Could you make it big on a TV shopping channel? It helps to think outside the box of conventional marketing and start thinking the way the top networks do about their TV viewers.

By Jack Gordon

The home shopping industry couldn't have asked for a bigger shot of free publicity than it received this fall from Donald Trump. In Episode 5 of his hit reality-TV series, "The Apprentice," the task Trump set for his teams of executive-wannabes was to sell a product on QVC, the biggest (as The Donald noted in a self-flattering aside) of four major players in the home shopping industry.

QVC went one step further by inviting the winning team back to its studio on the Monday after the "Apprentice" episode aired to try again with the same product. "We showed them how to do it better," says Tim Megaw, senior vice president for broadcasting and TV sales. The team tripled its original sales total.

That same day, Trump himself appeared on QVC and sold 37,000 copies of his book in 22 minutes--a muscular display of the medium's power to move goods.

The Trump endorsement was a boon for all four retailing channels, one industry insider suggests, because the only real obstacle to skyrocketing growth in home shopping is a perception that "TV shopping is uncool or unhip." Granted, it may be a leap to assume that the public's taste for "The Apprentice" translates into a perception of Trump as a hipster. But maybe if home shopping is cool enough for Trump, it will be cool enough for a lot more American consumers.

This past fall, Donald Trump, business mogul and star of the hit reality-TV series, "The Apprentice", appeared on QVC to sell copies of his book.

Not that the $7 billion home shopping industry isn't already growing at a healthy clip. HSN reported a 9 percent revenue increase from 2002 to 2003. QVC, ShopNBC and Shop at Home all reported 12-percent gains in sales. But while 85 million U.S. households are reached by one or more of the channels, only about 8 percent of those households buy anything from them, according to Will Lansing, president of ShopNBC. That leaves a lot of room to grow.

Cool or not, the home shopping medium can be a goldmine for direct marketers. The industry is awash in tales of shoestring entrepreneurs who took a product idea to one of the channels and parlayed it into riches.

Greg Gemette, executive vice president of merchandising for HSN, cites the Bouncing Snowmen as a recent success story. "Two brothers with a plumbing-supply business came to us in 2003 with some metal yard decorations for Christmas--nothing to do with plumbing," he says. "We launched them in our 'Christmas in July' event. In dollars-per-minute, they hit a home run."

The Bouncing Snowmen were a hit again in HSN's fall pre-Christmas shows. They returned in 2004, joined by Bouncing Santas, Bouncing Nutcrackers, bouncing Thanksgiving decorations and more. One brother now runs the plumbing operation, while the other oversees the thriving bouncer business.

QVC's Megaw points to his channel's Quacker Factory line of sweaters and to the Chesapeake Bay Gourmet line of frozen seafood. Quacker Factory owner Jeanne Bice was making duck-motif sweaters in her Florida garage when QVC found her in 1995. Ron and Margie Kaufman had a small crab cake business in Maryland. Today, both companies are multimillion-dollar enterprises, still going strong on QVC.

Some of the products offered on the TV retailing channels and their Websites are brand-name goods from major manufacturers: computers from makers such as Dell and Gateway, cameras and camcorders from Canon and JVC, mattresses from Sealy and Serta, Invicta watches, Wilson golf clubs, Hoover vacuums, sports apparel from Champion and Reebok, and dinnerware and collectibles from Royal Doulton.

But the hallmark of every retailing channel is the exclusive product or collection the viewer can find only on that channel. For direct response marketers whose goods can hit the proprietary dollars-per-minute goals that the channels use to measure success, TV shopping can be a bonanza.

Executives from all four channels say they are aggressively seeking new products across a broad range of categories. Their criteria are similar. The product should appeal to a mass audience, not just a niche. It should be highly demonstrable; ideally, it should solve an actual problem on the air within an eight- or 10-minute timeslot. It should offer great value and quality--no junky merchandise that buyers will return.

For a marketer with the right product, the execs insist, getting it on the air can be as simple as following the directions in the "vendor" sections of their Websites. (Then again, sometimes it requires more research. See "Cracking the Buyer Code at Live Shopping Networks" on p. 54 in the November issue of Electronic Retailer).

A quick browse through the four channels with your TV remote sometimes will suggest that they are similar to the point of being hard to tell apart, especially if they're all selling jewelry when you cruise by. But if you think your product could score a hit in the home shopping world, it helps to know something about the players--and the differences are as important as the similarities. Here is an overview of the four major channels and what they're looking for.

