UK: Iceland comes face to face with shoppers, using ISeeTV

Frozen food retailer Iceland will be setting a precedent today, as it announces its plans to establish a home shopping service which enables consumers to order food through ISeeTV. The trial, in which 100,000 consumers will take part, will begin during the next two months.This technology has been developed in Hampshire by Media Logic, which has invested £5m over the last four years in enabling people to see each other through a normal television screen. The company anticipates that licensing revenue will reach £60m by 2002. The scheme, also used by the travel operator First Choice, requires a telephone, a TV and a cable connection. Manufacturers believe the package is very user-friendly and hope to reduce the number of mid-transaction dropouts that typify Internet sales.This announcement comes just three months after compatriot food retailer Somerfield abandoned its home shopping business because it was making such heavy losses, but Iceland bosses have faith in their system. The Director of Home Services, John Grey, explained that the Iceland scheme was breaking even because it used products taken directly from the shelves, not from standalone depots: "Somerfield didn't get the volume because they were playing catch-up. We were the first to go national on the Internet." It is through e-commerce that Iceland has augmented its market share, which has been limited because the chain controls only 750 small outlets.