Inside the Vivint Smart Home Stores at Best Buy: A Huge Paradigm Shift
CE Pro’s Julie Jacobson visited several Best Buy stores in San Antonio, Texas, where Vivint Smart Home is testing a new business model for selling and installing security and home automation systems.
Julie Jacobson · March 24, 2017
Vivint, a giant provider of professionally monitored security and home automation, is quietly launching a smart-home initiative with Best Buy, starting with seven stores in San Antonio, Texas, and now in 15 Detroit-area locations.
CE Pro, which broke the news about the pilot program earlier this year, has learned the plan is to move into Utah and Arizona next, followed by rollouts throughout the country, possibly to hundreds of stores by the end of the year.
Neither Vivint nor Best Buy is commenting at this time.
I visited a couple of the San Antonio stores recently and was surprised to see the premium real estate occupied by Vivint – about 350 square feet right at the entrance, featuring products on shelves, live demos and a sales consultation area. Two Vivint staffers were manning the space at the stores I visited.
From what they told me, the entire San Antonio crew was selected among Vivint’s best-of-the-best in sales, installation and customer service. Many relocated to the area from Vivint’s Utah headquarters and elsewhere.
At one of the stores, I spent about 30 minutes in the space. During that time, I watched as one sales rep took a customer all the way from demoing the product to writing a contract.
All of the reps at the stores were strong in sales and technical skills, with just some minor technical missteps in our conversations.
From what I gathered, about 100 systems per week were sold and installed in the first two months, with virtually no marketing in the San Antonio area. That means many of the sales came from unwitting shoppers walking into Best Buy to purchase a TV or a cell phone.
The Paradigm Shift: Super-Low Monthly Fees
The big deal isn’t necessarily that Vivint and Best Buy are trying to sell professionally monitored security and automation systems at retail. Virtually every major electronics and home-improvement chain has tried it (often with ADT), to no avail.
And the big deal isn’t necessarily that Vivint has come so far from its door-knocking days. The company is famous for its “summer sales” model – dispatching throngs of youngsters, many fresh from their two-year LDS missions, to knock on doors in multiple cities throughout the U.S.
No, the paradigm shift is in Vivint’s new pricing model.
Typically Vivint (as well as ADT and other providers) offer products and installation for free or at very low cost. In exchange, customers agree to a three-year contract, paying $40 to $70 per month for professional security monitoring and remote home management.
In the Best Buy model, Vivint instead has the customer buying hardware up front and paying a lower monthly rate, with no multi-year contracts. This new model, announced at CES 2017, is an effort to reduce Vivint’s debt burden. Historically, the company’s ROI on residential installations is about three years for Vivint and similar companies that offer low-money-down.
In the case of the San Antonio stores, smart-home packages start at about $700 for a Vivint Sky security/automation panel and some peripherals. Vivint provides 36-month no-interest financing for purchases over $1,000.
It’s the monthly fee that breaks all barriers for professional security monitoring and remote access.
In San Antonio, the fee is $39.99 per month (my understanding is that the fee is $49.99 in Detroit).
That’s for everything including professional monitoring. There is no limit on the number of attached devices and, uniquely, no additional fee for HD streaming and recording of video cameras.
If I understood correctly, the Vivint panels can store up to 500 GB locally, and users get something like 1TB of cloud storage, all included in the unprecedented $40 monthly price.
There are no contracts required for this deal; however, it will probably be a hard habit to break for users, given the video recording and other features that could be lost.
Vivint tells CE Pro they’ll reveal more details soon. In the meantime, I’m looking for some Michiganders to check out the Detroit-area stores.
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Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at email@example.com
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