HSN is Everywhere She Wants To Be

Posted on by Chief Marketer Staff

It was probably easier in the old days — say, back in the late ’80s or early ’90s when HSN, then less than a decade old, consisted solely of live cable programming of in-studio sales pitches: basically a continuous round of infomercials for figurines and jewelry, most of it ending in -ique or -onia. Viewers watched until they saw an item they wanted, then reached for the phone, dialed up a call center and bought via a live agent. Revolutionary marketing for the time, yes, but also pretty one-dimensional.

Cut to the present day. HSN shoppers can now watch and buy over three separate platforms — TV, computers and mobile devices — and can set alerts and customize presentations on two of those to suit their interests. They can search for just about every bit of HSN’s past programming on a YouTube channel, offer their own product recommendations and follow their favorite hosts online. In some markets, they can even buy directly using their remote controls.

Yes, business is more complicated for HSN. But nobody there is talking about turning back the clock. For one thing, the company and its parent, HSNi (which also owns cataloger Cornerstone Brands), have been on a strong sales ride over the last few years. For Q3 2010, the most recently reported results at press time, HSN posted net sales of $439.7 million, a 6% gain over Q3 2009, and year-to-date net sales of $1.48 billion, also up 6% from the same period the year before. The average HSN transaction for the quarter rose 2% over last year, to $57.82.

Not Your Mother’s Home Shopping Network

Since spinning off from Barry Diller’s IAC in 2008 and the arrival of current CEO Mindy Grossman, HSN has been aggressively transforming from a high-decibel, hard-sell outlet to what it calls “lifestyle editorial programmed commerce.” The strategy is to offer viewers not just stuff, but stories — engaging programming that will lead customers to get personally invested in the hosts, the celebrity guests, the promotional events and tie-ins and, ultimately, the products.

“It’s really important for us on the brand side to figure out how we can continue to excite and keep her involved in the HSN experience,” says Bill Brand, executive vice president for programming and marketing. “It’s about deepening her engagement. It’s not about the one-and-done, getting her in, making her buy something, and then adios. We want to build sustainable, long-term relationships. That’s what many of our marketing tactics are focused on.”

HSN offers a wider range of products than ever before, in about 12 categories ranging from jewelry and apparel to electronics and fitness — about 13,000 active SKUs in all. Most of those products, about 70%, are exclusive to HSN. But beyond the inventory, HSN wants to emphasize the stories behind the products. That can take several forms. The brand often links up with celebrities to develop and promote signature product lines. It has also elevated the role of its hosts in both broadcast programming and social media, morphing them from shills to style mavens and storytellers with fan followings.

Most of all, it has become tenacious about extending its programs across numerous platforms, making sure that customer can access the content they want, when and how they want. TV programming contains numerous commercials for HSN.com, and hosts are constantly advising viewers to go to the website “for the full assortment” of some product. Brand says that HSN research has shown that 60% of its TV audience watches the cable channel while surfing the web.

The rationale for this cross-channel appeal goes right to the bottom line. While the average customer who buys only from HSN TV spends $855 a year with the merchant, and one who orders strictly through the website spends $681 annually, customers who use both the online and offline channels spend, on average, $1,294 a year, CEO Grossman told analysts at a Citigroup media conference in January.

HSN’s access strategy, therefore, is to offer the most engagement points it can, diffusing its content and its merchandising in an effort to build more of its audience into those cross-platform “best customers.” And the strategy seems to be working; at the last quarterly financial breakout in November 2010, Grossman reported that its high-value “best customer” category had increased 9% over the summer months.

Next Page: Wall-to-Wall Interaction

Wall-to-Wall Interaction

When customers get to the HSN.com site, they find a 360-degree marketing environment that goes beyond simply helping them find what they’re looking for.

For example, a shopper looking for jeans on HSN.com can go to the landing page for the signature collection from Diane Gilman, one of HSN’s star designers. She can then sort that entire Gilman collection by filters — including featured HSN picks, customer ratings, newest items, and prices high to low or low to high. She can also select Gilman items available only online, or those featured on air that day.

For specific guidance about buying women’s jeans, she can also click through to the “Diane Gilman Perfect Jeans Guide,” where Gilman offers short video clips describing the basic styles available — skinny, boot-cut, etc. — while Flash video of each style plays, giving a 360-degree view of the product.

HSN also offers video: lots and lots of it, in fact. The 24/7 broadcast feed results in 13,000 online videos on the site, along with 12,000 product demos. There are also 58,000 videos loaded to the HSN YouTube channel, making it the most prolific retail outlet on the website.

In terms of engagement, visitors to the site are also encouraged to click through to blog and video blog content from HSN’s star designers and hosts, including Gilman, beauty and health spokeswoman Colleen Lopez, home decor designer Jonathan Adler and about two dozen others. Both the blog page and the video blog landing page also link directly to the most recent content on HSN’s Facebook page, with 45,000 followers, and the HSN Twitter feed, with 9,800 followers.

