The path of commerce is set: It’s going to become more and more digital. And in those areas where retail has already become digital, the borders between e-commerce, mobile commerce, social commerce, etc., will gradually disappear until they have completely dissolved. A key factor that’s driving this development forward is progressive media convergence between different channels and devices.
It’s never too early for online retailers to take this development into consideration.
At first glance, it would appear to be a minor issue within the industry. Bitkom, the IT association, reports a Europe-wide boom in Internet-enabled TVs:
This year, the number of so-called “connected TVs” sold in the EU will rise by approx. 68 per cent to a total of 19.1 million. This means that significantly more than one in three (37 per cent) flatscreen TVs sold in Europe are Internet-enabled. They thereby represent almost two-thirds (62 per cent) of the EU market for flatscreen TVs. “It is gradually becoming standard practice for large flatscreen TVs to have internet access,” BITKOM expert Michael Schidlack tells us.
At the moment, Germany is by far the largest single market, with an estimated 4.6 million Internet TVs sold, an increase of 36 per cent over last year’s figures. With around 2.9 million TVs sold, the UK is the second largest market.
Media convergence reforms the retail sector
The reason for the boom in Internet-enabled TVs is not just the addition of one more high-tech function. For the first time ever, TVs are equipped with a direct response channel enabling the direct communication between viewers and businesses. This development is significant because it sees the convergence of the two media forms with the widest reach. It is this very development towards the convergence of media – TV, Internet, mobile phones, PCs, tablets, POS, etc. – that will give rise to a new form of shopping in the future.
This opens up different strategies and new business models for the retail sector. Some did predict this very media convergence more than ten years ago and identified the challenges that tomorrow’s retail trade would face.
Even today, industry analysts agree that the separation of the various communication channels will become obsolete. For the retailer this means the following:
- Customers make purchases depending on their situation: They are not bound to one location (end device) and have Internet access 24 hours per day.
- One Internet, but many end devices: Today, more than 60 per cent of all orders are placed on the Internet. In a few years, the order form, fax order form and hotline number will have disappeared almost completely. The number of available Internet-enabled end devices will increase.
- Multi-channel becomes Omni-channel: Not only must the campaign chains work equally well on all end devices, but they must also take the individual usability of each device into consideration. With this approach, Stephan Randler, editor-in-chief of the mail-order industry magazine “Versandhausberater”, for example, sees a renaissance of the mail-order catalogue. However, not in print form, but on a tablet PC. The iPad would appear to be virtually predestined for “couch commerce”. On the one hand, it enables sales-boosting product placement, yet on the other hand it does not tie the user to a stationary PC. Those retailers, who recognise when and on which end device the campaign chain should be initiated, will have the best chances of success. The processes of assessing and creating demand will move even closer together.
Concerning fridges and TVs
It is extremely interesting to look at a few scenarios in which media convergence has a particularly significant impact. For example, the TV that is able to place orders: Products and services advertised on TV can be ordered immediately on the Internet. The order is placed using a suitable input device, for example a remote control. Or the viewer shares an advert directly with his friends in a social network via the TV.
In-video ads may be of particular interest to manufacturers and retailers. The viewer watches a film or a football match and decides (situation-dependent purchase) that he wants to buy the hero’s outfit or the player’s shirt. The viewer then marks the article of clothing he wants, and a list of suppliers from whom he can buy the product is then displayed on a split screen. The purchase is also made by remote control.
The Internet also has a place in the kitchen. Fridges are fitted with an Internet connection and react automatically to any changes in what’s inside. For example, if you’re running out of milk, either an order is placed automatically with the online supermarket or the user receives a message on his smart phone or iPad. Today, experiments are being carried out with “intelligent packaging” based on RFID.