Is Your Company Ready for Shoppable TV?
As consumers, we’ve been long conditioned to look at television as more than a mere entertainment and informational device. As the enduring popularity of QVC and the Home Shopping Network has demonstrated for decades, watchers often covet the goods and products they see onscreen, which creates a fantastic opportunity for savvy marketers, provided they partner with the right technology and outlets.
In recent years, a confluence of events has ushered in a new era of shoppable TV, including technological innovation and advancements, a shift in consumer buying behavior from brick-and-mortar retail to online e-commerce, and the increasing consumer adoption of streaming and on-demand entertainment, trends that have been accelerated due to the COVID-19 pandemic. Exciting new sales opportunities are now available to companies that, with the right planning and execution, can benefit from shoppable TV.
Rory Cutaia, founder and CEO of Verb Technology, says shoppable TV today is best defined by new tech that offers a more engaging, interactive, social shopping experience thanks to clickable video that eliminates the friction with traditional shoppable TV shows.
Back in the early days of direct response, interested buyers needed to call a toll-free number and go through numerous steps to complete a sale.
“Recent data suggests that the friction associated with this legacy process resulted in a loss of up to 80 percent of interested buyers who drop off before completing the multistep process,” he says.
“Today, the call to action may be to take out your camera to scan a QR code that takes you to a retailer’s website or product detail page. Digital watermarks or audio cues can also be embedded in ads to drive from TV to commerce,” explains Josh Perlstein, CEO of Response Media.
Decades-long models inherent in today’s shoppable TV include direct-response marketing, e-commerce, and influencer marketing. Combine those capabilities with the fact that 88 percent of Americans claim to use a second device while watching TV and viewer’s growing distaste for traditional advertising, and it’s easy to see the appeal for businesses.
“Shoppable TV can solve for all these issues by limiting the ad’s intrusion in the content and by leveraging the second device to surface the ad,” says James Lamberti, chief marketing officer of Conviva.
Moreover, selling products via shoppable TV offers a deeply personalized purchase experience, according to Bobby Zhou, associate professor of marketing at the University of Maryland’s Robert H. Smith School of Business.
“Consumers may feel more connected to a brand or product often because their favorite TV characters are actively using these products,” Zhou adds.
Clark Boyd, head of strategy at Cadeera, points to three recent factors that have made shoppable TV feasible: (1) everyone has a smartphone; (2) TV stations and streaming channels/platforms have the technology to display ads that tie into retailer inventory; and (3) everyone is accustomed to using QR codes now, and shopping online is natural.
Brian Handrigan, CEO and cofounder of Advocado, also credits the emergence of innovative technology that enables companies to embed their TV spots with audio watermarks that can then be detected by smart TVs or mobile devices when a commercial or program airs, no matter the time or channel.
“As a result, brands can now actually decode when a broadcast segment is being experienced at the personal level, as opposed to when a broadcast airs for a general audience,” he says. “The beauty of the watermark technology is that it does not rely on creepy practices to target or track consumers. It merely sends out a signal that advertisers can capture without IP addresses involved.”
That partially explains why 92 percent of viewers in a survey prefer shoppable TV to traditional TV ads nowadays.
The evidence of shoppable TV’s broad embrace by content providers and consumers alike today is plentiful. Cases in point:
- NBC Universal has introduced shoppable TV in its programming. Its shoppable TV campaigns, on average, convert 73 percent more consumers than industry benchmarks for commerce-enabled campaigns, which average around a 1.5 percent conversion rate.
- Netflix is expanding its shoppable TV partnerships and is bringing shoppable TV to the new season of Emily in Paris.
- Pinterest has just introduced shoppable TV on its platform.
- Amazon has launched Amazon Live Shoppable Livestreams, a series that incorporates live product demos, creators, and chat.
- YouTube offers brand extensions that provide more information about in-video products.
- In late 2020, Tommy Hilfiger attracted 14 million people to a livestream shopping event and sold out of hoodies in two minutes.
