Mobilizing the Home Shopping Space1 Jun, 2014 By: Bridget McCrea Response
Home shopping networks ramp up their efforts in the mobile space as supporting companies jump into the fray with new options for cashing in on digital trends.
With people spending more time watching their mobile devices these days, it makes sense for the home shopping industry to start putting additional effort into selling via the “small screen.” No longer relegated to their couches and armchairs when viewing the latest-and-greatest home shopping products, American consumers are spending 151 minutes every day on their smartphones versus the 147 minutes that they spend watching TV, according to a recent AdReaction study. Outside of the U.S., mobile is gaining even more traction, as AdReaction reports Chinese consumers spending 170 minutes per day on their mobile devices.
The home shopping industry is taking this shift in consumers’ eyeballs seriously. “Mobile is by far the biggest trend we’re seeing right now in this sector,” says Tim Engle, chief strategy officer at Jewelry Television in Knoxville, Tenn. “So much of our traffic and activity is shifting over to mobile devices — both phones and tablets. We’ve had to change our mindsets and reallocate resources in order to put mobile ahead of all else.”
In fact, the trend is so prevalent that the Jewelry Television team doesn’t even think about implementing or executing new strategies without considering mobile first. “It’s our largest priority right now,” says Engle.
When assessing the mobile/home shopping movement, Engle says two different dynamics are currently in place. There’s the interactivity between the screen and the device (tablet, phone, etc.), and then there’s the continued growth of home shopping online. By straddling the two sides of the fence, home shopping channels are moving away from the stereotype of being “TV-only shopping networks,” says Engle, “and continually expanding and growing our portfolios to include mobile, Web and anywhere else the consumer wants to shop.”
On the mobile side of the equation, networks like Jewelry Television are working to improve the interactivity between the content that’s being broadcast and the items being sold. “Our underlying goal is to entertain the customer via live programming and content that really tells our story and educates the consumer on what we’re selling,” says Engle. “Whether she’s consuming that via TV, mobile phone, tablet or computer, the more we can entertain her with fashion stories, gemstone stories and other types of content, the happier she is and the more money she spends.”
Riding the Wave
As the home shopping industry continues to evolve year-over-year, the sector’s two biggest players, HSN and QVC, are morphing right along with it. West Chester, Pa.-based QVC, for example, has positioned itself to take advantage of the mobile shopping trend. “The rapid growth of mobile and social continue to reshape the retail industry,” says Paul Capelli, vice president of corporate communications and community affairs.
In 2013, he says $3.2 billion of the network’s total $8.6 billion in annual revenues came from E-commerce. “We continued to see momentum in the first quarter of 2014,” Capelli says, “where mobile orders grew nearly 60 percent and represented 39 percent of all E-commerce orders.”
Social is also hot in the home shopping industry. In September, for example, QVC launched its “toGather” social commerce platform in an effort to tie together its customers, network personalities and the people behind its brands. “toGather takes that same experience online, allowing our customers to share their finds, ideas, and tips, and discover something new every day,” says Capelli, who expects social media to become more influential in the retail space.
To leverage this trend, QVC is holding events like Red Carpet STYLE in Los Angeles during Hollywood awards season. Held at the Four Seasons in Beverly Hills, the event is broadcast live on QVC, highlighting red carpet moments and memories, celebrity vendors, and style authorities showing audiences the latest fashion and beauty trends.
According to Capelli, some of Los Angeles’ top-followed Instagramers were in attendance at the 2014 event and shared the night with their social followers through in-the-moment snapshots. As a result, he says social media activity around the experience via Instagram, Twitter and YouTube totaled 39 million impressions.
Like Engle, Capelli expects the blending of mobile and home shopping to continue well into the future. “As technology continues to evolve at a rapid pace,” he says, “we anticipate that access to content on multiple screens will remain important for retailers in the digital space.”
Cashing in the Trends
New consumer shopping trends and technological innovations are also taking center stage at HSN Inc., in St. Petersburg, Fla. There, Bill Brand, chief marketing and business development officer, says the entire retail industry has undergone a transformation that’s currently “challenging long-held conventions and assumptions about how, why and when people buy.”
According to Brand, digital continues to be a strong driver of sales for HSN, with mobile remaining the fastest growing part of the firm’s digital business. During first-quarter 2014, for example, HSN’s mobile sales grew by 44 percent and currently represent 15 percent of the firm’s total business.
“Consumers are still looking for great products and great value, but more than anything they also want inspiration, engagement and entertainment,” says Brand, who points to social, mobile and gaming technologies as the top three shopping experience influencers right now. “Companies that know how to harness this technology and couple it with deep insights and analytics about what customers want will be the most successful.”
According to Brand, HSN is sticking to the entertainment integration strategy that CEO Mindy Grossman spearheaded several years ago. Since then, the company has formed strategic partnerships with the likes of Coca-Cola, Toyota, Norwegian Cruise Lines and various other brands in an effort to “engage consumers, drive revenue growth, and create immersive, unique shopping experiences for customers,” says Brand.
