fiercely independent parents, who want to stay in their homes as long as possible without meddling from their offspring.
McDougall said it was important for users to feel neither snooped on by their adult children, nor overwhelmed by technical gadgetry they didn’t understand.
Best Buy declined to make any of the technology testers available for an interview. But McDougall, who convinced her mother to sign up as a beta tester, said her family’s experience mirrored that of many others: more peace of mind.
“We’re calling Mom twice a day, we drive over once a week. We’re checking in because we feel ultimate responsibility to make sure she’s OK living in her own home,” McDougall said. “I’ve got data at my fingertips to know how Mom is doing. Is she active? Is she up and about her home? Did she take her medicine today?”
Staff writer Kavita Kumar contributed to this story.
via PSFK http://www.psfk.com/
July 17, 2017 at 07:05AM