INTERNET DEVELOPMENT AND UTILIZATION
Executive overview for Harrods
Risto Linturi, HTC Fellow
R. Linturi Oy
t. +358 50 511 4332
f. +358 9 6841 4146
Technology fundamentals
Internet is technologically a network of networks. This means that any existing network can be connected to internet if suitable protocols are used and an agreement is made with the owner of the “connection point” used. A corporate computer network for example can be connected to internet. The connection can be made so that outsiders can freely enter the corporate network and it becomes a part of internet. Outsiders can also be left out and corporate network is then called an intranet. If selected users from outside are allowed to use selected resources of the corporate net through internet then the solution is called extranet. Various technical solutions are available for these uses.
The basic internet protocol is called “internet protocol” IP and most common variation is TCP/IP. This protocol is quite old but it cannot easily be changed because all devices connected to internet should be able to communicate with each other and IP is the language they use for getting contact with each other.
IP provides for machine level communication between different devices. There are other protocols and standards which define text content, pictures, audio, video, cartoons or even three dimensional worlds and moving figures. All these require special software in each users computer. Internet is a very dynamic communications environment and all development above IP-layer happens very fast. All the above mentioned extensions can be freely loaded from internet and most are included with the purchase of new computers.
Currently most users can exchange email with each other and they can also view and search web-pages which include text, pictures and links to other pages. Already big and quickly increasing number of users can also view video content, listen to radio stations and chat with each other either with text messages or voice. Video telephony, viewing of animated 3D worlds and using internet for telephony is still in its early stages but the standards have already been set and user base and content is growing exponentially.
Most users have the capability to use small programs provided by web-pages. This allows anyone to create new applications and share them with other internet users very efficiently and with almost no noticeable delay to the user. These applications can handle different entry forms, simple games, tax calculations or information retrieval from databases.
Standards for electronic commerce vary from country to country. Credit cards can be used in some countries, electronic bank transfers in others. Digital cash is being developed by several parties and regulationary network is under preparation. Payments can also be handled by large stores from their trusted user limits or operators can arrange small payments to be added to users phonebill. All conventional payment methods can also be utilized. Electronic commerce does not need to mean that everything is electronic. Best current example is Amazon bookstore which sells via internet but delivers and charges in conventional methods. Market share has grown from zero to considerable in very short time but business is not yet profitable.
How should internet be viewed?
It is very important to select correct metaphor for internet. One can view internet as a media. This leads to comparisons between internet advertizing and advertizing in other media. But in internet an advertizer can set up his own home page. In internet the users also pay for viewing the corporate web-pages. These are not included when calculating market shares for internet advertizing.
My basic recommendation is to consider internet as a place - not as a media. This leads to much better analogy between things done in internet and things done in the physical world. All users wander around internet - they can go to places where they find information but they can also meet and chat with friends or shopkeepers. In some sence internet resembles window shopping.
When one consideres the place-metaphor as a basis for corporate web-site it leads to very different thinking compared to the media-metaphor. The most crucial thing in a corporate web-site is how to get the user to revisit the pages as often as possible. In media-metaphor this is done by changing the pages very frequently and perhaps giving registered customers a notification when the pages have changed. Entry pages are modelled following newspapers front page giving priority to news and secondary place to fixed content.
Place-metaphor leads thoughts to providing good service, social contacts, entertainment or other pleasurable experience. Web-sites seldom do this.
Good service means various things. It can mean that I can get service faster or without travel, I can get cheaper rates if I use less resources, or I can find things easier. It is not good service if I cannot ask for personal advice, or if I have to fill complicated forms, or if I cannot get any good idea of the products or services that are available. It is not good service if it does not feel nice.
Social contacts are very important in physical places. People meet others and get aquinted. They come back again and again because they have befriended others. These social contacts and enjoyable atmosphere can be created in corporate web-sites. A web-site can be considered as a virtual party where best customers are invited. There might be music, games, and other entertainment and discussion groups and naturally now and then also product demonstrations including fashion shows. Other metaphor is a virtual shop where one could view products, get contact with others interested in similar things. Shop assistants should be available so that questions and assistance could be asked. Atmosphere should be suitable for the target group. Purchases should be as easy as possible and payment methods and delivery methods versatile. In the beginning there should not be too much consideration for automating everything. This can come later when market share begins to grow. This is impartant also when considering payment methods and integration to the existing edp-system. Total integration from the first moment leads often to lousy customer experience.
Internet is a networked environment. Rumors spread very fast when something really hits the spot. Good existing brand can be easily destroyed and new brands can grow up very fast. Behaviour patterns are very adaptable and people can easily switch their former suppliers when moving to internet-buying. Internet users are relatively interested in high tech. This is especially true to those users that are the opinion leaders. This means that if a corporate web site gives particularly good and useful service or it is technologically advanced then rumor spreads very fast and quite soon “everybody” knows about it.
What are the possibilities?
Internet is in quick development. Current trend of telecom vendors such as Nokia, Ericsson and Siemens is that they expect telephony and mobile telephony to transfer over to internet during next five or ten years. Telecom operators are more conservative but they change their views as they did when the mobile explosion came. It may happen that the old telephone network is completely integrated or replaced by internet within ten years. Naturally the existing copper lines are used, they can provide TV-quality picture in both directions if telephone operators or other ISP (Internet Service Providers) choose to supply such services in large volumes to drive down the unit price.