In 2013, for example, HSN launched a partnership with Univision through the E-commerce portal “Boutique Univision.” Promoted via a marketing campaign across HSN and Univision’s television, digital and social media channels — including the network’s most-popular show, Despierta America — the multi-year partnership recently found actress Sofia Vergara debuting her first fragrance on HSN and Boutique Univision.
When asked about the challenges that the home shopping sector is facing right now, Brand says a primary one is creating a seamless shopping experience across multiple platforms — a process the team at HSN refers to as “boundary-less retail.” Brand adds, “We know our customer wants to purchase whenever and however she wants. She’s in control and wants to buy on her time.”
Remaining innovative and continually offering unique and engaging experiences for customers is another hurdle that home shopping networks are grappling with. “They need a reason to visit your company; share of mind leads to share of wallet,” Brand says, noting that HSN recently disclosed that its customer file is at an all-time high, with more than 5 million active customers. “How did we do this? By creating unique and own-able experiences for our customers across all platforms: TV, desktop, mobile and social.”
The Supporting Characters
App developers are also throwing their hats into the home shopping ring right now and hoping to cash in on the mobile trend. AdEase is one of them. According to Cisco Rey, founder and developer, the app (which will be released later this year) will allow consumers to buy products directly from their TVs and also learn more about local businesses via a code displayed on the commercial itself. Viewers who input the code (displayed on TV) into the mobile app will be delivered to the specific advertiser’s customized checkout area.
Rey says AdEase is different from the apps currently offered by networks like HSN and QVC — those apps only allow for shopping on their respective networks. “Our app is different because it can work with any commercial on any network,” says Rey, who sees the millennial generation’s desire for instant gratification as a driving force behind the development of apps like AdEase. “They have an ‘I want to buy it now’ mentality and they’re all carrying and using cell phones, so it just makes sense.”
San Francisco-based Delivery Agent Inc. is another firm that’s taken an interest in the shop-via-mobile trend. Retailers like H&M use the firm’s customer engagement and transaction technology to sell brand lines like the David Beckham Bodywear Collection. That particular campaign was unique because it leveraged T-commerce technology and provided a mechanism for viewers to engage and transact directly from a television commercial.
Mike Fitzsimmons, Delivery Agent’s CEO, says consumers’ growing interest in “connected” TV paints a picture of a future where more purchases are made directly from television via mobile devices. “Four years ago these devices required fixed-wire connections but now consumers are running them from their household wireless connections,” Fitzsimmons says. “All of a sudden, the TV can behave much like any other device would behave and allow consumers to buy from it directly.”
The Marketer’s Viewpoint
Long-time DRTV celebrities like Tony Little also helped boost revenues and consumer engagement for HSN. During the past few years, he’s turned out a steady stream of products like Little Cheeks® shoes and sandals, Body By Bison burgers and hotdogs, Aurawave Perfect T.E.N.S. Pain Relief, and Diet POP! Gourmet Flavored Popcorn — the latter of which sold out during its first run on the network. Little, who has recently added furniture and electronics to his product lineup, says life is pretty good in the home shopping space these days.
“The biggest challenge is keeping up with the networks’ demand for new products,” says Little, who was inducted into the Direct Response Hall of Fame in May.
Little has carved out a niche for himself in the food category, which isn’t automatically associated with the direct response sector. “It’s pretty interesting that the food business is growing for us on HSN; that’s not an easy sell on television,” says Little. “When consumers can go to the grocery chains to actually see and touch the food, presenting it on TV can be a challenge.”
Footwear is another big area for Little on HSN, where such products are garnering a lot of attention these days. “Footwear related to fashion is just screaming for us right now,” says Little. “We’ve expanded heavily in this area and are offering many different types of collections and options.”
Of course, with so much opportunity to sell innovative products via home shopping channels comes the added stress of having to plan out and deliver products in an era where supply chain disruptions can throw an entire campaign out of whack.
“We had a lot of problems last year with on-time deliveries from China. We wound up missing some important dates,” says Little, noting that missed deadlines never sit well with shopping channels that plan out their campaigns up to a full year (or more) in advance. “As a marketer who sells via home shopping networks, you have to be pretty dead-on with your deliveries because of the program guides.”
Looking on the bright side, Little says that an overall lack of product innovation (on marketers’ parts) has pushed up demand for items that can really engage consumers and get them to call in or hit “buy” on their mobile devices or computers.
“There’s definitely not as much product innovation as there used to be and, as a result, most networks are pretty hungry for new technologies, fashions and twists on existing products,” Little points out, adding that the same phenomenon can be seen in the traditional DRTV industry. “There just isn’t as much stuff out there right now, to the point where things that were hot eight years ago are beginning to resurface.”
Regardless of whether the final sales mechanism is a phone, a mobile device or a computer, Little says the same foundational principles of DRTV apply today — just as they did 30 years ago. In the end, he says, the product has to “move” the consumer and make her feel like she can’t live without it.
All of the digital and social options in the world won’t take that underlying philosophy anytime soon. “If you can’t create a great demo,” says Little, “it’s going to be pretty difficult to make your campaign work.” ■