Home Shopping Trends: Home Shopping Mobilizes In A World of Change1 Jun, 2012 By: Kirsten Saladow Response
Capitalizing on new technology, rather than resisting it, the top shopping channels have expanded their influence on customers.
Home shopping channels have had to navigate a new landscape during the past five years — with major issues like the economy taking a nosedive and trends like smartphones getting into the hands of nearly everybody — they have realized that their game has changed. Significantly.
Luckily for the major networks, including QVC, HSN and ShopNBC, they have looked to these changes as opportunities instead of hurdles. All three networks moved and adapted to mobile technology almost immediately. Instead of needing to be sitting on your sofa to shop, you can now be shopping literally everywhere you go — a trend that these networks were quick to capitalize on.
In fact, it’s these multiple platforms that have made home shopping as recession proof as it’s proven to be.
“Our customers are increasingly engaging with QVC on multiple platforms. Mobile is a particular standout — in its first three years, the adoption rate of mobile is surpassing that of the first three years of QVC.com by a large margin. In addition, tablet Web sales are now the fastest growing segment of our mobile portfolio,” says Paul Capelli, vice president of corporate communications and community affairs for QVC Inc.
QVC isn’t the only network that has seen huge sales potential in mobile and tablet sales — all three major home shopping networks each have iPhone and Android apps. They also all connect with customers via all social media channels including Facebook, Twitter, YouTube and even Google+.
While all three networks are eagerly adapting to new technology in hopes that new sales will follow, one longtime direct response star is still holding out for television.
“Direct response is always going to have growth, even if people aren’t buying as much due to a weak economy. People don’t stay away from television. Television is recession proof. Television creates a story and a need. Shopping channels will always do well, despite the economy. Trends on TV can move on a dime. The trend happens and direct response can get these trends into the consumers hands much, much quicker than a brick-and-mortar retail outlet,” says Tony Little, founder, president and CEO of Health International Corp.
Little is no stranger to the direct response business and one could argue that he is the most successful direct response marketer to date. He’s been on shopping channels since 1986 as “America’s Personal Trainer.” He’s still America’s Personal Trainer, but he has expanded his brand to include shoes, body pillows, massage products, food and will soon include energy drinks, insoles and water purification. His DR empire is growing rapidly and he seems to always be able to tap into upcoming trends.
“I started the shoe company, Tony Little Cheeks, seven years ago. I’m now selling 500,000 pairs per year. Another area of tremendous growth and success for me has been Body by Bison, my food line. We have sold 3.5 million bison burgers. In fact, the entire food trend is really interesting to me. With the popularity of cooking shows, the cooking channels and just how food is now a part of daily conversation more than it has ever been before, I predict that food products will continue to grow in this space,” says Little.
A simple Google search will confirm that Little is right on the money about food. Products ranging from cookware to kitchen storage to cookbooks to desserts are on all of the networks, a lot of the time.
Capelli sees strong growth from established brands, both in and out of the housewares space.
“QVC is driving growth through an assortment of highly differentiated product offerings. We see strong results from established brands, such as Keurig, Kate Somerville, Perricone MD, Liz Claiborne New York, Vera Bradley, Spanx and Dooney & Bourke. And, we see great momentum from a number of innovative, emerging brands such as Orthaheel footwear from Dr. Andrew Weil, Mally, Josie Maran, Tarte and It Cosmetics,” says Capelli.
Little agrees that diversity is key to a successful network and product line.
“There is a reason I branched into lifestyle products. It made sense to go from health riders and ab riders to nerve stimulators for pain relief. My brand wants to take care of the consumer — from ways to get fit to ways to relax to ways to get healthy. Diversifying is the key to my success,” says Little.
Home Shopping in the Age of Groupon
Despite sales being up across all channels, people are still hungry for a deal. According to Kantar Media, digital couponing on leading websites increased 17.1 percent in first-quarter 2012. In addition to that, Kantar also reports that two-thirds of all online shoppers are using a digital coupon service, like Groupon or Living Social. So, what does that mean for DR? It turns out, not much. QVC has seen tremendous growth in its channel without the help of Groupon, Living Social or any other online couponing service.
“We’re pleased with our results so far this year, with most of our markets contributing to our 5-percent net revenue growth. We are sustaining our track record of strong E-commerce growth, up 14 percent in the quarter to represent 33 percent of net revenue, a three-point increase over the prior year. Our mobile business continues to be a highlight, with 6-percent penetration worldwide in Q1 — double last year’s mix. Our sales growth from existing customers was especially strong, up 6 percent per customer,” says Capelli.
