The Hindu Business Line : Shopping through the Dish

As a child one wanted to buy a Cadbury’s chocolate bar right when it was being advertised on television. Today with technology advancement, it may actually be possible to do so.

What if you could buy advertised products through your television remote and a direct-to-home (DTH) service provider such as Tata Sky or Dish TV?

Currently there are two ways one can shop from home — either through the Internet or by placing orders for TV-advertised products via post or phone. Channels would sell items that were then bought by calling the numbers displayed on screen and paid for either by VPP or cash on delivery.

However, with TV emerging as the number one source of entertainment and with the emergence of new technology, the next round of integration is just a step away.

Shopping on DTH: How does it work?

DTH encompasses services including pay-per-view, on-demand viewing and interactive features.

These interactive services support the possibility of developing shopping carts for individuals. Based on the kinds of products on sale, one can categorise them into groups such as grocery, personal care, food and beverages, music and books.

The TV remote control can be enabled for use as a tool to navigate and select required products through the interactive screen. A final list of products along with individual prices can be displayed and payments can be effected through credit/ debit card gateways routed through the DTH provider.

Unlike the Internet, secure transaction can be guaranteed as DTH in general is available in encrypted form for every user. Plus, each channel is beamed directly from the satellite to the receptor dish in one’s home. As the signals are strong with clear quality, there is no scope for data loss during transmission of one’s credit card details.

The logic for DTH shopping is similar to that of Internet shopping as far as the merchandise to be sold is concerned. Any item that is standardised – either by brand name such as electronics (Nokia, Sony Ericsson, Apple) or by retail chains themselves such as Reliance Fresh (groceries, personal care items) – can be sold through DTH, provided the service provider gets all the stakeholders into the loop. These include retail outlets, movie theatres, railways, airlines, credit and debit card companies, banks and logistics firms (for product delivery).

However, there are some challenges to be overcome for this model to be implemented. Evident ones include

- Real time interaction and updates – with retail chain inventories, tickets

- Providing encryption for payments

- Delivery and logistics

The best way to mitigate these challenges is to collaborate with organisations already providing these services. For airline tickets companies like Yatra.com or makemytrip.com can be partners. For retail chains, it will lead to sharing of their real time inventory management systems.

What DTH players have to realise is that they do not have to provide any of the physical services themselves. They would merely provide a gateway to these services via the dish.

Win-Win situation

Who is the real beneficiary of these services? Of course, organisations providing the products on sale would benefit, as would banks and credit card companies. But undoubtedly the real beneficiary would be the customer and a DTH provider for who this service would be a new revenue stream.

Customers

Sitting in the comfort of his house a customer can shop, thereby saving valuable time and effort. Also things would be much cheaper when sold through this medium, as retailers would not have to stock items and display them in the retail format. Instead, they would be stocked in a warehouse or in some cases purchased only after the order has been placed. These savings in cost can be passed on to the customer in order them to encourage him to shop on the DTH.

Retail chains

Retail chains can save critical retail space for items that cannot be bought over DTH such a fresh fruits and vegetables or clothes. Additionally, their cost of merchandising is much lower. Customers would pay for the purchase before delivery and hence the retailers can work on the concept of ‘negative working capital’ that will keep their cash flows flexible.

The computer and Internet still have low penetration in India. But television is a medium most consumers are comfortable with. Also the reach of DTH is expected to far exceed that of the Internet coverage in the country. Hence, it would be a better bet to go shopping on the dish for all the stakeholders.

(The former is a senior business consultant at Covansys while the latter is a business consultant at the same firm.)

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