With the growing importance of Smart TV as a channel for retailers, Internet Retailing asked Michael Lantz, CEO of Accedo, to outline the opportunities.
Media consumption habits are evolving at an astounding rate, and marketers have a number of different ways to reach and engage with consumers. An exciting area at the moment for retailers is the rise of internet-enabled Smart TVs, which provide the opportunity to engage viewers and consumers via TV apps. The TV is an ideal platform for video-centric apps, enabling consumers to interact with brands, retailers, broadcasters, and content providers in a living room context.
WHAT IS SMART TV?
Smart TV, or Connected TV, is growing at an astounding rate, with the usage set to increase further over the next few years. Accedo forecasts a total market of around 500 million Smart TV-enabled devices by 2015. A multitude of devices ranging from TVs, blu-ray players, TV boxes and media devices, and games consoles are emerging as app platforms in the living room providing the foundation for continued revolution of the TV experience.
This internet connectivity opens up a wealth of opportunity for advanced user experiences allowing consumers to engage via TV apps to a number of providers of such apps. Market research in the UK show that 55% of Smart TV owners use TV apps always or frequently, with the ratio expected to grow further over the coming years. It is still predominantly early adopters, who have bought and installed Smart TVs, but we expect this to grow into new consumer categories in the next few years, as Smart TVs become more prevalent and the applications more attractive.
WHAT IT MEANS FOR RETAILERS
Over the last decade we have seen the out-of-home market extend into digital and all retailers have embraced online channels as extremely important to their future growth and profitability. Logically, most retailers have now followed their PC services with mobile applications to be able to serve the consumer when and where they want to be served.
It is of course logical that a new attractive mass- market channel like the TV will be a new attractive channel to consumers. However, there are some important learning points before you start to move your online retail experience to the TV.
Firstly, TV is a lean backward experience. Consumers tend to like a more passive experience in front of the TV than in mobile or PC. A key aspect for retail applications is that focus should be on creating awareness and promoting fewer products than on a more interactive platform. Secondly, TV is a video-centric experience. Texts and long descriptions, tables and similar should be avoided, and videos should be used extensively. The TV provides the best screen in the home and is excellent in providing an attractive video experience. Use this to provide additional information, recommendations, and create awareness for products suitable to specific consumers. Thirdly, TV is the world’s most powerful awareness marketing medium. Clever marketing departments can use the combination of classic TV advertising with interactive apps to provide a direct link to consumers via the TVs.
WHAT MAKES A GREAT TV APP
So where do I start in creating a truly compelling TV experience? Here are the four most important guidelines. If you remember these when designing your TV app, you should have a good start.
CONVENIENCE AND SIMPLICITY
When engaging with a TV app, consumers will, by the very nature of a TV environment, be sitting back on the sofa, quite often relaxing after a long day at work. If the app is not convenient, simple, and easy-to-use, consumers will lose patience and go back to watching TV or using another app.
If you can provide context, e.g. to a TV show being viewed, the app will be seen as a good value add by consumers, making them more likely to engage. This is something often tapped into by broadcasters who can offer programme extension services, such as a community or background information. For retailers, linking to high profile broadcasts, such as sports or live game shows or reality shows can provide additional ways to create brand recognition and interaction directly on TV.
The TV environment is about content consumption, not production. Users generally don’t want to input complicated data using a remote control and virtual keyboards. Input should be focused on selection in clear and beautifully designed user interfaces. Avoid all advanced interactions as long as possible, and if you want consumers to complete a purchase on the TV using credit cards for example, wait as long as possible before asking for any advanced interaction. Accedo normally recommends to instead complete the purchase on a secondary screen or have a consumer account which allows for one click purchase directly on the TV screen.
TV is a social environment, with often more than one person in the living room and a joint experience. This is an important factor of the TV, which needs to be considered when creating a retail-centric TV app. For families, it’s likely better to focus on family style retail experiences, like cars, travel or real estate rather than more personal purchases like books or sports goods. However, if you manage to leverage the unique consumer mindset in the living room, you have the opportunity to create a connection with the consumers, which can be monetised in a number of ways.
TV APPS FOR MARKETING PURPOSES
In addition to a retail experience on the TV, it is also possible to just focus on the marketing experience. We believe that this can be an attractive way to complement a TV advertising campaign or an online marketing campaign. Accedo sees four main types of marketing apps for TV.
1. Mini apps – What we call “mini apps” are really extensions to the TV advert. With Smart TV consumers have the opportunity to engage directly after seeing a TV advert. This can be as simple as just directing the consumers to the app for more information at the end of the ad, to actually provide a direct link from the advert to the app. This normally requires more technical integration and will likely only be profitable for larger campaigns, but provides a very neat way to drive engagement.
2. Launch apps – Many consumer products are very suitable for launch marketing. This can for example be new cars, consumer electronics, music or movies.
3. Sponsor apps – This category is applications, which only fulfil awareness purposes and don’t really provide a call to action. Typical examples include branded games and sports sponsorships with interviews with stars. For example, you can easily imagine a major sports celebrity providing their best training tips in an application, which clearly features large sports clothes brands.
4. Content partnerships – This category is interesting and clearly on the rise. Some major brands decide to license content, which attracts the same consumers as their brand, and use the power of content service on TV to get full exposure to the right consumers with the right mindset. Examples can include an outdoors equipment company creating a mountaineering and off-piste skiing service or a kitchen appliance manufacturer creating a recipe app with food videos.
FUTURE TRENDS FOR TV APPS
There is no doubt that Smart TV offers retailers and brands a new and compelling way to engage consumers. I believe that the next few years will be particularly exciting for retailers tapping into this new technology. The penetration levels will grow to become truly mass market with consumers gradually expecting a fully interactive environment via multiple screens in the home.