While the Internet of Things (IoT) may be the preserve of digital startups and tech gurus, there is still a lot of room for conventional retailers to shape and influence growth in this area, providing they apply the correct business model.
The VP and GM of Lowes, Kevin Meagher, has been speaking recently about Lowes’ approach to IoT. Like a lot of their counterparts, Lowes began by stocking interconnected products such as door locks and light bulbs according to customer demand. However, the problems arising from this approach began to make themselves apparent after a while.
These problems started when customers became confused by the fact that certain devices were not compatible with others. Having spent considerable amounts of money on such devices, it’s no surprise that customers were put off. As more devices began to come online, Lowes was faced with a question of how they might interconnect.
Meagher states that while there is great opportunity arising from IoT, it is wholly dependent on a solid business model. He claims that some of the business models he’s come across are not fit for purpose, and that there is a problem with the standards retailers and suppliers are currently applying.
He argues that if suppliers are left to solve the problems of device integration, they won’t talk to each other or provide information about their API’s for fear of their competitors will gain the advantage over them. Lowe’s realized that in order to provide the best service for their customers. they had to take a neutral approach to the situation.
The company is in a strong position to leverage the argument—they are spending approximately $50 billion on products from suppliers of interconnected devices. Their position is simple and clear, they request that suppliers open their API’s and divert their energy towards answering the needs of the consumer.
This is not to say that Lowes is not a player in the IoT game themselves— they recently unveiled their own consumer device hub, which is called Iris. Meagher claims that they stock about sixty items which work directly with Iris using the Z-wave and Zigbee protocols to communicate with the Iris hub. In addition, it also works with Wi-Fi and will soon work across a fourth standard network communications technology.
Lowes is adamant that standards must open up if multiple devices are to communicate successfully in the home. Meagher complains that the market cannot grow if the only way to facilitate this is to buy their device and is adamant that both retailers and suppliers have to be open in order to capitalize from IoT.
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