Dixons prepares to enter smart home market

Dixons prepares to enter smart home market

Dixons is moving from products to services

UK retailer Dixons Carphone is moving to become a service-based business, and looks set to enter the nascent smart home market in the near future.

In an announcement on Thursday, the firm revealed that it is launching a ‘while-you-wait’ smartphone repair service, fixing cracked screens, corrupt software or charging problems in-store while customers wait.

This is part of a bigger project to build Dixons Carphone out from a products company, selling refrigerators, TVs and other electronic goods, to a £1 billion technology services business.

Internet of Business understands that this will see the firm eventually expand into the growing smart home market. Using its Knowhow and Pinpoint services, the firm – the result of the 2014 merger between Dixons Retail and Carphone Warehouse – will seek to monitor and managing white goods and consumer electronics on behalf of the customer.

More details on that are due in September – interestingly, the same month as Amazon’s Alexa smart home assistant is expected to launch in the UK.

And at an IoT event in Barcelona last month, a Dixons spokesman hinted at the change in business models, and the firm’s entry into the smart home space.

“If it was bought it from me, Amazon or John Lewis, I don’t care. We want to be helpful; we know people shop around, that people buy from different places. If we want to be helpful in the home, we can’t care where you bought it.”

Related: 6 real-life examples of IoT disrupting retail

Smart home ‘a nascent market’

Jon Carter, UK head of business development for connected home at Deutsche Telekom, said that the connected home market is about to go big.

“It’s evolving very slowly to be honest, as it’s still a very nascent market. But if you look at analyst predictions, the market is about to explode. We are probably where the smartphone was in 2007, pre the iPhone. You could claim that the Amazon Echo will do what the iPhone did to the 3G market.”

Carter added that, today, consumers own eight connected devices in the home, although most of these don’t communicate with each other. Analysts believe this figure could rise to hundreds by 2022.

However, Carter says that the market will be fiercely competitive with everyone from telcos, utility companies and retailers fighting over the customer relationship.

“It’s going to be fascinating,” he said. “You’ve got Amazon, Apple, Google and the developments those companies are enabling, whilst most telcos are enabling IoT in their broadband routers – it’s in the public domain that Deutsche Telekom will enable IoT in broadband routers in Germany next year.

Retailers and insurers see market opportunity

“Then you’ve got the retailers, also the insurers are actively looking at this market, warranty providers, utility companies…Other companies are looking to turn up the spin cycle of switching [services], and part of what retailers are doing is enabling that (Ed – Dixons Carphone has been active here, acquiring Simplifydigital this March). Manufacturers are also looking to go directly to market, to build a direct relationship with customer, and not through the retailer.”

He added that, while customers don’t actively go out and buy ‘smart’ products, they will seek out products that make their life easier.

“It all starts with customer need and their pain points, there’s no need for smart homes per se, but the customer does have desire for greater piece of mind, to stay in touch with loved ones, and know that everything is OK at home.” Some markets are bigger than others though, with Carter suggesting that a third of UK homes have an alarm system, compared to just 1.2 percent in Germany.

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