Redgate Communications Corp. and Italy's Olivetti Telecom Multimedia formed a joint venture to develop an in-store network that could make computers more productive as sales tools. The joint venture, Redgate Olivetti Communications, will start a 1-month test of the network in September in five Paris stores.
The system, called InStoreNet, lets customers learn about computer hardware and software on their own. And participating marketers can learn about their customers, via a database collection system that tracks how many people logged on, and for how long.
Marketers involved in the test include IBM Corp.'s European PC division, Apple Computer and Olivetti. Participating software marketers include Claris Corp., Voyager and possibly Microsoft Corp., said Anthony Khan, Redgate's VP-European business development.
Paris retailers CORA, a supermarket chain that also carries electronics and computers, and Boulanger, an electronics and appliance retailer, will test the system. The plan calls for 100 stores to be online by October, Mr. Khan said.
"It's the absolute simplest of ideas," he said. "We want to use a bunch of dead screens to create a very targeted television network."
The European market is ideal for such a test. Europe lags about five years behind the U.S. in computer penetration; only 8% of French households have computers, for example, compared with one-third of U.S. households.
Part of the problem has been that many store sales clerks are untrained on the various computer systems. And when a problem arises, customers often walk out of the store.
By linking all computers in each store to a local area network, the system will explain applications from the hardware and software marketers' point of view, essentially letting customers teach themselves about a given product, Mr. Khan said. The system is set up to handle competing hardware and software platforms on the same server.
An animated character helps consumers learn about the products. Marketers will pay according to actual viewer usage, plus an upfront fee.
There are some drawbacks. Retailers may be reluctant to participate if it means losing control of their customer database, warned Bruce Fredrickson, president of Channel Tactics, a Sacramento, Calif.-based computer retailing consultancy.
"If they can't measure significant impact, I don't care how good the system is, they're not going to do it," Mr. Fredrickson said.
Assuming the software operates without the glitches common in networks, that the technical support exists to back up the system and that marketers would be willing to pay start-up and ad costs in a field of increasingly tight margins, then it's an "exciting" concept that could make the transition across the Atlantic to help sales in the U.S., he added.
The system's ability to offer specific data to marketers will be its key selling attribute, said Redgate Chairman-CEO Ted Leonsis, whose Vero Beach, Fla.-based company owns 49% of the venture, with Olivetti holding the rest.
Once the network is up and running, it could move outside the retail environment to online services or cable systems.
"To an advertiser, there's no risk there," said Mr. Leonsis. "And to consumers, it's not advertising. It's training."