In regards to sales channels, there are multiple ways for B2B suppliers to distribute their products through OEM/ODM business or project cases. Service providers like telcos and utility companies, real estate developers, distributors, dealers and system installers are major B2B customers.
In regards to sales channels, there are multiple ways for B2B suppliers to distribute their products through OEM/ODM business or project cases. Service providers like telcos and utility companies, real estate developers, distributors, dealers and system installers are major B2B customers. For B2C suppliers, they sell products through online and physical retail stores, including connected-home dedicated stores, electronics retailers and retailers like Walmart in the US, Dixons in the UK, and Media Markt in Germany, general online stores such as Amazon, and bricks-and-mortar retail stores such as Staples, Lowe’s and Home Depot. HomeKit-compatible products are available at the Apple Store. For small-scale companies and startups, online sales channels are useful and can help them evaluate consumers' feedback.
Talking about the market drivers, Stéphane Jaubertou, COO of Sevenhugs thinks that retail branding companies (retail brands like Nest, Withings, Netatmo and Apple are major drivers; while, service providers follow the retail market leaders. Jaubertou sees the smart home market changing in France. ”Though the professional installation market is bigger, the DIY retail market has been growing that may surpass the professional installation market shortly in a few years,” said Jaubertou.
Fibar Group provides Z-Wave solutions under its own brand Fibaro to service providers, telcos, utilities, system installers and real estate developers. The company
also utilizes retail channels for distribution. PR Manager Ewa Bujak said, “The majority of plug-and-play devices are sold to service providers, telcos, utilities and through retail distribution channels.”
Significant online sales
Jacques Touillon, CEO at Airboxlab thinks the online retail channel is ideal for getting pre-orders and visibility for hardware startups. He said, “We started with pre-orders on our website and then expanded the sales on Amazon.com. I think it is a great channel for startups when they are still very focus on improving the software part of the device. Also, we conducted a few first market tests in the U.S. with startup-friendly stores like Brookstone.” Touillon of Airboxlab thinks average consumers need to see, touch and feel the products, and get explanations from as well as be convinced by the seller. He thinks online channels are suitable for early adopters, and the retail channels are ideal for the mass market.
CubeSensors sells its products directly through its own website. Its customers come from the United States and Europe. Ales Spetic, CEO, CubeSensors said, “We've already tried some other online channels, including Amazon.com in the U.S. with limited quantities. We are eventually planning to move into physical stores, and to work with distributors. That's certainly a necessary strategy when our sales grows at scale and our product has mainstream appeal.” The startup company Edyn sells its products on homedepot.com and in Home Depot brick and mortar stores across the U.S, in addition to its Kickstarter backers in a number of countries. The company has future plans for expanding product distribution to outside of the U.S.
Rebranding options
Aeon Labs, a leading B2B manufacturer, rebrands its Z-Wave products to its customers, including service providers and security system customers. Dykes, Director of Business Development of Aeon Labs said, “At least 40 percent of our customers choose to rebrand our products. Our products have long been utilized by premium-tier telcos and utilities such as AT&T, rebranding is now an option pursued by even the most boutique and niche of platforms, particularly our security-system customers. What's most interesting about the connected home space right now is that these rebrands aren't segmented to one particular part of the market.”
Aeon Labs reengineers the company’s products for its partners worldwide, creating products that perfectly accommodate regional differences. Dykes of Aeon Labs said, “The connected home trends are the same the world over. As a result, you'll find our products available in mainstream markets such as the United States and EU, but also in markets further afield such as South Africa and the UAE.”
Dykes thinks the biggest emerging market is the installer market. “Smart home system growth is such that there you'll find just as much stock in vans for installation by CEDIA type installers as you will on a physical retail shelf.”
Wulian (Nanjing IoT) sells its products through distributors and project-based cases, which take up more than 80 percent of its shipment. The company is trying to cooperate with some B2C platforms to expand its distribution to online sales channels. The company works with Chinese real estate companies like GreenLand, Country Garden, Wanda and Vanke.
Jennifer Ren, Overseas Marketing Sales Manager at Wulian explains that in China, DIY products like starter kits are sold through online and offline stores primarily, and house builders are in favor of the whole system currently.
New revenue streams
Makers who directly face end consumers are working on new revenue stream instead of making money from the one-time purchase Airboxlab builds its own backend data processing and analysis system, providing this service for free in order to build a database on air pollution and health impact. Touillon of Airboxlab explains, “New revenue stream strictly based on data is only envisioned in 2 to 3 years. In the meantime, new business model could be based on reducing the cost of the device with a monthly or annual subscription fee.”
The smart home market will continue to grow. It will gradually evolve into a lifestyle and norm when the whole ecosystem is ready. Dykes of Aeon Labs said,” When people use apps on their phone, they don't think of themselves as using the Internet. The internet and phones have come together to create this new paradigm. And it’ll be the same with the smart home.
A few years from now people will have wholly responsive and intelligent homes, but they won’t think of themselves as having a smart home. They've just bought a better home than their neighbors have.” Touillon of Airboxlab said, “The future of smart home will really take place once our homes will be fully conceived and managed as a fully integrated eco-system and not an aggregation of hardware-based features.”
CubeSensors thinks the smart home market is evolving every day, but it still takes a lot of time for users to adapt to the systems. Spetic of CubeSensors said, “Most consumers won't make the switch to a smart home overnight, but will gradually make their home smarter room by room, depending on their needs.”