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.
By submitting your email address, you agree to receive emails regarding relevant topic offers from TechTarget and its partners. You can withdraw your consent at any time. Contact TechTarget at 275 Grove Street, Newton, MA.
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.