i3 | April 14, 2020

The 'Last 50 Foot' Challenge for Dealers, Suppliers

In the home technology business, the most crucial part of the sale and installation of a system or service is “the last 50 feet” and that once installed, the “quality of experience” (QOE) for consumers in their homes is crucial. Of course, the perpetual shortage of experienced technicians and the cost of sending them to consumers’ homes is a major issue as well.

Enter Daniel Pidgeon, a veteran industry retailer and former CTA chairman, who recently joined Goodman Networks as president of home services. His operation can help alleviate many of these issues for retailers and their suppliers.

Goodman is a field services company that for 20 years has historically done AT&T and DirecTV installations. Starting last year it has been doing ‘white glove,’ last-mile installation and maintenance services for major national retailers and brands moving into the smart home and connected device categories. “We did 10,000 last year, with a major portion of it small IoT,” Pidgeon says.

The retail veteran is turning to regional retailers and specialty dealers, as well as buying groups and suppliers as new customers to do these typically low-margin and costly installations. For one retailer, it redefined how it would use its existing installer base. “We took that unprofitable part so we can provide some revenue. And they can center on what they do best,” says Pidgeon.

The Premium Market

Pidgeon notes that regional or specialty retailers “always looked at the sale” of a home system as a whole. There was profit in the products which subsidized the installation group, but he notes that business plan “is coming to an end quicker than most people thought.” As more involved home automation, smart appliances and IoT systems grow in popularity, he warns, “Without profitable installation models, [dealers] are going to find themselves in a really tough spot because they won’t be able to subsidize that from other parts of their business.”

Regional retailers and specialty dealers are challenged because “the largest retailers are changing the landscape and the way business is done. It can’t be concentrated around storefronts anymore,” Pidgeon says. “Plenty of players are reaching out to their customer bases online. Regional retailers need to be armed with the tools these larger competitors are now using” which increasingly includes quality installation.

Brands are defined by how their products make consumers feel.

Daniel Pidgeon President of Home Service, Goodman Networks

Based on its experience last year, Goodman covered 61% of the U.S. population with its trained employee workforce. He says that Goodman will hire “1,000 new technicians this year to support existing business,” and that their U.S. population coverage could grow to 78% by the end of 2020.

Many networked products are described as plug-and-play. However, Pidgeon says, “While they may be ‘smart,’ they are not ‘simple’ to set up.” A disappointed consumer with a low QOE after an installation is serious.

He says, “Brands are defined by how their products make consumers feel.” A major part of that is the installation of these new connected home systems. Pidgeon says Goodman’s program working with dealers and suppliers will help consumers experience and enjoy their new systems, without having to think about the installation.

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