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It’s hard to deny the innovative powerhouse that is Apple. Steve Jobs remains a source of inspiration for entrepreneurs and inventors around the world — thanks to his work creating products people didn’t even know they would want (the iPod, the touch screen phone, aesthetic computers, etc.). Jobs turned customer-driven product creation on its head. Don’t create things people ask for, create the things you know they need.
In Jobs’ absence, Apple has experienced a few years of relatively little innovation. Sure, new iPhones are issued nearly every year and the Apple Watch is certainly beginning to infiltrate the market on a mass scale only a year after its launch. But, many have feared that Apple’s ability to recreate products that stir worldwide transformation is now part of their history, not their trajectory.
Then again, challenge a group of intelligent people, speculate that they can’t accomplish something, and then watch as they are able to do so. After all, skepticism is often the best motivator.
On September 9, 2015, Apple rose to this challenge, issuing a new Apple TV which combines ecommerce with the television experience — allowing the world to watch as Apple transforms not just the online shopping industry, but the retail industry as a whole.
Meet TV-Commerce: Apple’s Big Data Play
With the new Apple TV, consumers can browse and buy items from their couches using a remote. The capability will function similarly to an app or to Amazon’s own checkout — once you enter your payment info, you won’t have to enter it again.
For consumers, the Apple TV will bring the shopping experience to the big screen — at least when compared to screen sizes within the mobile commerce world. For advertisers, retailers and even Apple itself, this announcement could mean something even bigger.
If Apple were to open up the platform to allow for retailer advertising akin to that on Facebook or Pinterest, essentially launching buy buttons all their own, then Apple may very well be primed to outcompete Facebook, Google and Amazon.
That’s not a long list, but those are some of the largest heavy hitters in the industry, and companies against which Apple already competes. But why does this announcement potentially put Apple on top? Easy: transactional data.
The Omnichannel Race to Win SMB Advertising Spend
In the already omni-channel world that is ecommerce, retailers must optimize their advertising dollars for the platforms producing the highest ROI. This is especially true among SMBs, of which more than an estimated one million utilize Facebook for advertising. This has given Facebook an enormous amount of retailer data power — which they use to continually improve their advertising platform and win the advertising dollars of businesses around the globe.
Big box retailers may spend a lot of cash on omnichannel advertising, but all of the aforementioned companies get a piece of that. For Google, Facebook, Amazon, Apple and the like, who comes out on top will be determined by which company best attracts and retains SMBs’ marketing dollars. To do that, each of these companies needs to prove to mid-market executives that their platform produces the highest conversion rates with the lowest possible spend.
It’s a race to the bottom, some might say — and Apple has been falling behind. Without a Google Shopping feed, an Amazon-like marketplace or a social media platform on which to turn conversations into conversions, all they’ve been relying on is their own retailing power. And Apple is absolutely successful at that. After all, in 2014, Apple generated $182.8 billion in sales, a new record for the firm, with $38.5 billion in net income. It had its best year ever — and now, the company is looking to expand from its retailer status into something more, into a channel all its own.
Adding Another Channel to Multi-channel Selling
Apple already produces the vast majority of mobile traffic to ecommerce sites. At least, that’s true for the luxury market. Gilt CEO Michelle Peluso, the retailer with which Apple announced the Apple TV ecommerce integration, said that 80% of the site’s mobile sales come from Apple devices. And this is an important aspect of making TV-commerce a popular pastime.
After all, Apple isn’t the first to try.
QVC or The Home Shopping Network have long used TV to sell — but customers had to call in or visit a website in order to checkout. The Apple TV will remove this requirement. But, even beyond these TV marketplaces of sorts, there are already a number of new TVs which have integrated purchasing into the viewing experience. Samsung offers the “smart TV,” which allows users to complete ecommerce transactions in a near identical fashion to what the Apple TV will now offer. And, according to Fortune, Delivery Agent, a startup that has raised funding from Samsung, has worked with some impressive brands, including H&M to allow people to buy items from their TVs. Sony also partnered with Delivery Agent to add commerce features into the manufacturer’s TVs.
These experiences, however, have yet to fully take off. Similarly to the idea of smartwatches before Apple’s announcement last year, people just don’t seem to be as eager of early-adopters as they once were. After all, as research by Barry Schwartz and other psychologists has shown, having more options not only makes it harder for us to choose something, but we then also find that our choice leaves us less satisfied. And there is no doubt that each of us has a plethora of technology options at hand.
In all, if Apple TV’s ecommerce activity is successful, the company stands to gain a permanent position as a marketplace seller all its own — creating yet another channel via which SMBs can spend their marketing dollars. It will take mass adoption, though. Of course, with Apple’s insanely loyal customer base, there seems to be little the company can do wrong.
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