T-commerce is an innovative new marketing avenue that enables brands to connect with consumers directly via smart TV. Essentially acting as a marketing channel, t-commerce facilitates addressable and interactive advertising, its main benefits being connectivity and scalability.
In the United States today, almost 3 in 4 households have at least one active connected TV device, with the reach of voice-enabled devices expanding at a startling rate. Marketing industry experts predict that smart TV OEMs will tap into the t-commerce revenue stream, seeking to boost margins in what is already a highly competitive market.
The parallels between t-commerce and the early stages of mobile commerce are clear. Just a decade ago, few people could have imagined themselves using their mobile device to order groceries. Three key developments facilitated this paradigm shift in consumer behaviour: widespread implementation of user-friendly commerce interfaces; an explosion in connectivity following the development of smartphones; and formalisation of secure payment systems. Sales via m-commerce mushroomed from under $25 billion to $208 billion between 2012 and 2018. By the end of 2021, m-commerce sales are predicted to surpass $420 billion, accounting for almost 54% of all e-commerce.
M-commerce, meaning the buying and selling of goods through mobile devices, really took off when app developers and OEMs began incorporating user-friendly commerce platforms on their mobile devices. TV OEMs are already doing this, with all the major players – from Sony to LG – building capacity for retailers to introduce storefronts on devices, thereby enabling t-commerce.
For example, in the United States, the ShopTV app is available for download to almost 50 million smart TVs. Although the current user community is much smaller, estimated in the tens of thousands, the interface is there and ready for use once consumer awareness is sufficient to scale the user base.
There are significant incentives for smart TV OEMs to do everything they can to facilitate the growth of t-commerce. They operate in a highly competitive market where profit margins grow thinner year-on-year, placing emphasis on OEM’s ability to pursue new monetisation opportunities.
Possible revenue generation models could include CPM-based reach metrics, or payments based on sales generated via the OEM platform. Testing will no doubt be required to identify which model works best, providing the greatest revenue generation potential, but both of these models are viable, having already existed in the digital advertising ecosystem for some time.
The way people use TVs is evolving, transitioning from a traditional ‘lean-back’ experience, to a user-centric, on-demand environment. Today’s viewers are more discerning. They expect to be able to choose what they want to watch and when they want to watch it, consuming content at will, rather than being confined by the broadcaster’s scheduling. This evolution has created significant opportunities for brands to leverage t-commerce as a two-way street, enabling consumers to interact with and buy from them directly via their smart TVs. The t-commerce revolution has scope to radically increase brand sales and profits, drastically improving return-on-advertising-spend.
From exercise equipment and blenders to vacuum cleaners, infomercials have – to date – been a popular advertising channel. Many marketing experts cite the infomercial as a precursor to the point-and-click model of t-commerce, enabling consumers to order products in a few clicks of their remote. Research from Hulu suggests that t-commerce is extremely effective, with engaging and interactive advertisements increasing purchase intent by up to 160% compared with standard TV commercials.
Benefitting from the considerable marketing industry experience of its founder Sergey Karshkov, 9 Pandas consistently retains a competitive edge over its competitors in terms of marketing developments, leveraging the latest marketing tech and formulating innovative strategies to help clients execute optimised and effective marketing campaigns.
With Amazon currently testing out commerce within Prime shows and Sky unveiling its new shoppable ad format, industry experts anticipate that t-commerce could have a revolutionary impact on advertising and – ultimately – consumerism as we know it.
