Last week’s blog was titled Beating the Drum on Tech Merchandising. I’m continuing to bang that drum! This time on what may be the most critical of all merchandising decisions. The development of your tech standard and options scheme.
When you think of merchandising and its origins in retail stores, standard offers don’t come to mind. You don’t walk into a store with an understanding that you have to purchase a standard sport coat and slacks to get the shirt, tie and shoes you want. But in new home or automobile shopping, there is a base model with a set of features incorporated as standard that you build upon.
Selecting your tech standard is critical because it establishes your baseline tech differentiation with other new homes and resales homes. In theory, that should help you sell more homes, more quickly because you are providing demanded features and benefits not available from competitors. It also lays the foundation for the sale of more tech options and upgrades, driving increased revenues, profits and buyer satisfaction.
On a webcast earlier this month I talked extensively with Nortek/Elan Director of Builders Services, Bret Jacob, about his experience working with builders on tech merchandising and marketing plans, boiling down the topic to these takeaways:
- The standard should NOT be network infrastructure only. This is a hangover from the structured wiring boom in the mid-2000s when homes were being future-proofed and made Internet-ready. It was before wireless networking began ruling the roost. Connectivity in homes was a hot, differentiating feature in the day, but it’s not a differentiator now. Robust hardwired and wireless network infrastructure does need to be part of the standard, as it is in many cases the enabling technology for a myriad of upgrades from controls and security to multi-room audio, it just can’t be all of it.
- The other part of the standard needs to deliver some experiential homebuyer benefits. The most common right now is what I’ll call smart home security. That’s a video doorbell, electronic lock, networked thermostat and basic remote lighting control for the exterior and entrances of the home. It might also have additional cameras or intrusion alarms. It might include a WiFi control and camera at the garage door to facilitate package delivery. But some combination of these features appeal to 60-80% of homebuyers and are expected by nearly half. It’s just a great package of convenience, comfort, energy savings and security that’s headed toward near universal appreciation.
- Places, where could be heading, include the obvious play of the moment–healthy home tech, and connected kitchen appliances that extend the convenience benefit.
Like Bret says: “When homebuyers can feel and visualize the benefit of your standard, you’ve got something to promote as difference-maker vs. resale and other builders. And we help builders with messages and market assets to tell that story and truly harvest opportunities from the investment. When the buyer feels and envisions the standard benefits, it also fuels their interest in other tech options – either more and better smart home security benefits or even into the AV and enjoyment realm. Standard + Options decisions are one of the real keys to builder success with tech.”
This post launches the day after Memorial Day, so I’ll extend my appreciation to Bret, who served our country in the U.S. Army and to all the veterans who’ve served and protect.