“Give’em the Razor, Sell’em the Blades”
Back at the turn of the 20th century, King Camp Gillette was pioneering a new kind of business model, whereby you give away the entry level product, and charge more to allow continued use.
It proved incredibly successful, and it even found a place in the tech industry: ‘Give’m the printer, sell’em the cartridges’.
It’s a business model that has lasted the test of time, Gillette is still a global brand over 100 years on.
But the world is moving faster than ever, and new competitors with new business models are beginning to encroach on Gillette’s market share.
Gillette vs Cornerstone
Cornerstone is a subscription based service for male grooming products.
In May 2014, it didn’t exist, and it’s now on track for a £100m sale in 2020. It’s original target for 2017 membership was 24,000, and it managed to hit 140,000.
So why has it been so successful? Their research found that their target market, men, generally don’t like shopping, and don’t really like shaving. But surely it can’t be that simple?
“Don’t forget to click subscribe!”
In October 2018, the BBC published an article: why you’ve probably already bought your last car.
Some of their predictions may have been a bit optimistic, but the premise was simple. With home-working, online shopping, and greater entertainment opportunities in the home, people have less of a reason than ever to own a car. Communal transport-as-a-service, they proposed, was the future.
Thanks to Netflix, Spotify, and Xbox Live, entertainment-as-a-service is already here. So is transport-as-a-service, what with Uber, Lyft, even the humble Boris bike!
But what about products-as-a-service?
Take a look at Graze, the ‘Snack Subscription Box’. Graze use an algorithm to customise snack boxes based on the preferences it learns about its subscribers. As of last year, profits were up 8%, with hundreds of thousands of subscribers.
People are even subscribing to socks. The London Sock Company have customers in 94 countries, and boast thousands of subscribers. The fashion industry is cottoning on (excuse the pun), and more companies than ever are offering sartorial subscriptions.
So where does that leave the smart home?
The Renting Generation
The infamous ‘millennial generation’ is one of the biggest victims of the ongoing housing crisis, with many never expecting to own their own home.
For those renting, they require flexibility from their fixtures and fittings, it’s why self-adhesive temporary wallpaper is enjoying a boom! Offering a service that allows consumers to personalise their living space, within the confines of their tenancy agreement, is vital.
The industry, up until now, has been more focussed on homeowners and permanent solutions. But is this missing an enormous market opportunity?
Offering entry-level products as part of a subscription service would guarantee a more reliable revenue stream for businesses. It would allow consumers to experience the smart home without the large initial investment, and also delivers a helpful marketing tool: ‘if you like this… upgrade to unlock new features..!’
Consumers, even those who are renting, already have most of the technological infrastructure in their homes to power the smart home. But with a technology so new, just like Betamax and HDDVDs, a common way technological framework is needed before the market trusts the industry.
One of the biggest barriers to crossing the chasm from early adopters to the early majority is the entry cost, especially if the technology might be obsolete in the not too distant future.
But what if the customer knew they could ‘upgrade’ their technology as part of a service?
And that’s the next key point.
Other than the price point barrier, the smart home ecosystem is still perceived as just a collection of things. Lightbulbs, doorbells, ovens, TVs, garage doors… it’s all stuff.
It may be possible to garner more interest from consumers if all this ‘stuff’ worked together as a service. Instead of using Alexa or Google Home to play you music and tell you the weather, customers could begin using the technology as a presence in the home to look after them and their home.
A common complaint is that consumers don’t feel they need this technology to achieve basic tasks: switching on lights or ringing the doorbell.
Perhaps the industry needs to be more focussed on marketing their product offering as a whole service, rather than as a series of basic problems to be solved.
The Humble Teasmade
In many ways one of the pioneers of the smart home, the Teasmade was a bedside gadget that combined an alarm clock with a cup of tea.
It was one of the most popular household devices in the mid-late 20th century home, and remain on sale even to today!
The idea of having domestic service reintroduced to the home in the form of technology, even the not-so-subtle inclusion of the reference to ‘maid’ in the name of the product, was always one of its key selling points.
Smart home technology allows us to go further. If your coffee machine could make you your regular morning coffee, and also adds coffee beans to your online shop when you’re running low, the consumer has one less thing to worry about.
If it could also use Artificial Intelligence to learn how long it take you to get out of bed in the morning, it could always serve your coffee at the right temperature.You could even take it one step further and have your coffee machine talk to your shower so it knows if you’re washing before you come downstairs… the possibilities are endless.
Tech companies should be harnessing the power of AI and integrating it with the smart home. The potential is there to deliver a smart home that reaches its true goal: that it goes unnoticed.
Smart is the New Normal
So much smart home tech is still being marketed as something to behold.
And the industry is so focussed on the competitors within the smart home ecosystem, that maybe we’re missing something.
People already own the competition. The lightswitch, toaster, door bell, smoke alarm, and so on.
Consumers want technology that makes their life easier. Products that work together, giving us more time to do what’s important.
Even technology that, to a certain extent, looks after us.
The future could see the reintroduction of domestic service through technology. Service that’s available to everyone through affordable, non-committal, and incremental purchases.
This business model could drive stronger, more predictable revenue streams for businesses. It also reduces the amount of money people need to spend to buy into the smart-home. Above all, this is technology that can improve all of our lives.
A Marketing Agency for the Smart Home
This post was based on our award-winning entry to the Smart Homes and Buildings Association competition on overcoming barriers to the adoption of the Smart Home:
At Beacon, we’re passionate about helping you promote the best parts of your business and celebrating your successes. We’re not about ‘us and them’ marketing, we work alongside your team, getting to know the ins and outs of your brand and helping you tell your story.
Plus, your business isn’t 9-5, so neither are we. We’re contactable over Facebook Messenger or Whatsapp, email, or even a phone call! We’re here to help you with whatever you need, whenever you need it.
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