Without much advance fanfare, digital-cable customers in Lexington, Ky., last month saw a new application appear on their set-top boxes: a remote-controlled home-shopping service called the Insight Digital Mall.
Through a partnership with Commerce.TV Corp. and Liberate Technologies, Insight Communications Co. soft-launched the television-commerce application last month, after beta testing by local Insight employees.
All 25,000 Insight digital customers in Lexington have access to the technology, but cable subscribers must register their credit card numbers to set up an account. Insight plans this month to send out a postcard promoting a discounted CD to all customers who complete the registration process.
As with online shopping, there's probably a base of early adopters who will gravitate easily to t-commerce, said Insight vice president of customer development Alex Crowley.
Other consumers tend to play around with t-commerce before they make their first purchase. On the Insight Digital Mall, a "favorites" feature lets viewers collect products they're interested in, then return later when they're more comfortable with registering their credit card information.
"There's a lot of that being done now," Crowley noted.
A third group of cable customers may not be interested in t-commerce at all, at least in the near term, Crowley admitted.
Insight will look for ways to differentiate between the three groups and determine which marketing messages to send to each.
The $1.99 CD offer could appeal to a wide base of customers for two reasons. For one, "everybody likes music," Crowley said. And shoppers tend to be more comfortable buying books and CDs online rather than clothing or other items that they want to touch and feel.
Getting customers comfortable with the t-commerce service could go a long way toward helping Insight derive additional revenue from its digital platform.
"It's a volume-based business," senior vice president of marketing and programming Pam Euler Halling said.
She added that it's important for the site to update its product mix on a regular basis to encourage repeat visits.
Along with the discounted CD offer, the Insight Digital Mall is running a Home Box Office upgrade campaign tied to the miniseries Band of Brothers. Through an onscreen menu, digital cable subscribers can upgrade to HBO at the touch of their remote control.
Down the road, customers will be able to order other Insight services directly through the Digital Mall, such as high-speed data or the telephone service set to launch in Lexington later this year.
According to Crowley, about 1.5 million SKUs (stock-keeping units) of merchandise are available through Commerce.TV, although Insight hopes the interactive shopping company will sign deals with more top national merchandisers.
The Insight Digital Mall may also add local or regional stores in the future. The operator's local ad sales group is discussing such partnerships with key clients.
Unlike the current arrangement with Commerce.TV, orders for the local stores' products would not be fulfilled directly by Commerce.TV, but through the hometown retailer itself. The Insight t-commerce service could connect directly with the mom-and-pop stores' existing ordering system, whether it's a Web site or a fax machine, Crowley said.
"The Holy Grail [of local t-commerce] is pizza," Crowley said. "We're all salivating at the possibilities."
It's too early in the service rollout to project what kind of consumer usage the Digital Mall will see, Crowley said.
Halling said she's curious to see whether the interactive commerce site will impact traditional home shopping networks like QVC and HSN.
"I don't anticipate it will," Halling said. "I think it will be incremental."
Insight is not the first cable operator to deploy Commerce.TV. Pennsylvania-based Susquehanna Communications Corp. has already launched the service — dubbed SusCom Mall — and Adelphia Communications Corp. earlier this year announced plans to add the t-commerce service to its digital-cable lineup by the end of this year.
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