- U.K. companies like ITV and Sky Mobile are also experimenting in this area, including a partnership with LG.
Lamberti believes shoppable TV prospects are best targeted on streaming platforms.
“Despite predictions of a pandemic peak, streaming adoption continues to gain ground in almost every region quarter after quarter,” he says, citing Conviva research that found that streaming viewing time grew 21 percent worldwide in the third quarter of 2021 versus one year earlier. “Streaming technology is fundamentally a better platform for shoppable TV as it combines the creative impact of linear TV with the digital capabilities of the web.”
Boyd notes that, in China, live shopping on WeChat video streams remains phenomenally popular.
“This is a natural setting for shoppable TV; users are close to a screen that has e-commerce capabilities built in,” he says. “In the U.S., shoppable TV still typically refers to smart TV screens that can overlay product information and a QR code or URL. But the future lies in a blend of these arenas, with the TV screen becoming much more connected to the digital world—to the extent that the distinction between the two dissolves.”
Cutaia adds that the data coming out of China, where they are about two years ahead of the U.S when it comes to shoppable TV, suggests that virtually anyone selling almost anything can benefit.
“China’s numbers are astounding. A single influencer, in a single livestream shopping event, recently sold over $145 million of merchandise,” Cutaia says.
OPPORTUNITIES AND CHALLENGES
Dan Aks, president of Undertone, a digital advertising company, is increasingly enthusiastic about shoppable experiences available across all screens and devices, including display, video, and connected TV (CTV).
“Shoppable experiences…allow users to add products to their carts from a single click on an ad, which mimics the experience consumers are used to seeing when directly on a retailer site,” he says, noting that the latest innovations have shortened the purchase process for consumers.
Boyd agrees, noting that companies can reach consumers at the moment of inspiration.
“Consumers can go from ‘I want it’ to ‘I bought it’ in an instant,” he says.
Furthermore, the formula for sales success is well established: attract buyers’ attention; keep them engaged long enough to educate them on your value proposition, with messaging that leverages their innate propensity for impulse buying; then eliminate all points of friction for them to complete a purchase.
On the downside, most consumers are not yet accustomed to shoppable TV.
“Some may see it as a gimmick,” Boyd notes. “And measurement still lags behind other areas of advertising.”
Deborah Goldring, associate professor of marketing in the School of Business Administration at Stetson University in Florida, cautions that this proposed marriage of entertainment and merchandising is still in its early stages.
“Consumers have expressed some interest in the convenience of shopping while watching TV. However, it remains to be seen whether consumers can effectively switch their attention from enjoying entertainment to persuasive appeals and back again,” she says. “One of the issues that could slow adoption of shoppable TV is that it fundamentally changes TV watching from a passive, low-involvement medium to an active, high-involvement medium that encourages viewers to purchase products and interact with the TV screen. Consumers may be hesitant because they do not want to work with a medium that was previously considered ‘relaxation.’”
Furthermore, there’s a common misconception that the shopping response occurs exclusively in the broadcast experience. Yet this ignores the fact that the customer journey today involves multiple channels and screens, Handrigan adds.
“People are on their phones while watching the screens in their living rooms. Therefore, even if shoppable TV drives engagement, that does not necessarily mean there isn’t a connection between broadcast influence and digital behavior,” Handrigan says. “Advertisers need to recognize that consumers are going to respond in the means that they choose, not the means that [advertisers] ask them to. To capitalize on the actual shopping moment, advertisers need to optimize their pre-segment and post-segment messaging.”
Something else that could slow adoption is the growing number of remote-control devices and the complexity of multi-purpose buttons.
“The additional functionality that’s required for shoppable TV means even more remote-control buttons to figure out. Current TV remote control devices lack alphanumeric keys, which are common on mobile phones. Until keyboards and mice are more common as the interface when watching TV, consumers may not find shoppable TV convenient,” Goldring continues. “Security issues may be another problem. The newness of shoppable TV gives the perception of less security relative to established web and mobile e-commerce.”