Just because there aren’t crazy Internet coupons attached to home shopping networks, it doesn’t mean that shoppers aren’t getting a deal. Often, consumers view added value or upsells as their “Groupon” deal. According to the latest studies, upsells add 15 percent to 29 percent to DRTV orders.
“Upsells help tremendously, especially when the economy is down. But, honestly, upsells and bonus products always help sales and encourage consumers to buy — but only when the bonus product is actually something that somebody would want,” says Little.
Differentiate Your DR Product From Brick-and-Mortar Products
“What people don’t realize is how different a home shopping product should be from regular brick-and-mortar retail products,” Little contends. “If you want a successful HSN product, the key is to deal with the channel first. Go in with a plan and a story that differentiates your product from a standard retail product. The absolute key to direct response is the story — the story has to have major benefits and features that the consumer wants to hear and the price has to be competitive. Do your research and find the right direct response marketing company that will really help you market your product.”
With everybody from Rachael Ray to Kris Jenner getting into the home shopping market, a strong story goes a long way. Products on the shopping channels need to have a life and a personality behind them that reaches a consumer, unlike a retail product that just sits on the shelves.
“Home Shopping Network is the most innovative network I have worked with. Mindy Grossman, the CEO of HSN, really stays on top of all the trends and knows how to really create that story behind a product that consumers want. She connects herself to movie debuts and television show tie-ins, which creates an advertisement without people even knowing they are watching one,” says Little.
Room for Growth
With all of the success of home shopping channels, it’s hard to imagine there being room for growth, but Little and Capelli agree that there is plenty of room for more profit and plenty of holes in the market.
Capelli believes that consumers want a more personal experience when they shop, especially online. When you go to a brick-and-mortar retail store, you have a salesperson to help you find what you are looking for. When you watch home shopping television, you have a host telling you a story and showing you how a product will enhance your life. Right now, there is a lot of room for online shopping to get a lot more personal for customers that crave that experience.
“Customers are looking for a personalized experience online,” Capelli says. “In February, QVC announced its acquisition of Send the Trend, an E-commerce website featuring accessories and beauty items. By developing an in-depth understanding of customers’ shopping behavior, it provides a personalized selection of items tailored to their customers tastes. We are excited by its potential to serve as a ‘speedboat of innovation’ to spark new ways of doing things within our business, and to test new concepts in personalization, loyalty and E-marketing. We expect to take the products, categories, features and technologies that are successful and roll them out on QVC.com.”
Little believes that there will always be room for growth and more products on home shopping networks. Capelli agrees with Little’s assessment and notes that QVC is adding new brands and new products to its portfolio all of the time.
“We’re constantly adding brands to our portfolio — notable newcomers include Ole Henriksen skincare, Blendtec kitchen electrics, and designers Geren Lockhart, Cynthia Vincent, Karen Zambos, Fern Mallis, Rachel Pally and Camila Alves,” says Capelli.
If you have a product that has a great story and there is a consumer desire for it, there will always be a place for it on television. However, there are plenty of products that aren’t working well on television — so this is where market research and a good DR agency come in.
“I see things that don’t work every day,” Little says, convincingly. “The product focus is too narrow and doesn’t appeal to a broad audience. You have to remember the demographic you are reaching on television is huge — and your product needs to resonate with all viewers in order to be successful. This speaks to everything from shopping channels to infomercials to short-form commercials. Again, the best way to really market your product correctly is to get the right direct response agency behind you.”
Just by flipping on the television or venturing over to a shopping network’s website, it’s easy to see what is selling: big names. Products with recognizable names — like cookware by Bon Appetit, and products from Dr. Weil and famous fashion model Iman are dominating the airwaves. Little agrees that there is no shortage of room for celebrity products and endorsements.
“Celebrity and celebrity tie-ins are huge right now, and they will remain huge for a long time to come. These channels are on 24 hours per day and seven days per week. The opportunity for all kinds of products is huge — people are always watching and always selling. These networks need new product daily. They are always hungry for fresh, innovative ideas,” said Little.
Little is so convinced that there is so much room for growth DRTV and home shopping that he is putting all resources into the Tony Little brand.
“I’m not doing royalty anymore. I was up in sales last year and I’m up in sales again so far this year. I have a very loyal 45 million customers and I’m currently selling between 75,000-100,000 pieces per day. Home shopping is where I want to put all my energy,” said Little.