By Tom Ryan
HSN (Home Shopping Network) is celebrating its 30th year as the originator of the television shopping concept, but seems stuck in a mid-life crisis.
Fifteen months after its parent, IAC/InterActive Corp., hired Nike executive Mindy Grossman to reverse its sales slump, HSN is still experiencing flat sales and high merchandise return rates. During the first quarter, sales dropped 1 percent and operating profits fell 12 percent.
To revive sales, an array of new brands have been launched over the last two years, including products by Sephora (beauty), SCOOP NYC (fashion), and Chef Todd English (cookware and tabletop); and more products are being sold at prices below $50. That strategy has worked for QVC, which had an average price of $46.04 last year versus HSN's $59.49, and has consistently outperformed HSN.
But at the heart of the plan is a complete revamp of the look of the show, including new sets, more engaging camera angles, new graphics color-coded to what's showing and softer lighting. Cameras focus in closer on expert guests and hosts, who have also been trained to list and explain product features that customers want or think will solve their problems.
"It's quite subtle. But we're trying to make the customer feel comfortable, like we're a good friend talking to them," Andy Sheldon, senior vice president of broadcast at HSN told the St. Petersburg Times.
It's all part of Ms. Grossman's shift to more aspirational merchandise and presentation, although not upscale.
"Aspirational doesn't mean expensive," she said. "It's a quality product that fits their lifestyle. It could be an $800 handbag or an $80 handbag. What matters is we are a place the customer thinks understands them and feels like them."
To herald the changes, HSN's first national network TV campaign in five years touting its anniversary was just launched.
But HSN's sorry performance provoked a Wall Street Journal article last week calling on IAC/Interactive to sell HSN to focus on healthier e-commerce properties. Only last year, in hiring Ms. Grossman, Interactive CEO Barry Diller insisted HSN was critical to capturing the cyber shopper of tomorrow.
"As broadband continues to expand, TV shopping services like HSN will be transformed so people make far more purchasing decisions in the home,' said Mr. Diller, according to the St. Petersburg Times. "We are only a few years away from having multiple screens linked to the internet in the home that will offer all sorts of services. Long term, HSN's understanding of retailing by the minute, 24 hours a day, is a very good discipline for the future of commerce.'
Discussion Question: What do you think the retail industry has learned about what works and what doesn't in television shopping? Should Barry Diller be less bullish about the future of television shopping? What do you think of HSN's push to reach more aspirational consumers?