At an event on Thursday afternoon, Target TGT +0.00% will unveil what it calls the Target Open House, a 3,500-square-foot retail space located in San Francisco’s Metreon shopping center with a house inside made of transparent walls and furniture. The transparent house is packed full of smart home gadgets.
More than 30 devices are placed around this demonstration house, including smart home gadgets like the August smart lock, the Nest learning thermostat and Sonos wireless speakers. But not all the devices are related to the home – Jawbone and Fitbit fitness trackers will also be present.
The space is focused on showing consumers what all these products do and how they can work together. Target is using an app called Yonomi, which syncs up connected devices together in the cloud, to get them talking to each other. For example, a Belkin WeMo Baby Monitor could detect if a baby starts stirring in a crib and could tell the Sonos speakers to play ambient background noise to soothe the baby back to sleep.
Although it is a retail spot, Target wants the space to also be used for local smart home entrepreneurs to meet up, do product demos and give talks.
The new retail store comes out of Target’s Enterprise Growth Initiative team, which also overseas the San Francisco innovation lab that Target started in 2012. David Newman is the director of the lab.
Big box retailers have been testing out various ways of selling smart home devices to consumers. Earlier this year, Target already announced a dedicated smart home section called Connected Life. Lowe’s sells the Iris Home Management System that syncs up multiple gadgets together. Best Buy BBY +0.00% has its own Connected Home department that brings various home automation products it sells together into one place.
The smart home market has become a crowded place. Investors pumped $454 million into smart home startups in 2014, according to CB Insights. And even with smart home companies like Nest getting acquired for $3.2 billion by the likes of Google, the market is still in its infancy and has barely broken through into the mainstream. Overeall demand for these kinds of products dropped by 15% in the last year, according to Argus Insights. We’ll likely see a shakeout in the market over the next several years.
“We think this area is in pretty early days,” said Target’s PR head, Eddie Baeb. “Target and other retailors are trying to figure out where this world is going and what should our strategy with connected devices be. This is a way for us to be actively learning and listening. We want to build relationships for our future growth strategy.”
Baeb said Target would use what it learns from how consumer interact with the San Francisco space to figure out how to sell these devices in the rest of its stores.