Home shopping is a market with stable growth throughout Europe, according to Goldmedia in the study The Multi-Channel Home Shopping Industry in Europe. Market Overview, Key Trends and Forecasts to 2022.
Providers of live TV shopping, direct response TV (DRTV) and auction TV have responded well to the challenges of digitisation and have developed into modern multi-channel providers. While selling products on TV used to be the core business of home shopping for many years, the Internet has now become an increasingly important sales channel.
Today, 23% of home shopping customers say they have been enticed by social media when they buy products. New technologies such as smart devices and virtual reality are expected to increasingly influence the market in the future. 78% of home shopping users are interested in product presentation supported by VR technology.
These are results of the study, conducted by the consulting and research group Goldmedia on behalf of the European Retailing Association. The industry report covers the home shopping business in ten European countries (Austria, France, Germany, Italy, the Netherlands, Russia, Spain, Switzerland, Sweden and the UK). The study includes a comprehensive survey of 1,777 home shopping users throughout Europe.
The study was presented and published at the ERA Europe Electronic Home Shopping Conference in Venice.
“Not only does the Home Shopping industry continue to be sustainable and profitable, but this study proves it has the business model, expertise and customers to be more than fit for the digital multichannel media business as well as being a real growth market for the future,” said Dr. Julian Oberndörfer, CEO ERA Europe.
Home shopping revenues in Europe are forecast to grow by 34% from EUR4.8 billion in 2016 to EUR6.4 billion in 2022. This forecast includes revenue figures for the ten countries examined. This corresponds to a compound annual growth rate (CAGR) of 4.9%. (see chart below)
The biggest home shopping markets, such as the UK and Germany, still show notably positive growth rates of around 2% to 4% per year, while evolving markets like Russia are expected to show impressive double-digit growth rates over the next years. Average home shopping sales per inhabitant in 2016 stood at EUR9.2 with Germany being the leading country with around EUR23.4 per capita, followed by the UK. Altogether, around 15,000 people were employed in the home shopping business in the main European countries at the end of 2016, including also indirect employees such as call centre staff.
Today, home shopping operators market their products not only on TV, but also in retail stores, catalogues and customer magazines, websites, social media platforms, mobile and smart TV apps and many more sales channels. This change to multi-channel home shopping is a challenge as well as a great opportunity for the home shopping industry.
The importance of the various channels varies from operator to operator. While phone calls are still the main method of ordering products for customers of the big live shopping operators, for many other multi-channel operators, DRTV shows and infomercials work mainly as marketing platforms for their in-store retail sales. The main change for the future is the rising importance of electronic sales channels. E-commerce and mobile commerce have gained more and more market share and this shift is expected to continue as further sales channels such as social media platforms and smart devices will grow the existing portfolio.
The share of online sales is expected to increase to more than half (55 percent) of all net sales in 2022. Orders via mobile devices (34 percent) will then become the most important way of ordering products, while the importance of TV and orders via call centres will significantly decrease. Moreover, the volume of retail sales will increase. This change is initially an opportunity for the home shopping industry. (see chart below)
With home shopping becoming a more and more electronic and digital business, operators have to face many new competitors, not only the big players of e-commerce but also myriads of specialised webshops. Moreover, more and more e-commerce retailers integrate videos and home shopping elements on their websites, and thus operators have new competition to their core business. Consequently, it is becoming increasingly important to know the needs of the customer and what more they expect from a home shopping company versus an online shop.
According to the study’s user survey, it is clear that home shopping’s main qualities are to be entertaining, sympathetic, informative, enriching, inspiring and personal.
Extremely high potential for home shopping companies to bind customers seems to lie in social media presence. For the personal advice and entertaining presentation of products in a cosy, home-like setting for which home shopping is known, “becoming friends” and interacting on social media is considered to be the logical next step. 84% of the providers surveyed in this report, already run social media activities.
An average 23% of the home shopping customers surveyed in Goldmedia’s European study stated that they have already been enticed by social media to purchase a product via home shopping. Once engaged, they are very likely to stay. Facebook is the most commonly used social network for home shopping users, followed by YouTube.
Interestingly enough, the vast majority of those users who once interacted with home shopping via social media continues to do so. For any platform, more than three quarters of the users stated that they visit the social media sites of home shopping providers at minimum weekly.
Trends: Home shopping users are open for new technological trends, among them Virtual Reality. Home shopping operators do well to adjust to the technological changes: according to the study’s survey, users throughout Europe are very interested in new trends. 87% want to receive offers via mobile devices and 84% product want information via Smart TV. 78% of the users asked find ordering on smart devices via voice command interesting.
Goldmedia’s online survey shows that European home shopping customers seem to expect that virtual reality could reasonably enhance their shopping experience and 78 percent of the respondents stated that they are interested or very interested in product presentation supported by VR technology
