INTERVIEW Home Run Shop At Home's Kent Lillie and Wayne Lambert explain how their company brings electronic commerce into your living room. When you think of the top television-broadcast companies, you might not necessarily include the myriad shopping channels, with their Beanie Baby deals, on your list. But with six full-powered television stations and 52 million households in its cable network, Shop At Home is among the top 20 broadcast companies in the United States. Shop At Home recently teamed with Oracle to enhance its digital broadcast infrastructure, streamline its back-office operations, and launch collectibles.com, the premier online community for collectibles shopping and information. With these moves, Shop At Home's new business model integrates a strong television presence with Web technology to deliver an entertaining interactive-shopping experience. Kent Lillie, president and CEO of Shop At Home, and Wayne Lambert, chief technology officer, recently spoke to Profit about the compelling new sales model of electronic business. Profit: How does Shop At Home take advantage of traditional electronic-commerce methods, and what new business model are you using to advance those methods? Kent Lillie: We sell goods directly to consumers and businesses via an electronic picture. In that sense, we've been running an e-commerce business for years. Looking ahead, we believe that the future of e-commerce is delivery through a converged medium. As broadband gains market share and the internet delivers more video, PCs and TVs will merge into a single and much more powerful device.      We're one of only four nationally distributed companies that sell merchandise by video, and we're remaking our company to support this converged platform. Last September we moved into a new, fully digital broadcast facility in Nashville. We turned to Oracle to rebuild all of our existing technology platforms. Profit: What are some of the goals for this new venture? Lillie: The demand for our network broadcast signal is growing rapidly. We needed expanded technology to better support that growth and to provide fresh, on-demand information to our customers. Our goal is to improve the quality of service for our customers by providing a faster, enhanced transaction. By streaming our content over a digital video signal, we can distribute it over the traditional broadcast network as well as over the Web. Profit: Do you expect that the Web will give you an edge in the collectibles market? Lillie: Yes. The Web is a perfect medium for collectibles, because it tends to attract and retain niche communities. We all collect something—be it wine, cuff links, fountain pens, dolls, jewelry, or something else. Collectors are fanatical about their collections, which makes them a very loyal group of customers. And the Web allows those collectors to locate hard-to-find pieces.     We intend to be a place where virtually anything that can be collected can be found—a fully transactional site with enough content to offer a compelling shopping experience. As part of that experience, we are offering chat rooms, price guides, information on collectibles, and even collectibles shows. We will also offer services to help collectors locate hard-to-find items through companion sites. Profit: How will Oracle help deliver this Web vision? Lillie: Oracle software drives every part of our business. Oracle is supplying the technology on the video side as well as the infrastructure for creating the applications on the Web. And Oracle Applications will automate our back-office functions such as accounting, ordering, and inventory.     Previously, we lacked cohesion between the customer-facing functions of our enterprise and the processes that take place behind the scenes. We feel we're now better equipped than ever before to optimize every interaction a customer has with our company, whatever the point of contact or method of communicating with us. For example, the new system makes financial and order-entry data instantly accessible to sales-center reps. The efficiencies inherent in that scenario are obvious. Wayne Lambert: The real beneficiaries are our customers. We want to make it easier for them to do business with us. That means giving them several complementary channels to use to reach us—via the Web, by phone, or by an intelligent voice response system.     No matter how a customer contacts us, the order process will be handled through Oracle Applications and we will process the transactions in a uniform way. That continuity will give us much more control internally and provide the customer with a more consistent and dependable experience.     For example, our systems can handle a credit-card order made online via the Web in much the same way they handle a credit-card order by phone. The idea is to have one uniform set of information systems. Profit: How do you plan to nurture your strength in real-time video? Lambert: One of our directives is to leverage the broadcast systems on the back end to manage uniform content storage and delivery to multiple channels. As we go into the retransmission of real-time video on our Web site, we will show products simultaneously on home television and computer screens. Customers can purchase products via the Web; with a toll-free phone call; and, eventually, through interactive television.     On the internet side, customers can scroll through our database and pull down the products they want to see. We make digital images of virtually every product, which a customer can replay on demand. As the interactive-television medium matures, this replay could happen either over cable TV or over the Web. It all springs from an Oracle platform. Profit: What is the flow of a typical sales order in this model? Lillie: The bulk of our goods are housed and owned by our vendors. The customer calls in; we reserve the purchase on the customer's credit card; and then, in real time, we electronically transfer that customer-order and shipping information to our vendor. The vendor picks, packs, and ships the products and then notifies us through Oracle Web Suppliers. We then post the shipment and charge the customer's credit card through Oracle Fulfillment. Profit: Does this mean you don't have to carry any inventory? Lillie: Very little. Approximately 80 percent of our transactions occur in this way. Profit: How is Oracle Consulting helping you with these efforts? Lillie: Oracle Consulting is spearheading the project, implementing the Oracle Applications and helping with training. The Oracle team reports to a steering committee in our organization, but Oracle is doing the actual development of the systems. Profit: How far along are you in reaching your goals, and what challenges do you still face? Lillie: The obstacles are planning enough management time to consult with Oracle on how we want them to shape the system, given that we're already in a 24x7 business. The entire project should be complete by January 2000.     We'll do the rollout in phases. Phase 1 includes Oracle Financials, and we hope to be live on our new financial system at the start of our fiscal year, on July 1. Phase 2 will involve the deployment of order-entry and customer-care applications and should be complete by this August.     Phase 3, scheduled to be implemented by January 2000, will include the deployment and integration of our sales-center applications. We also plan to have our new collectibles.com Web site fully functional by this fall, the rollout of which will include some of the Oracle Video Server applications. Profit: Will the telecommunications infrastructure be ready for the kind of content you plan to offer? Lillie: As far as widespread distribution of broadband for consumers is concerned, I think we're still two or three years away from having a large enough critical mass to support extensive video on demand. But we'll gradually move in that direction.     It's a two-way street: As the telecom infrastructure becomes more robust and able to handle these kinds of services, we will be developing a critical mass of users who would be interested in those services. The more content, the faster it drives users; the more users, the faster businesses will develop content. Profit: What's the long-term vision for these technologies? Lillie: Ultimately, we believe, nearly all e-commerce will be done with video on demand. Combine that with user profiling and personalization technologies, and you can essentially offer a personalized video feed. We will be able to offer an individual network for each viewer that gradually learns your preferences and interests. When you log on, the system has a good idea of the type of content you might want to see. Profit: Are you working with Oracle partners on the project? Lambert: iXL is helping with the Web development, including site navigation. iXL is also involved in creating and assembling the content with respect to a chat room and search engines. Oracle Consulting is working with iXL and bringing some of the Oracle development technologies to bear on the Web-site project. Profit: What were the primary considerations when selecting technology suppliers for the project? Lillie: Our technical people believe that Oracle has superior products. Oracle's success in internet technology was a key factor. And Oracle has excellent broadcast-video technology as well. Lambert: As we evaluated our business and technology needs, we could see that Oracle was a market leader, especially in the areas of e-commerce, ERP, and customer care. And Oracle's approach to the Web is comprehensive: The internet defines Oracle's strategy and approach to the market, just as it defines our own. There seems to be a lot of synergy between our two companies. David Baum (dwbaum@silcom.com) is an Oracle Publishing contributing editor based in Santa Barbara, California.