This month, HSN debuted an online Halloween shop, “The Boo Crew.” Raising money for UNICEF, the home-shopping network and two of its sister companies, Chasing Fireflies and Grandin Road, are selling spooky merchandise and trick-or-treat costumes via the Web.
By the end of September, QVC is slated to launch a digital platform called toGather, a social-commerce outlet similar in many ways to Pinterest.
ShopHQ, the former ShopNBC, will bow an iPad app bearing its new moniker in the third quarter, either this month or in October.
And Jewelry Television plans to add thousands of online-only items to its JTV.com inventory as part of its “extended assortment strategy.”
FALL CAMPAIGNS
This fall, the four major home-shopping networks are undertaking initiatives to boost their digital sales, which are a booming part of their business. Mobile is already the fastest-growing segment of home shopping’s ecommerce.
QVC, HSN, ShopHQ and JTV are stepping up their efforts to engage customers with rich, original, interactive content and social-media experiences on not only the Internet but on the new “second screens,” on iPads and iPhones.
No longer “tethered” to PCs or Macs, home shoppers are increasingly watching networks such as QVC and HSN with a smartphone or tablet at their side to look for information on an item or to order online.
Digital platforms — through search engines and online marketing — are attracting new customers to home-shopping venues, consumers who don’t watch the electronic retailers on TV, according to executives. That makes it a crucial driver for networks such as QVC and HSN.
“We’re continuing to make significant investments in digital: It is a growth engine for us, but it does take investment,” said Bill Brand, chief marketing and business development officer for HSN Inc., which includes the home-shopping channel and the company’s Cornerstone sister unit.
QVC, the dominant home-shopping network, said its second-quarter ecommerce growth was up 10% versus the prior-year quarter, to $550 million, or 42% of total revenue. Mobile increased a dramatic 72%, representing 28% of total ecommerce orders.
QVC’s strategy is to try to recreate the storytelling and social aspects of its TV network on digital and offer “appropriate-but-distinct experiences” on all of its platforms.
“Some of them are very linked to the live show, some of them are truly incremental experiences, and some of them are really designed to be more companion experiences,” Alex Miller, who was promoted in late August to the post of QVC senior vice president of digital commerce, said. “So you’ll see a lot of faces and stories from our customers and our inventors and our hosts present on our digital platforms.”
Years ago, when QVC debuted its mobile apps, the focus was primarily to highlight items that had recently been featured on-air, Miller said. But now QVC is taking the second-screen experience to the next, interactive level.
“While someone’s watching TV, they can have a tablet in their lap where they can get incremental content about the live show that they’re watching; they can look at previous items on air; they can participate in a poll; they can ask questions of the producers; they can read ratings and reviews,” Miller said.
GETTING ‘TOGATHER’
He is spearheading the launch of toGather, a social-media platform engineered by Oodle Inc., which QVC acquired last December to fuel its “evolving social commerce experience,” according to QVC U.S. CEO Claire Watts.
ToGather will initially launch as a separate website that users will be able to link to from QVC.com, Miller said.
Watts described toGather as “groundbreaking” and “differentiated” during the second-quarter earnings call for QVC’s parent, Liberty Interactive.
Facebook and Pinterest are the forerunners of toGather, and they all allow consumers to “discover product in a way that is very visual and also very socially driven,” Miller said. Users of toGather will be able to “heart” products, create their own collections and follow QVC hosts and vendors, he added.
Digital is also a revenue engine for HSN, the No. 2 home-shopping network. In the second quarter, HSN reported that its digital sales increased by 10% to make up 35% of overall sales, or about $186.3 million. Mobile represented about 28% of digital sales and more than 10% of HSN’s $526.2 million in total sales, up 70% from the year-ago quarter.
“Our momentum is accelerating,” HSN CEO Mindy Grossman said. “By mid-June mobile sales for 2013 had eclipsed $100 million, a milestone that wasn’t reached until the end of the third quarter last year.”
HSN this spring promoted Brand to chief marketing officer from executive vice president of programming, marketing and business development. Cornerstone — which includes upscale children’s apparel and costume seller Catching Fireflies and home and holiday décor purveyor Grandin Road — is part of his purview.
One of Brand’s tasks is to extend and integrate digital marketing across all of the company’s brands, exemplified by the UNICEF Halloween online shops that HSN, Chasing Fireflies and Grandin Road have set up.
Bolstering its online team, HSN also recruited Ryan Ross, a veteran of Pottery Barn and Harrods digital initiatives, as senior vice president of digital commerce. Ross reports to Brand.
One way HSN’s approach to digital platforms differs from electronic-retailer rivals is by having a game arcade on its website.
“Wherever she’s able to come in, even playing a game in our arcade, she’s going to spend more time [with HSN],” Brand said. “And ultimately, more share of her time equals share of wallet.”
HSN has been creating original content, including a plethora of videos, for its various digital platforms, Brand said. On HSN.com, the network is trying to deepen its engagement with fashion-minded customers with features such as its “Dress Shop” and “Jeans Shop,” which allow customers to sort through HSN inventory in those apparel categories by their style preferences and fit, Brand said.
ShopHQ (formerly ShopNBC), the No. 3 home-shopping network, in the second quarter reported its Internet-sales penetration was 45%. Mobile sales increased 56%, representing 23% of all ecommerce sales, versus 16% a year ago.
The network is focused on its tablet strategy, chief operating officer Carol Steinberg said.
“During Q3 we expect to launch an allnew ShopHQ iPad app, which will provide the live-stream of our broadcast, compelling content and access to enhanced transactional experiences,” Steinberg told analysts in August during a second-quartet earnings call.
“Following the launch, we plan to add second-screen functionality to enhance the TV viewer’s experience by providing real-time, integrated content which is relevant and synchronized to each of our TV shows,” Steinberg said. “The wide variety of content relative to the TV show enhances but does not duplicate what is viewed during the show.”
At the fourth home-shopping player, JTV, 30% to 35% of sales are digital, with 22% of that mobile, said Craig Shields, the network’s vice president of ecommerce.
“Today a large portion of our mobile sales are what we would classify as broadcast-influenced, a much larger portion than on our traditional website,” Shields said.
On JTV’s traditional website there’s more sales activity that’s unrelated to the on-air broadcast, Shields said, likely from traffic driven from Google, Yahoo! and Facebook. So JTV, which has a large digital marketing budget, sees an opportunity to sell basic jewelry items online that don’t make a fl ashy TV presentation.
“We have a pretty aggressive strategy to add thousands of unique Web-only items in the course of the next year or so,” Shields said.
“Ultimately, it’s all about improving conversion rates, the percent of visitors that make a purchase.”
TAKEAWAY
Digital sales are booming for TV home-shopping networks, with more mobile and social-media initiatives on tap.
