As a fixture of the modern retail environment, in-store programming has proven an effective means for stores wanting to communicate their corporate brand messages to patrons ,as well as alert them to upcoming sales and promotions.
The only drawback for retailers is that most have to rely on inefficient and often expensive distribution methods, such as snail-mailing video tapes to member stores or delivering programming via satellite.
The ITEC Network, a division of Orlando-based ITEC Entertainment Corporation, is offering a service that promises to rid retailers of such technical shortcomings. With the ITEC Network, retailers get a multitude of programming options, and best of all, they don’t need to maintain a phalanx of video machines.
Here’s how the network works: ITEC distributes the programming digitally over telephone lines via the World Wide Web to the retailer. A special box located on-site receives the content, stores it locally, then broadcasts it through monitors situated throughout the store. The receiver box, called the MV2, is the key to the whole system, says Daniel West, VP of business development at ITEC Networks. Though many people argue that you need high bandwidth in order to broadcast over the Web, says West, that’s only true if you’re using a TV or a standard PC to receive the information. ITEC’s investment in developing superior receiving technology has enabled it to get around the deficiencies of using low bandwidth telephone lines.
The Network puts many programming capabilities at the retailer’s fingertips. ITEC can distribute one kind of programming to all of its stores or tailor content to suit an individual store’s particular customer demographics. ‘One of our retail clients has stores located in North America, Guam, Japan and Puerto Rico. In that case, we program the network so that each location gets broadcasts that are unique to their consumer base,’ says West.
The Network also has multichannel applications for each location, allowing ITEC to pump in several different kinds of content that are specific to store departments, like children’s apparel or toys, for example.
The cost of the ITEC Network begins at US$199 per store, which entitles a retailer to all the in-store hardware, digital encoding, some basic programming from ITEC and client libraries, delivery of media and customer support.
The kind of programming used on the Network is left entirely to the clients’ discretion. Some retailers, says West, use content to promote their brands and store promotions exclusively, while others sell time to vendors wishing to advertise their products on the network. One of the system’s stronger selling points is its potential to pay for itself. As part of the monthly service cost, ITEC manages ad sales for its clients, who in turn receive a percentage of those profits. ‘We use those dollars not only to offset the cost of our service, but where the ad dollars go above the cost, then that money is rebated back to the retailer. In most cases, retailers won’t be out of pocket to cover the service, unless they don’t want to run advertising,’ says West.
Beyond providing an additional revenue stream for retailers, West also believes the network has potential kiosk applications, which could alleviate retailer concerns about e-commerce encroaching on or cannibalizing their traditional business.
‘Using the network in a kiosk format allows retailers to leverage their bricks-and-mortar business by driving eyeballs to their Web site, or it can act as an extension of their Web business for in-store fulfillment and customer support,’ says West.
Since ITEC introduced the current iteration of its network eight months ago, it has caught the attention of several retailers, including sports apparel (Venator’s Foot Locker), toy (Disney Stores) and cosmetics chains (Sephora). West expects the company to increase its number of retail clients from six to 12 within the next year.
For more on kiosks see The Cyber Space, page 40