Lowe’s Bets On The Smart Home Market
After a successful pilot of its “Smart Home powered by b8ta” program last fall, Lowe’s (NYSE:LOW) is expanding its connected-home shopping experience to 70 stores in the US. The primary purpose of its store within a store feature, in partnership with b8ta, is to educate shoppers on smart home products, enabling them to “easily discover, learn, and try the latest smart home technology all in one place.” While there is a growing demand for connected solutions, there is also a lot of confusion regarding the use of the technology. Hence, the two companies have together come up with this program to help consumers make more informed decisions.
See our complete analysis for Lowe’s.
We have an $83 price estimate for Lowe’s, which is over 6% higher than the current market price.
How Does This Work?
According to a press release by the company, the mini stores exhibit over 60 smart home products, including security systems, thermostats, cameras, lighting, and speakers, from brands such as Google, GE, Iris, Nest, Sonos, and Samsung. The products are displayed out of the box to encourage consumers to try them out and gain hand-on experience. Furthermore, iPads are placed alongside the item that provides product and pricing related information. Besides the 70 locations that are to be fitted with the smart home outfit, 1,000 Lowe’s stores have rolled out specialized smart home displays ahead of Black Friday and the holiday gifting season. The company also enhanced its online shopping experience to inform customers about this b8ta collaboration as well as to help inspire ideas for users to create their own smarter home.
Lowe’s has made a number of efforts to get up to speed with the constantly changing technology. Earlier this year, the company launched its “Holoroom” experience that helps customers learn home improvement skills using augmented reality. In September, it even introduced two virtual reality apps, one that enables smartphones to easily capture room dimensions and preview appliances and home decor in their home, and another that can interact with virtual products online, helping users to examine the texture and view it from different angles to get a better sense of how it will look in their homes.
Is It A Good Move?
As internet penetration increases globally, along with a significant growth in automated technologies, such as the Internet of Things (IoT), the global smart home market has started to gain a huge amount of traction. The increased adoption of this has also resulted in a drop in the prices of sensors and processors, making these products more affordable. The North American market, where Lowe’s has its operations, is the largest market for smart homes. The market in the US is expected to generate revenues of $15.42 billion in 2017 and is set to grow at a CAGR of 16.3%, resulting in a market valued at $32.81 billion in 2022, according to Statista. The household penetration is anticipated to increase from 10.2% in 2017 to 20.5% in 2022.
Given the impressive growth rates expected in this sector, it is not a surprise that Lowe’s also wants to jump on this bandwagon. The home improvement retailer isn’t alone in treading this path, with many retailers relying on the smart home market as a way of generating revenue from a relatively untapped source. Furthermore, Lowe’s has the scale necessary for making the significant investments needed to make it big in this space.
Have more questions on Lowe’s? See the links below.
- Improving Housing Trends Bode Well For Home Improvement Companies
- Lowe’s Posts A Top and Bottom Line Miss, But Growth Continues
- Can Hurricanes Provide A Boost To Home Improvement Companies?
Notes: