Our research showed technology brands in particular suffer from a focus on features instead of stories that demonstrate solutions to recognizable problems. It’s not the technology shoppers care about; it’s the benefits.

Also, most retail environments are ruthlessly measured by sales-per-square-foot. To flip that model and focus on engaging and educating rather than selling, we measured success by insights- and relationships-per-square-foot, as well as by how many IoT products were introduced chain-wide.

We designed Open House, a 3,600-square-foot space featuring a five-room home built entirely from transparent acrylic. Each wall was designed as a projection surface, transforming the entire house into an immersive, interactive theatre.

When visitors enter the transparent house, the devices introduce themselves and their benefits in a friendly first-person voice. Then shoppers take control, choosing from a series of stories demonstrating how connected products solve challenges from restless babies to kitchen fires.

Each animation is generated with live code and an API call to the products, which come to life as the story unfolds. Augmented by sound design elements like a baby’s cries or a window breaking during a burglary, the experience reinforces the human emotion of each story.

After visiting the home and experiencing the big idea of IoT, visitors proceed to interactive tables for a hands-on experience with the individual products. From here, they can purchase products, completing the funnel from education to conversion.

This would not be a pop-up: we had just six months for research, design, software development, fabrication, integration and staffing a fully-operational store.

Open House debuted to immediate fanfare and become a must-stop for shoppers visiting downtown San Francisco.

More importantly, Target now has a funnel for going to market with IoT products based on data from real shoppers.

With new products constantly being introduced in Open House, Target will test over 100 connected devices in its first year. Of these, three have been confirmed as viable and are now available chain-wide: Tile, Petnet, and the Hello sleep sensor.

Finally, Target lept over its competition by forging exclusive relationships with scores of startup founders and hosting dozens of events engaging the public in essential conversations about security, reliability and the influence of connected devices. Target relocated a suite of veterans from headquarters in Minneapolis to maximize these opportunities.

Thanks to Open House, Target has a competitive advantage in the largest market opportunity in a generation.

Target Open House is permanent part-museum, part-store environment in downtown San Francisco challenging the conventional definition of the store.

Not only is it about an innovative subject (the Internet of Things), it combines an innovative strategy, innovative architecture, and innovative technology to introduce a comprehensive new paradigm for retail.

Open House’s location in San Francisco was chosen for its proximity to two cohorts: startup founders and tech-savvy parents. Each represent significant opportunities for Target’s growth.

The experience strategy dictated three spaces: First, an immersive storytelling experience to show (not tell) the benefits of a connected home. Second, a hands-on environment where customers can dive deep into individual products’ benefits. Third, a space for intimate events connecting founders and customers, with room to demonstrate prototypes.

Our early conversations with customers drove the tone and design of the experience. Much of IoT can seem odd and alien—while this may be appealing to “techboys,” it is particularly troublesome for parents. We had to present the devices in a familiar home environment, but still appeal to early adopters—to be both warm and cool. Most of all, we had to show that customers, not technology, were still in charge.

Smart devices are predicted to become a $17 trillion industry by 2020. However, brands struggle to communicate their transformative potential in an emotional way, instead resorting to buzzwords and an alphabet soup of tech specs.

Furthermore, most big retailers like Target can't even engage IoT startups unless they can supply hundreds of thousands of units, an impossibility when many are barely out of prototype.

That's an enormous missed opportunity, since some of those startups may have the next billion-dollar product.

Target gave us —a firm mostly known for museum design—a dual challenge:

1) design a permanent learning lab for exploring how to merchandise and market the nascent IoT category

2) bring founders and customers together for meaningful conversation about the benefits and risks of the connected home