The Ridgedale store will be the first in what could be a major change to how the retail chain sells electronics. Like Google, Apple and Amazon, Target sees the connected home as one the next big things in tech. But the company has found that its shoppers are confused not only about how these devices work together, but where they're actually kept in the store. Would a smart thermostat be in the electronics or home section?

Putting all the devices together in one spot and creating scenarios that emphasize how a smart light and a connected garage work together not only highlights what's possible, it helps sell stuff. "When we have working displays in-store we see a significant sales increase," Nygaard said. "It shows what the experience is like. That's where we really see the benefit."

Target plans on bringing its connected experience to other stores to see how shoppers react. Cupertino, California, and Tribeca in New York City are the next two locations, according to Chief Strategy and Innovation Officer Casey Carl. After that? "We want to become the go-to resource that's credible in this space," Carl said.