Retail Observer

RETAILOBSERVER.COM JULY 2015 50 A mong a handful of growing CE trends, Home Technology is clearly in the forefront. The ability to keep tabs on your home from anywhere in the world from your smart device has captured the attention of a market upwards of 87 million homes in America that are owned by their occupants. Within the next few years, Home Technology's gross annual sales will rival that of the television industry. Predictions hold that in five years–40% of homeowners in the United States will be using one form of HT or another. Home alarm systems have been around for decades; nothing new at all. These packages are designed to protect the home by automatically alerting local authorities to break-ins and fire breakouts after the fact. There is no interactive relationship with the homeowner nor is there much in the way of preemptive alerting to any potential threat or hazard to the home. Home security is only one aspect of Home Technology systems. Today you can monitor and control your home heating and air conditioning systems. Come home to a comfortable in-home temperature and save plenty on utility bills. Locking and unlocking doors is as easy as pushing a button. Your entire home entertainment system can be controlled from your cell phone or tablet. Cameras placed inside and outside can monitor activities and conditions around your home. Even your pet's whereabouts can be determined from just a glance at your phone. Think about families whose elder parents live elsewhere either nearby or far away. They can enjoy peace of mind with a few devices installed in mom and dad's house. These can help insure they took their medications on time, locked their doors at night, turned off the oven and many other applications. We've all heard about or dealt with parents or grandparents that are just not ready or willing to move into an assisted living facility. Not only might HT be the peace of mind solution, it can also save the family a great deal of money on the high cost of such facilities. These are but a few consumer motivating applications for HT. For the retailer there is enormous profitability potential in the category. If you set yourself up as a comprehensive full service retail business you can enjoy an ever-growing source of reoccurring monthly revenue. Simply put, checks in the mail each month. When you provide installed monitored systems in a consumer's home, they have to pay a monthly fee to maintain professionally monitored services. You are then compensated by receiving a significant portion of that monthly fee. This is all quite similar to the cell phone and satellite TV business you may have been involved in several years ago. The difference is, those industries capped monthly earnings and timed out after two years (generally). With Home Technology, you continued to get paid for as long as that homeowner maintains service. There are some other financial benefits beyond the instant gratification of monthly revenue. These revenue portfolios add value to the net worth of your business. That's a topic for another more in depth discussion. Lastly, there is also a do-it-yourself aspect to HT. Best Buy, Lowe's, and Home Depot for example, all sell DIY systems. Nothing stopping you from this either. You too can sell "boxes" over the counter that the customer installs themselves. There is no monthly revenue in it, only the margin you make at time of sale. A new category that emerged recently is called Wearables. These are the electronic devices that you wear as you go about your daily business. Apple is making a splash with the Apple Watch. It's a Dick Tracy 2-way wrist communicator 80-plus years later! More than a watch and cell phone accessory, it also monitors your system for health and fitness purposes, and much more. Dozens of other manufacturers have or are entering this same arena. Wearables will be THE hot ticket gift item this holiday season and probably for many more to come. As for gross margins, hey, it's CE! They will be slim. Not for every retail business model but worthy of keeping your eye on. One more thing; let's not forget that you are a retailer. Yes, you may sell appliances or furniture or TVs, but you are a retailer first. Consumers walk into your store every day. People have a constant need for such things as phone cords and chargers, hook-up cables and most of all, HEADPHONES! These are every-day convenience items that we all think about all of the time and need to replenish because your old one broke or you lost it. Or, you just might want another charging cable. Do the math on these HIGH MARGIN items. Sell a few a day, or a week times number of days open for business. The results may surprise you. Jim Sendrak Consumer Electronics Trends Jim Sendrak is executive VP of consumer electronics and marketing for MEGA Group USA. He has worked in the retail business helping to merchandise consumer electronics for three notable national and regional chains. In the late 1990s, Sendrak switched over to buying group management and currently helps the 1,700+ members of MEGA Group compete and profit in markets where "big box" retailers are so prolific. NEW AND EXISTING TRENDS IN ELECTRONICS TO CONSIDER RO

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