Additionally, publishers must solve core streaming measurement and technology issues like quality of the experience and attribution, Lamberti believes.
“Until they do, shoppable TV will remain a niche play in a brand’s overall marketing strategy,” he predicts.
Lamberti also points out that brands and categories that are most active in e-commerce today are the best prospects for shoppable TV.
“The key to shoppable TV is instant gratification, so low- to mid-priced items that lend themselves to impulse purchasing, such as shoes and apparel, are excellent candidates,” he explains. “Luxury brands that can take advantage of wealthy audience demos associated with events like the Masters, Wimbledon, or a high-end cooking show are, too.”
Per Zhou, products that are already well-known but lack the final push to conversion, such as cosmetics, are a great fit.
“Consumer packaged goods clients are the best use case for shoppable high-impact formats, as they are typically sold at major retailers and easy to purchase online,” Aks suggests.
Conversely, products with a lot of options for color, size, and quantity might not lend to the best shoppable ad experience.
WHERE TO START?
Itching to plunge into the shoppable TV pool? You should dip your toe before diving into the water, experts agree.
“Companies first need to do a comprehensive accounting of their product line and then evaluate which products can better take advantage of this interactive shopping format,” Zhou recommends. “Then, brands need to see what types of media content would provide a consistent brand image before reaching out to TV platforms and asking for slots.”
Take a closer look at your inventory, as well.
“It is essential to have structured data with clear labels that can be pulled programmatically from a feed,” Boyd advises. “Next, depending on the channel, explore the costs associated with advertising and setting up the onscreen overlays.”
Potential shoppable TV advertisers should also aim to work directly with premium publishers or content providers; investigate the tech options, such as watermarking and auto-tagging, that makes visual inventory shoppable; and weigh the costs and benefits carefully.
“Synchronization is also important. Brands need technologies that can sync secondary devices, where consumers can get complementary messages with the opportunity to learn more and act on that information,” Handrigan points out.
And then they should strive for a seamless shoppable element, too.
“If I am watching an episode of Frasier, I may wish to replicate the style of his apartment or purchase similar shoes. If I am watching a gardening show, it may remind me to buy some new equipment or clothing. The key is for consumers to be in control. Allow them to engage and seek out more information on their own terms,” Boyd says. “And work hard to understand the customers’ mind-set when they are watching. Are they inspired, intrigued, or called to action by what they see?”
Above all, don’t wait too long to test out shoppable TV.
“It’s too important to the future of impactful advertising to be ignored any longer,” Lamberti says.
In fact, many experts expect 2022 to be the year that shoppable TV goes viral. But even if it doesn’t, it’s likely just a matter of time.
“It’s absolutely here to stay. Investing in it now will ensure you are ready,” Lamberti says.
As the interactivity of TV, with the help of virtual reality headsets, smart glasses, and other connected devices, continues to improve, “consumers’ transaction costs to utilize shoppable TV will continue to decrease,” Zhou predicts. “Coupled with more tech-savvy younger consumers, shoppable TV has a bright future ahead.”
Handrigan’s optimism is a little more subdued.
“At this point, shoppable TV is not legit. It is a myth because the decision by the audience is not being made during a broadcast ad; it is being made after they are exposed to the ad and begin researching it online, turning themselves into digital consumers as opposed to broadcast consumers,” he cautions. “Nevertheless, with new technologies being leveraged on the market, I am optimistic shoppable TV can be a seamless experience for consumers and a real revenue driver for brands in the future.”
Erik J. Martin is a Chicago-area-based freelance writer and public relations expert whose articles have been featured in AARP The Magazine, Reader’s Digest, The Costco Connection, and other publications. He often writes on topics related to real estate, business, technology, healthcare, insurance, and entertainment. He also publishes several blogs, including martinspiration.com and cineversegroup.com.