In November, Worldwide Shopping Club arrived on the live shopping scene to compete alongside the top four home shopping channels. The company's business model; however, doesn't necessarily depend on TV viewers but Internet loyalists. Can this start-up company compete with the big boys?

By David Lustig

Home shopping is a tough business. Not an impossible one, mind you, but a tough one. It takes diligence, faith in your product and an unshakable belief that the odds are in your favor. If all those factions fall in line, success may not be assured, but the chances of making it increase exponentially. Take the Kissimmee, Fla.-based Worldwide Shopping Club (WSC), for instance, which began its shopping channel operation in early November 2004. What makes WSC unique from the competition is that viewers don't sit in front of the television, but instead use the power of the Internet as their primary contact.

Since its inception, the TV-based home-shopping industry has matured into an $7 billion annual business. What was once considered a vehicle that could only sell low-end goods has grown brands recognized worldwide--such as Dell Computers, Magnavox and Oreck--and made them a staple of the genre.

Through creative behind-the-scenes dealings, branded manufacturers now flock to TV-based channels in the hopes of reaping the benefits of high-volume sales and product awareness offered by a mass reach that offers the ultimate sales pitch; the ability to see the product in action, on someone's wrist or positioned in a setting that is hopefully very much a mirror of the at-home audience. With the right organization and build-up, it's hard to miss. And it rarely does.

With studios in Kissimmee, Fla., the Worldwide Shopping Club can produce live shows that can be streamed to media servers and displayed on its Website.

But using the Internet as the primary conduit for a home shopping network? Absolutely. Now, with two growing trends--the Internet and the ever-increasing popularity of fast broadband connections--The Marlin Group's fledgling Worldwide Shopping Club sees itself as well positioned to combine its power and take advantage of both. And ultimately, it will be a live 24/7/365 proposition that is there when the viewer wants, no make that, needs it to be.

THE MAN BEHIND THE INTERNET CONCEPT
The whirling dervish at the center of the Worldwide Shopping Club is Ronald J. DiDonato, president and COO of The Marlin Group and president and CEO of Marlin Logistics & ContactNet. As he is quick to explain, becoming involved in a new way to deliver content and compete with established home shopping networks, is not new to him.

Among his many accomplishments, from 1986 to 1994, DiDonato was the chief operating officer for Home Shopping Fulfillment Inc., a subsidiary of the Home Shopping Network (HSN). At Home Shopping Fulfillment, he successfully implemented a $12 million warehouse management system that yielded a 75-percent improvement in inventory accuracy and a reduction in shipping errors to less than one-half of 1 percent. DiDonato also created a new return center that reduced processing cycle times by 50 percent with 25 percent fewer employees.

"It was a very, very new type of business for me," DiDonato says. After working under co-HSN founder, Roy Speer, for almost two decades as the president of Home Shopping Fulfillment, he was looking for a new idea; something that would not be a mere imitation of the established home shopping networks, where, he says, one would simply take the TV show and put it on the Internet. That wouldn't be good enough or competitive enough for him.

"We needed to do something different, a niche, something other than TV," DiDonato explains. "About a year ago, we decided to look at designing something strictly for the Internet, honing the basic theory of the home shopping networks but, at the same time, designed from the beginning strictly for the Internet."

IT'S REALLY ALL ABOUT VIEWER TASTE
DiDonato hopes The Marlin Group's Worldwide Shopping Club will not only give viewers the ability to buy the item on an Internet live stream, it will allow them to hyperlink to a different category.

"If one of our personalities is showing a watch," he says, "and you don't want to buy a watch, and you see in our inventory that we have shampoo, you can click on hair products and click on that item if you want to learn more about shampoo. Instead of getting a video about watches, you can get information on shampoo. You just can't find that any other place. With the Worldwide Shopping Club, we're looking at creating a world absolutely designed for the Internet as we know it today."

It was, everyone agreed, a good idea. But what about all the ingredients needed behind the concept to make it work? Where would all that come from?

