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Multichannel report: Eyeing up iTV

As web-connected TVs become ever smarter and consumers watch through their mobile device, a new type of brand engagement is emerging.

Imagine watching the latest episode of US hit New Girl on your TV and lusting after the stylish dress Zooey Deschanel is wearing. Well, instead of scouring the net to find it, you could, at the press of a button, be able to purchase that dress through your mobile or remote. Welcome to the next stage of shopping: via the TV.

Media experts have hailed interactive TV (iTV) - an umbrella term describing the interaction between consumers and TV content - as one of the most influential emerging technologies. This means interacting with advertising through internet-connected TVs or responding to video content through a second screen such as a smartphone.

Last year, a study by eBay and retail analyst Conlumino cited iTV as an important new channel, predicting more than a quarter of UK consumers would regularly use the medium by the end of 2014, generating sales of £747.3m.

Another study, by payment processing provider WorldPay, found evidence of consumer take-up of iTV, with 5% of global shoppers admitting to having made a purchase through a next-generation TV.

But what does this mean for retailers? Neil Saunders, managing director of Conlumino, believes brands could use iTV as another channel to showcase products. “Fashion is a category where consumers appreciate interactivity and therefore lends itself to videos and rich content, much of which can be displayed on TV,” he says. “You could eventually see more fashion retailers having their own channels to push products and fashion ideas.”

Lali Parikh, strategic content manager at Samsung Electronics UK, says with the company’s smart TV range offering higher picture quality than ever before, iTV is “essentially the next best thing to physically seeing garments in the flesh”.

“This makes the prospect of shopping for clothes and other fashion items via your TV more appealing and exciting for consumers,” he adds. “Shoppers can create a virtual in-store experience thanks to a combination of bigger, clearer screens and, of course, faster broadband speeds.”

Jean-Paul Edwards, head of futures at media agency Manning Gottlieb OMD, says a presence on a connected TV environment, either via the TV set, set-top box or through a companion device such as a tablet, can give brands the opportunity to push messages to support the primary broadcast.

An example of this could be a brand advertising a new collection on TV and encouraging consumers to click another device such as a remote or smartphone, and leading them to content where they could eventually purchase one of the advertised products.

“This will allow for impulse purchase based on products appearing in an ad, or the opportunity to cross-sell associated products,” says Edwards.

Up until now, only a small number of retailers have tapped into this evolving medium, with some of the most innovative retailers leading the way.

Two years ago, Net-A-Porter launched Net-a-Porter TV, its modern-day version of home shopping. The online fashion channel lets viewers interact and click through to buy products featured on its videos, which range from catwalks to interviews. Similarly, Debenhams launched an online TV channel in October 2010, providing viewers with style and shopping advice and letting them snap up products by clicking on a featured item.

Shop Direct-owned Littlewoods recently tested this interactive environment as part of its spring 13 ad campaign. The retailer launched a TV ad prompting viewers to activate the Shazam music recognition app on their smartphones, which then led them through to a dedicated Littlewoods campaign site. In the first week of its launch, the online retailer said it had received more than 22,000 clicks from Shazam. Of these, 68% had engaged further with the brand’s campaign site by interacting with other content such as catwalk videos and a competition.

Littlewoods retail director Gary Kibble says the retailer had invested in iTV as part of a wider strategy to be as innovative and channel agnostic as possible.

“It’s all about platform convergence, the coming together of mobile, TV, internet and tablets,” he says. “Not everything we’re doing is driving ROI - it’s about being innovative.

This campaign was about getting the customer closer to the brand and the numbers we’ve seen so far are encouraging. [iTV] allows for a deeper level of engagement with customers. The only challenge for not just us, but all retailers, is to think of this as a long-term investment rather than short-term ROI.”

iTV can go further than creating brand engagement. Saunders says ecommerce around product placement is another concept retailers should grasp. “This would involve, for example, characters in films and soaps wearing certain products, with customers being able to pull up the details on an interactive screen and placing an order if they wished.”

Still, while the opportunities and potential sales figures look attractive, the whole TV commerce revolution - buying through a smart TV - has yet to take off. Why? Experts believe it is largely because internet-connected TV itself is still in its infancy.

Sean McKee, head of ecommerce and customer services at footwear retailer Schuh, admits that while the retailer is “aware” of iTV, it is currently not a relevant channel. “We just carried out some major research and asked customers about iTV,” he says. “We found that only 1% said they had shopped through this channel or were interested in it.”

McKee adds that while Schuh is interested in innovation, it is not interested in being a first adopter. “We don’t want to be the one educating people,” he says.

Secondly, with retailers having tightened their belts, their focus has been on exploring and investing in more mainstream channels such as mobile and tablet.

“Retailers have been focused on optimising their other channels where the ROI models are known and accepted within the business,” explains Rob Walk, founding partner of digital specialist Digital Innovation Group. “I don’t think many retailers have been exploring new channels, though budgets are being redistributed to allow a bit of innovative thinking.”

The key reason retailers have been slow to adopt this new technology is because internet-connected TVs have yet to become a part of most households. However, take-up of smart TVs is gaining momentum - more than 2.9 million smart TVs have been sold in the UK since 2010, with sales up 211% in the first quarter of 2012 compared with the same period in 2010, according to data released by TV Licensing.

Experts believe we will see more fashion retailers investing in this area as take-up of web-enabled TVs grows.

Saunders says there are likely to be quite a few developments over the next couple of years, especially if Apple enters the TV market. The tech giant is rumoured to be launching a web-enabled set later this year. Amid such activity, Saunders says many retailers are “waiting to see how things pan out”.

As for now, Edwards believes the scalable opportunity for retailers comes through interacting not with the TV set but via the second screen. “The short-term focus should be on dual-screen initiatives, especially those that can inform activity on the main screen,” he says.

Edwards is also optimistic that iTV’s “eureka moment” will arrive. “It is still looking for its iPod moment, when we all suddenly realise what this new technology is for and become shocked that we were able to live without it,” he says.

In other words, watch the space in the corner of your living room.

Read more from the Multichannel report

Story in numbers

£747.3m Amount in sales iTV is expected to generate by the end of 2014
Source: eBay and Conlumino

5% Number of shoppers worldwide that have purchased using a next-generation TV
Source: WorldPay

2.9m Number of smart TVs sold in the UK since 2010
Source: TV Licensing

2011 Year Net-a-Porter launched its online TV channel


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