Is the partnership between Roku and Walmart a big deal?
Key Points
- Now, you can make purchases right from your Roku TV.
- The collaboration might encourage more advertisers to use Roku's platform.
- It suggests that future TV watching may involve more interaction.
Roku is a streaming service, and Walmart, a major retailer (WMT 0.86 percent), recently announced a partnership to offer interactive commercials to Roku customers. This arrangement, which enables viewers to shop from their televisions, is hailed as the first of its kind.
Roku isn't getting much attention from Wall Street because its stock has dropped 13% in the last month. But here are some long-term implications of this agreement for Roku.
Bringing online shopping to television
The idea of shopping while watching television is not new. In the 1980s, QVC, a television network that offers merchandise to viewers 24/7, was established. But online shopping is a mess.Do you desire the brand-new air fryer you saw on television? Call a number and hold while you review your payment information verbally. It causes pain in the neck.
But the adtech platform from Roku has the potential to change that. Based on the first-party data that Roku obtains from you, it will target you with advertisements for products that you are likely to want. By pressing OK on the advertisement with your remote, it will direct you to a checkout page where Roku Pay, its built-in payment system, has already loaded your payment and shipping information. The order is placed with one additional button press.
Walmart will work in the background, processing orders after they have been placed. In other words, Walmart's online retail on Roku is simply a digital showroom. Consumers have never experienced television commerce in a manner so straightforward. Old habits might die hard, so only time will tell how much of an impact it has on viewers.
What does it offer Roku?
Technically speaking, Walmart would be selling the goods instead of Roku. But that's advantageous for the streaming service.
You may be sure that Roku will be paid a fee or be given a piece of the profits from every sale it generates through its advertisements, even though the announcement didn't specify the precise agreements between the two businesses.
The money from those fees should significantly boost Roku's average income per user (ARPU). Roku's growing income per user will contribute to boosting the platform's bottom line and may improve its appeal to advertisers.
With the help of this interactive smart advertising, the company can target users and show brands that it is capable of turning viewers into buyers. To increase ad revenue, it might be a strong offering.
Potential platforms in the future.
Investors can also get a glimpse of what the future may contain thanks to the cooperation, in which TV evolves into a variety of digital entertainment tools. Slowly, TVs have become more capable, and as internet connections increase, new technologies are becoming available.
For instance, using a physical gaming console or PC is no longer necessary because gaming may now be done via the cloud. Imagine being able to switch on your TV, launching your favorite game from your cloud gaming app on the Roku home screen.
As useful as smartphones are, they can't take the place of TVs' big, gorgeous displays, which might continue to be the hub of home entertainment by consolidating video, gaming, and e-commerce.
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