Home Shopping Channels at a Glance
	QVC	HSN	ShopNBC	Shop at Home
2003 Sales	$4.8 billion	$2.2 billion	$617 million	$235 million
Households reached	85 million	83 million	56 million	52.5 million
Units shipped	120 million	50 million	4 million	2 million
Web sales as % of total	15%	17%	20%	10%
Buyer Demographics (all channels): 75-80 percent female, concentrated in the 40- to 50-age group, with household incomes above $60,000.
Source: channel executives

QVC
Headquartered in West Chester, Pa., QVC is the Goliath of the industry, with twice the sales of its nearest competitor, HSN. QVC's $4.8 billion in 2003 revenue, with a penetration of 85 million households, makes it the country's third largest television network, trailing only NBC and CBS.
QVC sees itself as a full-scale department store on television, Megaw says. Its core customers are affluent women who like to shop and "would enjoy a trip to Bloomingdales." That's the kind of experience QVC executives want to give them.

Fast-growing product categories include health and fitness, beauty, food, and apparel. A particularly desirable growth category is male apparel and jewelry. As with the other channels, female jewelry is a mainstay but is declining as a percentage of total sales.

About one-third of QVC's offerings are mainstream products that viewers could find in a shopping mall, Megaw says: Dell computers, Fuji cameras, Anne Klein apparel, Select Comfort mattresses, and so on. Another third are QVC's proprietary brands from established manufacturers. The final third represents "item business," consisting of non-mainstream items that are difficult or impossible to find at retail outlets, from inventors and start-up companies.

"We want the inventor to be an on-air guest," Megaw says, not only to demonstrate the product, but also to "tell the story of how the person decided to make it. We shy away from hired guns not directly associated with the product or the manufacturer."

Even the celebrities who sell their own lines of goods on QVC (including Joan Rivers, Victoria Principal and Jessica Simpson) must be closely associated with their branded products. "Joan Rivers can say, 'When you've had as much plastic surgery as I have, you need high-quality cosmetics.'" When Jessica Simpson talks about her Kissable line of edible creams and body rubs, viewers have no trouble believing that she actually uses those products.

Megaw names customer service and lower-key on-air presentations as the major factors differentiating QVC from its competitors. "We'll do anything to ensure customer satisfaction," he says. "If buyers aren't satisfied, we'll refund their money, no questions." As for its presentations, the channel tries for an attitude that says, "We're your next-door neighbor, we've found a great product, and we want to tell you about it. If you return it, we're still friends."

Soap opera star Susan Lucci, who has her own signature line of women's apparel, is one of many celebrities who have found success on HSN.

HSN
Founded in 1977 on an AM radio station in St. Petersburg, Fla., HSN (formerly the Home Shopping Network) is the oldest and second largest TV retailer, with 2003 sales of $2.2 billion.

TV retailing offers marketers some significant advantages over an infomercial, says Gemette. "We're a store, not a commercial. We bring buyers to view us, on TV and on the Web. We can launch products fast and make them brands. An infomercial is just a medium. We're a retail business, with strong teams and infrastructures behind us. We have the ability to source products and to help people produce and market them."

Like QVC, HSN aspires to be a full-scale "department store on the air," says Gemette. "Our mission is to be a relevant fashion and style retailer for American adults. We want to do it with a fashion sensibility across all product categories. We want to be on trend--not ahead and not behind."
As examples of fashion-forward products, he cites everything from apparel and the latest in vitamins to ergonomic chairs and memory-foam mattresses. He says that HSN wants to expand its variety of offerings and is actively seeking new products in many categories.

Hot growth categories include the home business (housewares and furnishings, cooking, tabletop gadgets, etc.) and women's apparel and accessories. Also, Gemette says, "health and fitness is a trend in general. Our goal is to capitalize on all trends, not just TV trends. Over the past three or four years, health and fitness has really come on."

But there is a difference between fashionable and a fad, he warns would-be vendors. "We're not interested in selling gimmicks. We want real products for people with real problems: fresh, innovative, on trend, with value to the consumer, meets their lifestyle needs, and it's something they can't find at a regular department store."

Even with HSN's proprietary celebrity lines, he says, "first we look for great products, then we look at the celebrity who offers them. We were inspired by Patti LaBelle's dramatic clothing. Raquel Welch brings us a line of jewelry fired by her passion. Wolfgang Puck really is an expert chef."

