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Target Updates Smart Home Concept Store With Startups

When Target opened its Open House in San Francisco earlier this year (see TWICE, July 20), it signaled that the world of smart homes and the Internet of Things (IoT) was finally exiting the hobbyist stage.

As these products are entering the consumer mainstream, Target realized that it needed a different retail presence and a higher touch to explain the benefits of these innovative new products. The Open House was the result, a retail destination that was part consumer experiment and part mad laboratory for these new devices, with interactive tables, a mock home installed in the middle of the store with connected products in place, and a data-driven tracking system to watch where people went within the house and which items caught their attention.

That data has led to the latest reset of the store, with Christmas right around the corner. As Target has figured out more of what is pulling in consumers, and what they are interested in, the store and the product selection has shifted. For instance, with the importance of common platforms that allow different devices to talk to one another, there is now a lab area where visitors can get a better understanding of the ecosystems that tie these products together.

But the most interesting part of the reset is the system Target is putting in place to continue to bring the latest and most innovative products to their store. As these are new products in new markets, the normal retail funnel of products, buyers and established companies does not work particularly well. Instead, Target has focused on the concept of “curation.”

For the discount chain, curation means the ability to quickly assess these new technologies, understand how they fit into the overall ecosystem, and then how best to present them to their audience. To that end, the retailer has started working with Indiegogo, a leading crowd-funding site, to find the hottest companies that are being funded there. From that comes a new part of the store reset, where Indiegogo and its startups now command a corner of the location.

For new companies under consideration for inclusion in the Open House, Target employees get hands on for two weeks, bringing the products home, installing them, and trying to connect them to other smart home or IoT products. They consider the industrial design of the products, and how well they will pull in the audience. And they give major weighting to how these products “play well with others,” as they see this as key to the growth of the market.

This is important because the Open House is a fraction of the size of a full-line Target store. As Adam Laskowitz, senior user experience architect and member of Target’s enterprise growth initiatives team, explained it, “For the amount of square footage we have, there’s not that many places to show products, so we wanted to follow the model of ‘scarcity breeds desire.’”

In addition, as the entire location is very story-driven, this is taken into account as well. For instance, in the “bedroom” section of the house, clicking on a button starts a narrative of waking up in the morning with these products. Said Laskowitz, “So for this morning wellness scene, the cool thing about products like the Hello Sense is they are really solid-point solutions. And although they don’t necessarily connect to other products, when you start to look at that plus the Withings scale, plus the Jawbone, now you have a really complete story around health and wellness, which is a category that is super important to Target.”

Ultimately, the Open House is not just an incubator for these products, but for Target overall. Already, changes have been made to how the retailer sells these products online, based on its experiences with the Open House. And it has also started to feed products to the flagship Target stores that are promising, but don’t quite meet the curation of the Open House itself.

Meanwhile, the relation with Indiegogo has started to expand to including helping young companies get more “retail ready” before their products hit the shelves. In this way, the Open House is not just helping Target, but over time looks to become a major element in growing the market overall. And this way, they are really helping everyone, most of all the consumer.

Christopher Caen is a frequent contributor to TWICE and The Huffington Post. He is also a partner and chief brand strategist at Theory Associates, a strategic branding agency that creates demand for some of the top names in technology. He can be reached at [email protected].