Like every other new technology, digital TV is busting a gut to
sell itself to business. But will it pull in the punters? Piers
Ford reports
If you believe all you hear, digital television is already up
and running as a state-of-the-art sales medium. In another giant
leap forward for e-commerce, squared-eyed couch potatoes are
morphing into zapper-happy consumers seduced by the limitless
attractions of one-click advertising and instant ordering.
So the living room has been transformed into a personalised
24-hour emporium. And if you haven't incorporated digital TV into
your e-sales strategy already, you'd better look sharp or risk yet
another missed boat.
Reality, of course, is less dramatic. Nobody doubts digital
television's potential as a marketing and sales channel. A recent
Datamonitor report, Digital TV Markets in Europe, 1999-2004,
estimates there will be 39 million digital television households by
2004, nearly 10 million of them in the UK. Much of this growth will
be driven by the evolution of interactive services like shopping
and banking, already established for the PC user but still largely
unexploited by the average television viewer.
But these are early days, fuelled by the scramble of service
providers to mop up coverage in readiness for a market that could
take several years to form. BSkyB claims to be on course for five
million subscribers by the end of the year and already has a
comprehensive line-up of content providers, including Woolworths,
HSBC, Abbey National and Going Places.
Woolworth's SAP-based digital TV site currently generates around
2,000 orders a week (it peaked at 5,000 at Christmas). According to
the retailer, in an integration project lasting just 12 weeks it
successfully moved from manual processing to a digital retail
channel.
Elsewhere, online gaming systems house Orbis has developed sites
for Blue Circle and Ladbrokes that initially offer punters prices
and the chance to register. Building society Bristol & West has
just launched a site giving Telewest subscribers access to a
selection of mortgage and savings products. And NTL, the new owner
of Cable & Wireless's consumer operations, has suggested that
digital TV could deliver basic healthcare consultancy to the home,
giving patients access to information resources and ultimately
allowing them to feed their own data (pulse rates, for example)
back to their GP.
But that level of personalised service lies very much in the
future. Bristol & West's site currently gives access only to a
selection of financial services while Woolworths' site carried just
a fraction of its product range at Christmas. And the ability to
actually place an interactive bet - down to whether or not a
real-time penalty awarded in a football game will lead to a goal -
is still some way off and subject to the resolution of copyright
issues surrounding the owner of the event transmission.
In the business-to-business sector, BSkyB has 200,000
subscribers for Skybusiness, which launched its first dedicated
channel - for pubs - last August. The service provider says digital
TV offers the business community the ability to target specific
customer groups and to communicate with customers and employees in
real-time (for sales briefings, the distribution of product
information and even training), as well as a ready-made
communications infrastructure.
So even if we're still in the foothills of digital TV, clearly a
new strand of e-commerce is being developed that could deliver big
benefits to any customer-facing organisation or any company with a
distributed sales force or portfolio of business partners.
"Digital TV will be able to capture the huge audience of people
who won't want to be on the Web, invest in a PC or any new
technology and so on, but already have a TV," says Tiho
Vukasinovic, senior VP at CRM (customer relationship management)
consultancy eLoyalty.
"It's quite possible that in three years' time the Web will be
the medium for B2B transacting because of hardware needs and the
complexity of the software. Digital TV will be the medium for
consumer interaction, using some of the same technology, but via a
much simpler interface, and with the software complexity totally
hidden from the end-user."
Vukasinovic points out that regardless of the technology the
management of the relationship between an organisation and its
customers will be increasingly intricate. If online selling has
opened the floodgates to 24-hour trading, digital TV could initiate
the deluge.
"There are other major issues which aren't even being addressed
now, such as support availability, as demands will vary in terms of
hours of support needed," he says. People could bank during
Brookside, between 8pm and 9pm, for example, rather than at
their desks during working hours.
"Millions of people accessing companies through their TV will
all have high expectations and demand fast and efficient responses
which organisations need to be ready for," says Vukasinovic.