If unknown inventors have the right products, HSN will embrace them with the same fervor, Gemette says. "We can buy their products (outright) or we can help them with the manufacturing. It's all about the idea."

ShopNBC views itself as an upscale alternative to its two larger competitors. The network targets viewers with an average household income of $75,000.

SHOPNBC
In 1999, NBC and its parent company, General Electric, bought a large stake in ValueVision Media, a home shopping channel specializing in fine jewelry. There was talk of revolutionizing TV retailing with cross-promotions to NBC's hit shows. If viewers liked the sweater Jennifer Aniston wore on an episode of "Friends," they could flip to ShopNBC and buy it then and there.
That dream never came to pass. Efforts to achieve it demonstrated, in the words of one industry observer, that "99 percent of TV viewers are there to be entertained, not to buy something."

Today, jewelry still accounts for 65 percent of ShopNBC's business. But the channel has steadily expanded its offerings in categories such as beauty, fitness, electronics, home furnishings and housewares. The challenge now is to grab a bigger slice of the department-store pie shared by QVC and HSN.

Will Lansing, former CEO of Fingerhut Companies, took over a year ago this December as president and CEO of ShopNBC. The channel now distinguishes itself mainly as an upscale alternative to its two larger competitors, Lansing says. "We have a higher income demographic. We look more elegant than the competition--of course, that's easy for me to say. But our products are probably higher quality, and we usually have a higher price point."

Indeed, ShopNBC's average price point is $185 vs. about $50 at QVC and HSN. Its viewers claim an average household income of $75,000, roughly $10,000 higher than the average for other channels.

"We're always interested in high-quality products that are priced well," Lansing says. The most desirable products are "unique," meaning they can't be found at the mall. "But our customers expect that the middleman has been cut out, so the products have to offer great value."

Lansing suggests that for direct marketers, TV retailing is not only an alternative to infomercials but also a great way to test and refine an infomercial campaign. "We can test which sales pitches work. We're a great medium for someone who wants to refine an infomercial's value proposition." He says that ShopNBC prefers products that have some history, as opposed to totally experimental offerings, so it welcomes vendors with experience in direct response sales. "If you have a successful infomercial, working with us can be a good way to increase sales."

SHOP AT HOME
Shop at Home is the smallest of the four retailing channels, but the one with the most audacious plans. After a two-year acquisition period, Shop at Home now is owned outright by the Scripps Network. Scripps also is the parent of Home & Garden Television (HGTV), the Food Network, Fine Living and DYI: Do It Yourself.

Last January, former Food Network President Judy Girard took over as president of Shop at Home. Her task essentially is to do what ShopNBC couldn't: integrate TV retailing with Scripps' other networks and "close the loop" in the viewer/buyer cycle.

Why does she think she can succeed where ShopNBC failed? In a word, lifestyle.

Shop at Home markets itself as a "lifestyle" network by featuring crafting expert Carol Duvall of HGTV and DYI cable networks.

HGTV, the Food Network, DYI and Fine Living are all "lifestyle" networks, she says. "Viewers are passionate about those networks, because they're passionate about the categories they represent." That is, categories like home décor, housewares, food and cooking, crafts, and scrapbooking.
"All of those categories and ancillaries are fodder for Shop at Home," Girard says. "We know the viewers are moveable. We know we can move them to Websites; we have almost 10 million unique viewers on the four sites combined. We think we can move them to Shop at Home."

Some crossover tactics already are underway. Food Network chef Joey Altman and crafting expert Carol Duvall of HGTV and DYI--both launched retailing shows on Shop at Home this year.

The network will continue to welcome products and vendors regardless of whether they have any affiliation with the other Scripps networks, Girard says. "Our goal is to create a broader offering for the customer. We need to see as much product as possible."

But many strategy points--and opportunities for vendors--are still up in the air. Might your kitchen knives be adopted by Joey Altman or Emeril Lagasse and wind up featured on their Food Network shows and on Shop at Home and on the Websites of both networks? Maybe. Girard says that editorial control of the other Scripps networks will remain entirely in their hands, and extreme care will be taken not to alienate loyal viewers by trying to shove products and cross-promotions down their throats. But hey, Lagasse needs to use somebody's sauté pan.

Jack Gordon is editor at large for Electronic Retailer magazine. Please send comments and questions to editors@retailing.org.