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One in four to shop over interactive TVs by 2014: eBay study

One in four (25%) people will regularly use interactive TV to shop by the end of 2014, generating direct sales worth nearly £750m, new research suggests.

The rise of connected TV will make it the most influential of five emerging new technologies identified in an eBay-commissioned study carried out by retail experts Conlumino. The others, in order of influence, are augmented reality, in-store technologies, image recognition, and smart devices.

Using such new technologies could boost the retail industry by £2.4bn by 2014, says the eBay study. The UK’s 10 largest retailers could each see extra sales worth £235m by using such technologies, the study found. Retailers could see their sales grow by up to 4% by 2014, compared to flat or minimal growth for those that don’t invest.

“We are entering a period of transformation in the retail sector,” said Angus McCarey, UK retail director for eBay. “Consumers are driving this as they demand more choice, more interactivity, specialist knowledge and price transparency.

“Third-wave technologies are about meeting those demands and presenting information back to consumers in ways that haven’t been possible before: using virtual reality to try clothes on, or watching your favourite show on TV and buying the box set at the same time.

“The opportunity for the retail industry over the next two years lies in identifying which technologies will yield the most return on investment. But it’s tough because it means thinking differently about what is driving sales – individual technologies or even individual stores may not yield significant direct sales, but their value may lie in customer engagement and brand loyalty.”

Retail analyst Neil Saunders, of Conlumino, said that beyond direct sales, new technologies could influence sales worth £9.1bn by the end of 2014, compared to £0.3bn last year. Compared to this, the investment required was ‘modest,’ he said.

“Retail is changing as the focus shifts from the channel to the consumer,” said Saunders. “Brands need to move their thinking from channels, loosely comprising of stores, online and mobile, which will become less relevant as new technologies continue to blur the lines.

“Channel convergence was born out of the rise of mobile a couple of years ago and is set to accelerate at an unprecedented rate. Just as major players adopted mobile, they must invest in these new technologies now if they are not to limit growth in the coming years.”

The study comes soon after WorldPay‘s Global Online Shopper Report, which found that 5% of global shoppers had already bought online using a next generation interactive TV. Some 21% already own such a television, and 24% of those who own connected TVs have already bought goods and services using it. The highest users were e-shoppers in India (63%), Brazil (39%) and China (33%).

Phil McGriskin, WorldPay’s chief product officer, said: “The way consumers shop is evolving in line with technological developments and the Global Online Shopper Report shows many consumers are already using some of these technologies that are expected to be influential in the next three years.

“Retailers need to understand which channels are being used by their customers and what services they need to offer to effectively maximise the revenue opportunities now and in the future so they can stay ahead of their competitors.”

A quick guide to emerging technologies

Interactive TV: brings together television and internet.
Augmented reality: by overlaying digital information onto real products, spaces and places, it allows shoppers to see 3D projections of products that aren’t there; shoppers can use it to try on virtual clothes.
In-store technologies: innovations such as using iPads in place of tills, electronic shelf labelling will boost productivity, enrich the consumer experience and improve store efficiency.
Image recognition: devices that recognise objects based on their attributes will allow consumers to search visually for products, read QR codes and help retailers track on and offline behaviour.
Smart devices: ‘intelligent’ appliances might include a fridge that recommends food orders, and could allow retailers to gain deeper insights into their customers’ behaviour.