The Philips Hue light bulb.
Courtesy of Philips

It's a new 3,500-square-foot space.

By Benjamin Snyder
July 9, 2015

Target TGT wants a head start in the burgeoning Internet of Things business. So, on Friday in San Francisco its unveiling its Open House store: a space created by the traditional retailer to sell over 35 connected-home devices, including a Sonos music player, a smart door lock and smart doorbell, for the next wave of consumers it hopes to tap.

“We’ve been reliant on products and services and market expansion as our means of growth,” said Casey Carl, Target’s chief strategy and innovation officer, to Re/code in an interview. “Although those are great, we also have to be playing on other fronts to diversify our portfolio and make it far more defensible as a business model. Otherwise you can just get picked off from any and all competition over time.”

The move comes as Target hopes to turn around struggling sales and compete with Amazon AMZN by diversifying the types of products it sells. The new Open House business aims to tackle that problem ahead of other competition, such as Walmart and other traditional retailers.

“The Internet of Things is this impending megatrend — a multi-trillion-dollar opportunity,” Carl said to the publication. “So when we talk about where growth is going to come from, here’s a horse I would bet on.”

For more on Target, check out Phil Wahba’s feature on the retailer’s new CEO Brian Cornell.

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