Best Buy adds home monitoring to services through Vivint partnership

As it looks to further expand its reach into customers' homes, Best Buy is rolling out a new partnership with Vivint Smart Home.

In doing so, the Richfield-based retailer is adding home monitoring to the services that include design, installation and repair.

The Best Buy Smart Home powered by Vivint in-store experience is anchored by a front door with smart locks on it with Vivint and Best Buy experts on hand to explain to customers how it works. It was first tested in San Antonio earlier this year and has since expanded to Detroit.

Now, Best Buy is rolling it out nationwide and expects to have it in 400 stores by the end of this summer.

Consultants will help customers design a customized smart home system that can include locks, lights, cameras, thermostats and other devices and can be controlled from a smartphone app. They can schedule installation as soon as the next day and can also sign up for Vivint's 24-hour home security monitoring system without having to become entangled in a long-term contract.

Best Buy CEO Hubert Joly said the partnership is a good illustration of the retailer's next chapter as it looks to accelerate growth through helping customers figure out how technology can enrich their lives.

"It's not just selling products," he said. "It's about providing services and solutions that help customers, particularly in the home."

As part of his Renew Blue turnaround strategy, Joly created mini-shops within Best Buy stores to highlight some of its biggest brand partners such as Samsung, Sony and LG. Earlier this year, he declared that phase over now that the business has stabilized and ushered in a new road map called "Best Buy 2020: Building the New Blue." In this new period, Best Buy is expanding its partnerships with vendors to also include whole solutions such as Vivint.

"It's its own breed," he said of the Vivint partnership in comparing it to the mini-shops. "I fully expect that over the next several years, we will gradually introduce other solutions that address the customers' needs."

Last year, Best Buy also began piloting an in-home adviser program in which specially trained consultants make house calls to help customers troubleshoot technology issues and custom design solutions for them. That service is now up and running in San Antonio, Atlanta, Orlando and Austin, Texas. Executives have said they will expand the program to more markets this year, but haven't yet said how many or which ones.

"I want us to pace ourselves and do it right," said Joly. "What we're doing is complex. It requires sophisticated skills."

Best Buy already sells a host of smart locks, lights, cameras and other devices that customers can install on their own or use Geek Squad to set up and network together. In the fourth quarter, Best Buy said connected home products were one of the retailer's fastest growing categories. It sold more than 55 million connected devices last year.

Joly said the Vivint partnership brings new tools to Best Buy's arsenal such as the home monitoring service, the enhanced in-store experience and expertise, and the ability to quickly schedule installation.

The partnership with Vivint will evolve, he added. Vivint employees will work inside stores alongside Best Buy's blue shirts. In the pilot programs, the in-home installation has been mostly done by Vivint.

"But over time, don't be surprised if Geek Squad starts doing the installation," Joly said.

Sales of connected home products have been growing, but many consumers are still not very familiar with the range of products and what they can do, said Tom Kerber, director of internet of things strategy for Parks Associates. So while Best Buy may put these products front and center in their stores, they require some added explanation.

"Telling that story is more challenging," he said. "The services don't sell themselves."

So the Vivint partnership makes sense for Best Buy to leverage its expertise in selling and explaining the products along with the quick execution, he said.

Vivint, a fast-growing Utah-based company with 8,000 employees, is now the largest smart home services provider in North America. Up until now, it hasn't had a brick-and-mortar presence, but has grown organically through door-to-door sales and through making cold calls.

Retail stores haven't typically provided an ideal environment for consumers to learn about smart home products, said Alex Dunn, president of Vivint Smart Home. So the partnership with Best Buy has been designed to help address some of those challenges.

"With Smart Home, one of the most important parts of the process is consultative sales, the ability for a consumer to be able to ask questions and have the sales representative be able to custom build a solution for each home," he said.

This will be the first time Vivint's hardware will be available for sale in a brick-and-mortar store.

Dunn added that Vivint's system is already integrated with other devices such as the Nest, Amazon Echo and Google Home. As the partnership with Best Buy continues to evolve, he said the company plans to accelerate efforts to integrate other devices into its system and services.

Kavita Kumar • 612-673-4113