HAVING THE BACKEND IN PLACE DEFINITELY HELPS
The organizational answer was simple, explains Robert P. Portaro, executive vice president of sales and marketing, because it was already in place in The Marlin Group of companies, a very well-established third-party fulfillment and customer care organization that offered a complete e-commerce platform including a shopping cart and payment processing.

Portaro explains that an entrepreneur may be the master of his or her creation, "but it is a company like The Marlin Group that can provide the infomercial, host the Website, provide a call center, take the orders, manage the inventory, handle all the financial details and even take care of returned merchandise." In other words, he says, "a seamlessly integrated partner invisible to the customer. We become an extension of your brand." Now, besides continuing its very active backend business for others, The Marlin Group is using its expertise for creating something of its own, as well.

TAKING THE CONCEPT TO THE NEXT LEVEL
With The Marlin Group having all this already in play, the question was what would be the next step in creating its Worldwide Shopping Club.
"Because we have studios in Kissimmee, we can stream out of the building," says DiDonato. "We have the backbone and the bandwidth and right now we're installing additional capacity. We have shopping carts, an automated warehouse management system, 150,000 square feet of warehouse here and another 50,000 square feet in Las Vegas.

The shows will also be digitally archived and encoded in real-time. The encoded stream is sent to Marlin's media servers to be displayed live on its Website at key parts of the day. Each show is also indexed to create a library of encoded content. Shows will be live initially, only from noon to 6 p.m. (Eastern Standard Time). Thereafter, an automatic playback controller will play previously encoded shows. WSC will also have the ability to "go live" at anytime to capitalize on periods of high Web traffic during specific times.

Combine that with previously made contacts DiDonato cemented worldwide in previous endeavors, including product suppliers in China and Bangkok, and he knows he is back in business again. "They're knocking down the doors," he says confidently.

Worldwide Shopping Club will have the ability to "go live" at anytime to capitalize on high Web traffic times.

DiDonato's biggest concern is not the hardware, not the streaming Internet, not the razzle-dazzle that must inevitably be a part of any shopping network, it's getting people to come to the site.

"We've got an active marketing plan," he says. "We're not going to be an also-ran. We've already contacted an Orlando, Fla., marketing company to drive eyeballs to our site. Without that, we're on a failure course."

But DiDonato has no intention of failing. His company is already involved in a combination of infomercials, 30-second television spots, direct sales marketing promotions and Internet search engines to make it happen, all with the intention of re-evaluating the marketing plan on a 30-day basis.

UNDERSTANDING WHAT VIEWERS WANT TO SEE...AND BUY
DiDonato and his team also are acutely aware that as a start-up company, they need to narrowly focus their inventory lines to a couple of categories and stay away from so-called "soft goods" such as clothing.

"We're looking at jewelry; sterling silver and 14k gold; high-profile, very well-recognized cosmetics, hair care products, watches, vitamins and vitamin supplements," he says, "and we're going to do one- to two-hour shows on specific products.

"Then there will be 'one-ofs,'" he says, "high-value jewelry, memorabilia, collectables, items that there is only one of in the world." Items he cites as examples include a Babe Ruth baseball and a $40,000 Rolex watch.

WHERE DOES DIDONATO SEE THE WSC HEADING?
DiDonato not only wants to make the current concept of the Worldwide Shopping Club successful, he is already looking toward the future.
"We will constantly tweak what we do," he says, "and expand to new product lines, concepts and ideas as we grow. I really want to run this. We'll look at a cable system and dish TV. We're going to grow this unique creature on the Internet.

His energy and excitement about starting this new venture seems boundless, but he doesn't let his enthusiasm get in the way of the hardnosed rules of business.

"I'm not going to go on if it is not complete. It's got to be a quality product or nothing. I'm 59. The experience and experiences that I had at the Home Shopping Network; you could never put a price tag on. I loved it back then, but after a while it was time for me to leave. Now, with what we've put together with show hosts and production people, I'm about as excited as I can be."

David Lustig is a contributing writer for Electronic Retailer magazine. Please send comments or questions to editors@retailing.org.