At Unbeatable.co.uk, the online arm of electronic
and photographic goods retailer Capital Sound & Vision
Group, chairman Clive Swan says monitoring expectations and
delivering services to meet them is crucial.
According to Swan, whose company recently launched a digital TV
site, digital TV is best treated as an additional channel to
market. The key to success is to make sure you apply equally high
standards of service to your customers, regardless of the channel
they use to approach you.
Experienced online purchasers tend to be well informed about
products and will have specific questions about function and
availability. The advancing breed of digital TV consumers might
have second thoughts about buying unseen product online, but will
probably be reassured by the visual evidence and the familiarity of
television presentation. The supplier has to service each of these
consumers equally well.
"It's more likely that somebody buying via TV has alternative
sources on their high street or at an out-of-town shed," says Swan.
"The fundamental way for us to market ourselves is to look after
our customer well so they'll tell their friends and come back to
us."
Unbeatable's first sale via digital TV was of a plasma screen to
a customer in Wales, delivered four hours after the buyer's funds
had cleared.
Swan is convinced digital TV is a natural sales medium and will
enable the company to become intimately acquainted with its
customers in the long run. It is, he says, still too early to be
specific about the impact on business but online sales have risen
from 10% to 25% of the company's direct trade during the last year.
A digital TV presence has also helped to spread sales round the
clock and led to the number of sales agents increasing from four to
18 people.
And there's the rub. The ability to fulfil demand and deliver
adequate back-up services will provide organisations with their
greatest challenge as they embrace the commercial medium of digital
TV. Now, while digital TV is still in its infancy, is the time to
analyse the role it can play in your e-commerce structure, and
where it is appropriate.
Nico Macdonald says as long as companies don't use digital TV to
foist unwanted solutions or inadequate service levels on consumers,
there is cause for optimism. Equally, the infrastructure must be in
place for two-way interactivity rather than just content push. At
the moment, says Macdonald, too much is being expected.
"Digital TV is a solution to a problem no-one has identified,"
he says. "Broadband is seen by broadcasters and media owners as
some great salvation that will allow them to do what they know and
push it out to TVs and computers. In fact, the really interesting
aspect of broadband is that it is 'always on', and the
possibilities this presents have barely been considered."
The answer for now, says Macdonald, is to conduct research. Find
out about your customers and their real lives (that is, how they
perceive and use their televisions) and don't assume that
convergence is about delivering multimedia to a single device.
Make your services inter-compatible. Make sure they make sense
to those who will use them. Test them to check that people can
actually use them. And make sure you have the infrastructure to
deliver and provide broad channels for feedback. Only that way will
hype turn to reality and revenues.
Case Study: The Woolwich
The Woolwich bank is rolling out a digital TV promotion and
application service in the summer as part of its new Open Plan
product delivery programme.
"Our goal is to make becoming a customer of the Woolwich as easy
as possible: all you'll have to do is pick up the remote control,"
says Sarah Dunn, head of digital TV at the Woolwich. The bank is
launching with four functions: bill payments, setting up an
account, statement viewing and transferring money. And because
customers have a unique identifier and PIN number, they can use the
service from anyone's TV set.
The bank has signed an initial deal with Sky Digital, whose five
million subscribers give it the biggest slice of the digital TV
market. However, Dunn points out that Sky's Open Platform system is
highly proprietary and very costly. "All the interface development
has to be done by Sky's staff because it's so specialised," she
explains. There is also a bottleneck for getting the coding done.
Dunn is looking to sign a deal later this year with Telewest which
uses a much simpler HTML-based system.
An obvious limitation of digital TV is the remote control panel
which prohibits the use of complex application forms. The Woolwich
service uses just four buttons on the zapper for navigation. "We
can't do end-to-end fulfillment," acknowledges Dunn, and customers
still have to provide a signature to open an account. To get round
the problem, the Woolwich has integrated the service with its
customer centre, which uses the preliminary data captured by the
digital TV service to send out forms.