A corporate site has to be developed taking into consideration users access possibilities. If user speeds are moderate services have to take that into account. Current modem speeds are however satisfactory for low quality video, moderate voice quality, still and panoramic pictures and naturally text. Good quality video can easily be used in corporate intranet but outside users have to satisfy themselves with the quality that local telecoms provide.
After the operator has made investment decisions setting up a video quality internet service all over London takes two years whereafter the customer base starts to grow exponentially. In Helsinki a mass market solution for tv-quality internet access is promised for 1999. Currently the network covers 15% of Helsinki Telephone Corporations operating area. ISDN with its video conferencing quality speeds covers 100% and cheapest video conferencing equipment costs 100 pounds. ISDN service costs only 50 pounds to install and monthly fee is 12 pounds. ISDN calls and internet access are very cheap. In England the situation differs but the difference may be very temporary.
In Finland there are 2.6 million mobiles for 5 million citizens. There are 1.6 million internet users and number of emails has long since exeeded the number of paper mail. Mobile phones and internet have integrated in various ways. Mobiles are currently used for paying for car wash, for opening doors, for paying coke automates etc. Internet emails are also routed to mobile phones.
The speed of change cannot easily be overestimated. Three years ago Finland was not so advanced in these matters. One year ago it was still officially considered that 30% mobile penetration will be saturation point. Now the official estimate is that there is no saturation point ant that we cross over 100% within three years. It is widely believed (also within Nokia and Ericsson) that mobiles will have video and internet and electronic payment facilities very soon. It is also believed that the scandinavian advantage is only temporary and that other countries will soon catch up.
What are the recommendations?
Internal usage:
There should be a very determined strategy for (slowly but surely) moving all widely used internal applications over to internet platforms so that all employees would use internal applications through web-browsers. All employees should also have email addresses (if that is not yet the case) and email should be encouraged instead of paper and phone. Group mailing lists, reports delivered over email or reports browsable from the web should begin transformation of the internal communications culture. People should be reachable independent of time and place to enable efficient interchange of expertize and creativity. This reachability should be extended to customers so that they could start using suitable “internal” applications and reach suitable employees over internet.
Customer information services:
Web pages should be created that give users catalogue information from products that they would wish to buy. This information should basically come from corporate data bases but fancy multimedially decorated catalogues (sound, moving images etc.) should be available with a planned regularly changing content. Notification from the new edition should be supplied to the registered customers which should receive bonus for accepting advertizement.
Information on Harrods itself should be easily available. This information should include travel guidance with photogpaphs, maps, video and 3D-models on how to get to Harrods and how to find various departments when inside. This information should be accompanied by easy internet telephony connections for those who wish to ask for additional information but should not be bothered to close their connection, write the number onto paper and dial it anew.
Harrods could very easily get a modern and very service oriented image in the web if video telephony information booth would be available. These kinds of services cost very little to provide but they create an image of personal service and a willfulness to give good service. It is all too common in internet that people just are not available. Many companies neglegt their internet-users in spite of the fact that this is very much against the “internet-culture”.
Internet commerce
My recommendation is to first put emphasis on service over internet and internal usage. Full featured and completely integrated internet commerce can really be developed only after these issues have been properly handled. It is also advisable to study various businesses which already sell quite much through internet that have not yet solved payment methods through internet.
Electronic cash and other internet payment methods will become very popular within a few years. Electronic signatures, autenthication and other methods necessary in commerce will be solved by equipment manufacturers, software manufacturers, teleoperators, banks and governments and they will be included in mass market hardware and software. In the meantime businesses should concentrate in those issues that are readily applicable. Naturally tests and piloting for electronic payment should be started as soon as it seem reasonable. Local banks and teleoperators can be suitable partners in providing solutions.
Electronic payment is most crucial when selling immaterial things. Music can already be delivered over internet in CD-quality. All copyright issues are not solved yet but they will be. Other services besides music are also deliverable over internet and electronic payment connected with automatic delivery could undercut many old distribution methods. The change will be fast when it starts.
Virtual parties for customers
It is quite easy with current methods to create web-sites in internet where people meet and chat with each other. These sites can supply background music, videos, animations and other enjoyment such as games. My initial recommendation is that Harrods should set up this kind of virtual clubs which should be designed to please Harrods target groups. These should show advertisements, fashion shows and other enjoyable sales material but emphasis should be in giving visitors a social experience so that they would come and visit again and also recommend the experience to others. This site should have very easily available links directing the user to Harrods other pages.
Backgrounder for Risto Linturi
Risto Linturi has been developing networked micro-computer systems and concepts since 1978. He is first Fellow of Helsinki Telephone Corp. and also a member of the Finnish National Information Society Group, member of UNESCO Inforights committee and Australian government invited Virtual Opportunity Group. He has recently written a report for the finnish government on future information society scenarios and another book on the same subject for the commercial market. He is initiator for Helsinki Arena 2000-project which is considered to be the most ambitious virtual city-project all over the world. He has consulted a large number of corporations and agencies on various issues including legislation, commerce, education, communications technology, software engineering, house automation, creativity and futurology.