The Homa Files

TakeAway: TV shopping is thriving at a time when, by many accounts, it should have died under a crush of new online competition.

High-end fashion designers are flocking to sell their first mass collections on the air, entering a space once dominated by obscure exercise equipment and dowdy tchotchkes. 

While traditional retailers have had to contend with a fickle consumer, TV-shopping sales this year have been robust.

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Excerpted from WSJ, “The Golden Age of TV Shopping” By Elizabeth Holmes, November 11, 2010

QVC and HSN dominate the business, with sales last year of $7.4 billion and $2 billion, respectively. Each reaches just under 100 million U.S. households and broadcasts live 24 hours a day, every day of the year except Christmas.

One surprising source of support: online shopping. The Internet has helped make consumers more willing to buy merchandise without first seeing or touching it in a store.

The model also benefits from the data the networks gather on their shoppers, which allow for carefully targeted marketing. Viewers convey their opinions when they call in to pay, through calls on the air and via website reviews . HSN even keeps track of sales by the minute, which helps it to evaluate its designers and hosts and to adjust its sales pitch. As each segment is filmed, producers can watch a monitor that shows the number of items sold and other data, including the number of callers waiting to buy the item.

TV-shopping networks’ proximity to customers is a big draw for high-end apparel designers, many of whom rethought their businesses during the recession. As retailers cut inventories, designers became more open to other sales channels. The average price of an item sold on HSN is around $60, but the influx of high-end designers is helping to push the average price higher. HSN also adopted a softer selling style pitched to more-upscale customers. Rather than using high-pressure tactics, it emphasizes making the item seem desirable—in an entertaining way—by showing how a garment drapes on a model, for instance.

The proposition wasn’t risk-free for the designers. Adding a new outlet could upset the department stores that account for a big chunk of their sales, and cheaper goods could potentially tarnish their image.

Edit by AMW

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Full Article:
http://online.wsj.com/article/SB10001424052748703805004575606463489605440.html?mod=djemMM_t

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This entry was posted on December 13, 2010 at 6:15 am and is filed under Mktg - Distribution Channels. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.