Are Smart TVs Retail’s Next Frontier?

Television has come a long way — from rabbit ears to cathode ray tubes to its current sleek, flat screen design and smart, connected capabilities. The evolution of connected television has come with an equal progression in TV-prompted purchasing: the ability to make a purchase in real time once an advertisement airs.

As TVs and consumer shopping preferences evolve, the retail industry needs to step up and adapt to the shifts, said Michael Fitzsimmons, CEO of Connekt, Inc. Fitzsimmons explained how Connekt’s ShopTV app enables consumers to buy the products they see displayed on their TV screens from those same screens, in the moment, without having to reach for another device like a phone or tablet.

“The motivation to launch ShopTV was this fundamental belief that, as smart televisions get connected to the internet, the opportunity for commerce to take place on those televisions is real,” Fitzsimmons said. “We’re trying to form a bridge between internet-connected televisions and retailers and brands who want to sell to the end consumer, and then to make it easy for end consumers to actually purchase from that experience.”

Shopping on the Home Screen

The ShopTV app is a far cry from the kind of commerce viewers may have seen on the Home Shopping Network.

With the app, when a commercial appears on a smart TV that piques a viewer’s interest, he or she can use a remote to click the advertisement and buy the product being pitched, or browse similar items from the same brand. The app also displays curated deals, as well as ongoing offers from the brand. And, if the consumer really digs the system, they can also opt for personalized offers and deals.

In some cases, the app is even set up to enable the purchase of products shown on a TV show. For example, a user could buy a hockey jersey emblazoned with the logo of the team playing on the screen in front of them.

In Fitzsimmons’ view, pay-by-TV is at the forefront of new purchasing modes and tech. Just as when mobile phones advanced and consumers became accustomed to mobile purchasing, he believes it is all but inevitable that consumers will adopt TV-powered purchasing habits as improved television technology percolates the market. That time, in fact, may be imminent. That’s because this year marked the first in which more than half of all television sets in the U.S. were connected to the internet.

“It’s a novel concept we’ve talked about for a long time,” Fitzsimmons said. “Consumers haven’t been exposed to a really easy, efficient way by which they can transact from that big piece of glass in their living room.”

The ShopTV app went live in 2017 and has increasingly spread to various smart TV platforms, from LG to Sony, Hisense and Verizon Roku, as well as Samsung devices, he said. Meanwhile, the company has been at work compiling its own consumer data research about the app.

Findings indicate that people who use the app to shop from their TVs are especially inclined to use it to buy household items and consumer electronics. Most purchases hover around the mid-$20 price range, which Fitzsimmons says is likely due to price points of products being advertised and the reluctance of consumers to make big-ticket purchases using a relatively new purchasing system.

ShopTV’s Merchant Brand Channels

While entertainment platforms like Netflix can bypass ads entirely, the ShopTV app was designed to help advertisers reach consumers in new ways. Considering the average U.S. individual watches TV for five hours or longer a day, there is a strong indication that advertisers could benefit big from maximizing their experiences with those viewers by making it easier for consumers to buy products the moment they decide they want them.

ShopTV clients pay a fee to acquire a channel on the app, essentially getting the virtual equivalent of a brick-and-mortar location in a physical mall. Currently, Fitzsimmons said, the company is working toward offering a more consistent experience, so buying products online feels the same as buying them through a commercial.

Early data insights on the app provide testimony for the power of commercials. Research shows shoppers are more likely to buy items from a commercial versus those depicted on a TV show, likely because items on a TV show are displayed with a focus on entertaining, whereas commercials are all about getting viewers to the buy point, Fitzsimmons said.

The Hitch in the Signal

But, like the products that ShopTV’s clients are pitching, the app needs to raise its profile and gain trust among consumers.

“The reality is, most [consumers] don’t know that it exists, don’t know they can do it and don’t even know where they’d … start to do it if they could,” Fitzsimmons said. “[But] if we get the experience right and make it as easy as possible, we really really believe there’s a transformative experience here.”

To improve the customer experience, Connekt has been working to make the purchasing process as smooth as possible. A new Google voice skill for ordering was recently implemented, as well as additional payment methods for users.

Consumers can use Amazon Pay, PayPal or credit cards that can be stored within their ShopTV account. But Fitzsimmons is also interested in finding ways to leverage platform partners’ existing billing relationships, such as letting consumers charge their purchases to their cable bill. He also said there is potential to give consumers more personalized offers and to find more ways to take advantage of the medium’s audio-visual features.

So, will smart TVs become the new home for home shopping and connected commerce? Stay tuned.

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About The Tracker

The PYMNTS.com Intelligence of Things Tracker  showcases companies that are leading the way in all aspects of the Intelligence of Things. Every month, the Tracker looks at what these companies are doing across the ecosystem and in several categories, including Personal, Home, Retail, Transportation, Wearables, Mobile, Infrastructure, Data and more.