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Study: Europeans Ignore Potential of TV-Based Commerce

By Nora Macaluso
Jan 18, 2002 10:39 AM PT

Retailers in Europe are not taking advantage of a growing market for television-based commerce, according to a report released Friday by Gartner (NYSE: IT).

Study: Europeans Ignore Potential of TV-Based Commerce

Though 35 percent of digital television subscribers in the United Kingdom alone have interactive TV, most either are unaware the service is included in their bills or have not taken the trouble to learn how to use it, according to a survey by Gartner's G2 division.

The reason, according to Gartner G2 analyst Davnet Cassidy, is that retailers "have not linked their interactive TV presence to TV programming." The television companies are also at fault, as they are not doing all they can to raise awareness of the service, the report said.

In the Know?

The survey found that 50 percent of British and 75 percent of French adults who have interactive TV do not realize they can use their TV remote controls to buy products. Of the UK consumers who did know about the service, 35 percent said they had not used it and were not interested. More than 40 percent said they had not figured out how the devices work.

The 6 percent of subscribers who had made purchases via their TVs bought mainly inexpensive items linked to "the immediate TV viewing experience," such as pizza, the study found.

Target Practice

"Retailers urgently need to move away from the 'build it and they will come' attitude and work hard to focus on a clearly defined sales proposition for a defined target audience," said Cassidy.

Retailers could, for example, sponsor TV shows to raise awareness, the report said. They also could take advantage of interactive TV to market their products to consumers who do not use the PC Internet -- typically less-educated, blue-collar workers with average incomes, Gartner said.

Interactive TV also provides retailers with an opportunity to draw attention to themselves using interactive ads, said Gartner. "TV viewing relaxes people and makes them receptive to new ideas," the report said, advising retailers to take advantage of that fact.

Share the Blame

Digital TV operators also could do more to raise awareness, according to the report. "Operators should get creative and use the medium itself to educate customers on how to use these services," Gartner said.

For example, the report said, TV installers could be trained to show customers how to use the service. Offering "compelling and useful content" like games and information services, while not necessarily generating revenue, would lead consumers to turn to their TVs for interactive services, the report said.

Still, Europe is ahead of the United States in making interactive TV available to consumers. Gartner does not expect Internet-ready set-top boxes to be up and running for Americans until 2005. By then, the firm said, consumers will be receptive to purchasing items over a variety of non-PC devices.

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