Level Home, Walmart, and Making Smart Home Connectivity Invisible

Level Home’s first product brings a new approach to bringing smart locks to the doors of North American homes. Over the past decade, a host of startups and well-established industry giants alike have brought their own smart locks to market. These locks have ranged from complete systems to add-on devices that sit over existing locks. For its part, Level Home’s approach also seeks to leverage existing installed locks—its design hides away within the door itself. This, coupled with ease of installation and a major partnership, could signal broad appeal for the company’s offering and help change the direction of smart home device design.

Level Home’s approach is geared very specifically to the North American market as its serves only the deadbolt design that dominates the North American market but is not as common elsewhere. The startup’s battery-supported lock replaces the existing deadlock mechanism, adding Bluetooth connectivity and wireless operation. Installation in company demonstrations can take as little as two minutes and, once installed, the existing lock and handles on either side of the door can be reinstalled to work with the new lock. In this way, not only can consumers keep the aesthetics of their existing locks, but Level can avoid the costs of developing and stocking a wide range of designs and finishes.

Level Home says it has already begun shipping its lock in small quantalities, and full-scale sales will begin in 2020. Perhaps as valuable as its ease of installation and the integration with existing locks, the Level Lock will be the smart lock for Walmart’s recently launched smart delivery service. The giant U.S. retailer launched InHome Delivery in October in three trial areas in the United States and smart lock installation is a key requirement for customers who want Walmart groceries delivered into their fridges by Walmart employees. While the Level Home conversion lock is priced at US$249, Walmart customers signing up for a year’s subscription to its InHome service will receive the lock and its installation for just US$49. For its part, Walmart invested in Level Home. In the company’s latest funding round, Level Home raised over US$71 million in funding from Hut 8 Ventures, home construction and real estate company Lennar, and Walmart.

With regard to smart home integration with in-home delivery, Walmart isn’t alone. Amazon’s Key service is available in fifty U.S. markets and supports a range of smart locks including those from August, Schalge, Yale, and others.

The smart home market has long been rife with new investments, new products, and new approaches. There is no doubt that a handful have been revolutionary—Amazon’s first Echo device and the Nest thermostat are two key examples that respectively kickstarted a new category of device and a new consumer interest in smart home capabilities.

There have been strong examples in the smart lock market as well. Kwikset and August both won early traction and boosted smart lock awareness and shipments significantly. August was acquired by global security behemoth Assa Abloy in late 2017, but August’s products have stayed largely separate from its parents branding and existing, extensive product lines. Meanwhile, smart locks have started to transition into the ecosystems of large smart home players. Google Nest, for example, partnered with Yale, another Assa Abloy brand, to integrate smart locks into its family of smart home products while Amazon integrates with a range of third-party suppliers including Schlage, August, and others.

ABI Research believes the ability to add connectivity—and the remote control and key transfer capabilities connectivity enables—while maintaining the aesthetics of existing locks will prove a key draw for consumers. However, Level Home’s approach does not tackle every issue holding back smart lock adoption.

The price point outside of the Walmart promotion remains at the same levels of existing full locks and pricing above US$200 limits the appeal of a smart lock conversion. Voice control was boosted by suppliers selling at below Bill of Materials (BOM) costs, while Nest benefited from promotion and sales through rebates and discounts via multiple utilities (it is unclear if Level Home will appeal to retailers beyond Walmart) as well as, in contrast to the Level Lock, the strong appeal of the look of the device once operational.

In addition, Level has also closely tied its offering to Apple’s HomeKit user base. The lock uses only Bluetooth to deliver connectivity, which means remote management is only possible if there is a HomeKit hub within the home and the signal must reach an Apple TV or dedicated iPad. The company says it has worked to extend its Bluetooth coverage up to around 30 feet depending on conditions, but without offering a bridge or repeater to enable the lock to communicate with other smart home gateways or systems the potential for the integration of the first generation remains limited. For its part, Level Home says that its design will allow support for a range of other protocols including ZigBee and Thread, although, as discussed in the ABI Insight Smart Locks at CES Point the Way (IN-5393), much of the smart home market has started to also offer Wi-Fi in their devices to sidestep the kinds of range and remote access issues the Level Lock contends with.

There are, of course, many factors in the delivery and communications around a new product that determine its success. With its design-based and early partnerships, Level Home certainly looks well-positioned to perhaps drive wider adoption of smart locks in the North American market at least. If so, there may be wider lessens for smart home device development. Level is invested in delivering connectivity, and the potential services and applications that can leverage connectivity, in a format that keeps existing interfaces—keys, door handles, etc.— and requires no visual change to existing equipment.

There are multiple opportunities for connectivity to be extended to devices in the home and for that connectivity to drive new applications and revenue streams. To add that connectivity in a way designed to be installed simply and within existing offerings promises less complexity and less change for the end users. Level Home’s smart lock may only tackle some of the issues that have held back wider adoption, but there is no doubt the company does have the potential to expand the appeal of smart locks and, with that, perhaps influence future smart home design.