Home Shopping Comes of Age1 Jun, 2013 By: Bridget McCrea Response
By leveraging their huge customer databases, integrating Web 2.0 technologies, and forging marketing partnerships with outside firms, today’s home shopping channels are breaking out of the “sell-a-vision” mold and paving their own success paths.
The fact that most of its sales are final and that prices displayed on TV don’t typically include shipping and handling charges hasn’t stopped Austin, Texas-based The Liquidation Channel from attracting a healthy following of jewelry buyers who are in search of good-looking pieces at bargain-basement prices. Some buy directly from TV, while others take to the Web in search of rare and/or exotic gemstones that range in price from just a few dollars to upwards of $30,000. To round out its offerings, the firm also sells scarves, clutches, watches and hairclips that its buyers use to accent their looks.
Boasting “up to 80 percent off retail,” the Liquidation Channel’s recent offerings include Tahitian pearl earrings for $59.95 (on-air price), an artisan crafted bracelet for $79.99, and a stainless steel snake chain offered at a starting bid price of $8. As the entity that succeeded The Jewelry Channel, the new iteration “emphasizes value,” says Gerald Tempton, president, “and products that are priced either at or below wholesale.”
By following in the footsteps of big home shopping guns like HSN, QVC and Shop-NBC, The Liquidation Channel has be able to gain footing in a direct-to-consumer category whose profile has morphed significantly during the past decade. Once largely focused on selling big lots of products at very low prices and in the shortest timeframe possible, today’s home shopping players appear to be more focused on cultivating long-term relationships with the huge databases of customers that they’ve amassed over the years.
Well positioned to take advantage of technology, the home shopping channels are ahead of the curve when it comes to Web 2.0 options like social networking, online video and mobile marketing. Credit the fact that most consumers are equipped with “second screens” while they watch celebrity hosts and models parade their goods across the stage (or, through the kitchen) with stoking some of that innovation.
“Consumers are buying off TV, via the Web, and on their mobile phones — and there are definitely some synergies between the three,” says Tempton, who credits those synergies will helping to drive a good portion of The Liquidation Channel’s growth during the past five years. “Technology touches everything we do, from fine-tuning our website to making it consumer friendly, along with upgrading our warehouse management systems to ensure timely and accurate deliveries.”
Continual Honing and Refining
At QVC in West Chester, Pa., Doug Rose, senior vice president of programming and marketing, says that the retail industry as a whole is seeing continuous growth in E-commerce, mobile and social. “Consumers want to be able to engage with their favorite brands when and where they choose,” says Rose, “and how they interact may differ depending on what they’re doing in the moment and what devices they are using.” In alignment with this trend, Rose says QVC has seen continuous growth in its E-commerce and mobile businesses.
“We see social media becoming more and more influential in retail today,” says Rose, who adds that, in many ways, QVC was a “social” business before the advent of social networks. “We have always worked to connect the creators, inventors, and experts with our customers and we have continued to refine and develop our approach with integrating social media into our broadcast.”
Take QVC’s “In the Kitchen with David,” for example, which features the company’s long-time program host David Venable. Using an iPad app, customers can interact with the show and “shape” the content in real-time. “The show has become interactive, destination programming that competes head-to-head with top food programming on national TV,” Rose explains, “and promotes deep engagement with viewers.”
In addition to investing in technology and leveraging interactive programming strategies, QVC is also expanding its international reach. Through its broadcast operations in Japan (where it opened a new headquarters location in April), Germany, the United Kingdom, Italy, and a joint venture in China, QVC now reaches approximately 250 million homes worldwide.
In assessing the different product categories that are “hot” right now, Rose points to the beauty category — where QVC leverages brands like Philosophy, bareMinerals, tarte and Wen — as particularly active. “In global markets like Germany and the U.K., we have channels dedicated entirely to beauty,” Rose points out. “In the U.K., a live stream of QVC Beauty is also available online, tailoring the multiplatform experience to the beauty business.”
Rose says the changing technology landscape has created challenges for home shopping channels. “Our customers tend to be early adopters of new technologies, so it is important for us as a business to remain focused on what’s next on the horizon and continue to provide the same great customer experience wherever and however they choose to shop with us,” says Rose, who adds that social commerce and global growth will remain two key priorities for the company through the rest of the year.
Rolling With the Changes
HSN in St. Petersburg, Fla., has been through a few changes of its own in the past few years, not the least of which was a complete redesign of its website earlier this year. Bill Brand, chief marketing and business development officer for HSNi (HSN’s parent company), says the massive undertaking wrapped up in January and resulted in a newer, updated and more engaging Web experience for customers who do everything from shop to conduct research to play video games on the site. “It was huge, but we’re happy with it,” says Brand. “We’re continuing to improve the website; it won’t stagnate.”
Brand says one of HSN’s biggest, ongoing challenges is keeping current customers satisfied and engaged while attracting new ones. Just like its underlying industry continues to morph and adapt, HSN itself has started working with outside agencies like BrandAsset Consulting, Razorfish and Deutsch to hone its points of differentiation and build more brand awareness. The company has also formed relationships with big names like Disney, Coca-Cola and HGTV HOME Outdoor TV, the latter of which has resulted in a fruitful, long-term alliance.
Rolled out in early 2013, the multi-year, cross-brand initiative encompasses TV selling, original digital content and HGTV personalities who appear on the shopping network to pitch products from plants to lighting to garden tools. “We’ve always had a strong lawn and garden business,” says Brand, “but put it under HGTV’s umbrella and create experiences that customers can’t get anywhere else, and we can up our content experience in categories that we’re already dominant in.”
Tapping the Data Goldmine
Michael Kokernak, president at Across Platforms Inc., in Boston, says those home shopping channels that have persevered are now sitting on data goldmines. Unlike the traditional retail environment, where a customer can pay for an order without relinquishing any personal data about him or herself, home shopping all but requires some form of registration. With that information in hand — even if it’s just a name, E-mail address and physical address — shopping channels can data-mine, segment and target to their heart’s content.
“Networks like HSN and QVC have relationships with their customers that, in some cases, span multiple decades,” says Kokernak, who adds that the viral aspect of such long-term alliances typically generates even more business for those channels that provide excellent customer service and product value/quality. “People buy from the home shopping channels and then — using traditional means or social networking sites — tell their friends about the experience. That winds up bringing even more people into the shopping channel’s social circles.”
Those cozy, long-term relationships set home shopping apart from their DRTV marketer counterparts (unless, of course, the latter are selling via HSN, QVC or another home shopping venue). “No one else in the DR space has been able to capitalize on those ongoing customer relationships,” says Kokernak. “The home shopping channels have learned how to reinforce those social/buying relationships that they have with their customers.”
Adopting a More Strategic Approach
The fact that home shopping has moved well beyond peddling single units and hoping for sellouts is a double-edge sword for veteran direct marketers like Tony Little, a.k.a. “America’s Personal Trainer.” Based in Tampa, Little has been working with HSN and The Shopping Channel (TSC) in Canada for decades. His products include a line of Body By Bison food products, Cheeks exercise sandals, and the venerable Gazelle exercise machine (see Field Reports, page 8).
Sometimes, fulfilling the home shopping channels’ insatiable appetite for in-demand products is strenuous for marketers like Little. “It’s harder for me to keep up because of the strong demand and the need for product diversification,” he explains. Where 10 years ago it may have been enough to make a few live appearances to sell out a shipment of exercise machines, for example, Little has had to become a strategic planner — all the while keeping a close eye on his own production and marketing.
“I have to make sure all of the I’s are dotted and T’s are crossed; it’s my name that’s on the products and equipment,” says Little, whose product campaigns are typically planned out as far as four-to-six months in advance. At press time, he had just returned from a one-year branding summit with HSN, which brought in its chief merchandising officer and vice president of brand marketing for the pow-wow. “We presented all of our brand products and strategies for the coming year,” says Little. “That was something new; we’d never done that before.”
The Shopping Channel has taken a similar approach by involving selected vendors in two-year branding summits. “Right after the HSN summit,” says Little, “TSC called up and said they wanted to lock me in for two years.”
Between the two venues, Little says he’s been able to show the variety and scope of his firm’s lifestyle concepts and present its new footwear products and related accessories. “It’s a great branding strategy for us,” says Little, “and a very productive way of handling business with the shopping channels.”
From his vantage point as a marketer who has done a stellar job of leveraging home shopping, Little says companies that focus on building brands, delivering quality goods and services, and partnering with the channels themselves to round out the customer experience, tend to do best in the category. Marketers looking for the “quick hit,” on the other hand, tend to move in and out of the home shopping space quickly (and not always profitably).
Looking ahead, Brand paints a positive picture for the future of home shopping as a whole, but points out that the big winners in the space will be those that create “unique and ownable experiences” for their customers. To get there, he says HSN plans to continue leveraging technology, expertise, big data and other tools that keep consumers “engaged and excited. That’s what we’re really going to be focused on going forward.”
Tempton is also bullish on the home shopping industry’s prospects through 2013 and into next year. “The outlook is very strong,” he says. “The bottom line is that the economy is still not as strong as we’d like it to be, and customers want the best value for their money. When you can offer that up across various buying platforms — and then deliver the goods right to your customer’s door — he or she will appreciate it and come back for more.” ■