Of course, HSN.com home page visitors can also watch live streaming video from the HSN channel online — in their choice of standard or high-def quality. An interactive program guide available on both the home page and the video player can track down specific programs for future viewing. Live viewers can also sort video to find the segments recently aired or to find products and events spotlighted for the entire month.

The end result: More than 300,000 unique visitors to HSN.com each day, generating 4 million page views a day. That’s engagement.

Since the “Buy Now” button is just pixels away from the video player, it also creates net sales. Internet transactions on HSN.com accounted for $1.1 billion in revenue in the first three-quarters of 2010. At that figure, web sales make up roughly 40% of the brand’s more than $2.9 billion in total revenue for the period.

HSN’s online presentation is an extension of its trademark on-air demonstrations, something that helps distinguish the marketer from brick-and-mortar retailers, says Kurt Kostur, senior vice president of brand and partnership marketing. “In a sense, we want to empower our customer, to build her confidence and trust. Through our culinary demonstrations and in our blog program online, she can engage with our experts and get that one-on-one experience that makes us an important part of her life.”

Mobile commerce figures into the picture, too. HSN is the only retailer to include streaming mobile video, as well as broadcast and Internet, on its iPhone and Android apps and on feature phones that can handle the stream. The website is also optimized for viewing and shopping over mobile devices, and in December HSN launched an iPad app that lets users stream video at the top of the screen while browsing related products on the bottom.

“Our mobile strategy is evolving in conjunction with consumer behavior,” says Amber Minson, vice president of online and multichannel marketing. “We started with iPhones and then Android devices, and now with the iPad — each one of those opens new doors for us. Texting is becoming more important, in addition to email. All those changes make you look at the analytics for clues about what to do next.”

Next Page: Promotions Beyond the Tube

Promotions Beyond the Tube

A large part of the HSN strategy is to create events that span multiple channels, finding properties or celebrities that resonate with their core customers and then extending that interest to broadcast, online and mobile channels and, in some cases, to live events. Last August, HSN paired with Sony Pictures to run three days of programming around the debut of the Julia Roberts vehicle “Eat, Pray, Love,” showcasing more than 400 products inspired by Italy, India and Bali.

“What our customers responded to was the sense that it was very current and relevant,” says Brand. “We were giving them information that made us more valuable to them. We’re able to create these events that become appointment viewing on-air, and our customers respond.” Brand says his channel will have more such entertainment tie-ins this year, although perhaps not lasting 72 hours, and even more are planned for 2012.

“All our research indicates that these events get our current customers excited — and for new customers, it changes their perception of us as a destination channel,” Brand says. “That’s critical, since our goal at HSN is to grow the customer file.”

Cross-channel promotion has also been key to HSN’s recent campaigns, including the launch of singer Mary J. Blige’s fragrance (see text box, pg. 15) and the annual Great Gift Giveaway (see below). Each August, the channel celebrates its own birthday, and last year HSN paired with Harrah’s, handing out HSN-branded gift cards to Harrah’s Total Rewards members at selected Harrah’s properties nationwide and holding nightly on-air drawings for a $185K birthday giveaway. The finale was a live two-day event at Harrah’s Planet Hollywood Resort in Las Vegas featuring celebrity personalities Susan Lucci, Tori Spelling, Tony Little and Wolfgang Puck, among others; attendees could watch the live broadcast and shop at eight kiosks stocked with HSN merchandise.

Star-Studded Stories

WHEN IT COMES TO CELEBRITY PITCH-PEOPLE, HSN DOESN’T JUST GO FOR EVERY SITCOM STAR WITH A TUMMY-CIZER.

“Celebrity certainly can play a strong role in driving interest,” says Bill Brand, executive vice president for programming and marketing. “But over the past four to five years, we’ve put in a strong filter to determine who are the right people to be in business with. Will they contribute to deepening the relationship with our customer?”

For example, HSN’s development team spent time listening to singer Mary J. Blige explain her interest in developing a personal fragrance exclusive to HSN. A video crew created a documentary series about parts of her life that ran on HSN.com prior to the July 2010 launch. And Blige showed up at the Essence Music Festival with plastic bracelets scented with “My Life.”

The result of this pre-launch prep was a sale of 60,000 units during the first six hours the perfume was available on HSN — record-breaking in the channel’s fragrance category. — BQ

Many Ways to Play

FOR SHEER CROSS-CHANNEL REACH, NONE OF HSN’S PROMOTIONS HAVE BEEN MORE INCLUSIVE THAN THE LATEST VERSION OF ITS ANNUAL HOLIDAY GREAT GIFT GIVEAWAY.

The contest, an almost-two-month-long daily prize drawing, originated on TV and spread to the HSN.com website in the course of its first four years. But this year HSN partnered with ePrize to cast a wider net, shotgunning the promotion out to mobile phones, smartphones and Facebook as well.

The result was double-digit increases in the numbers of users registering for and playing the game (20% and 11% jumps over 2009 rates, respectively) and a stunning 80% opt-in rate to receive further communication from HSN after the game was done. Other metrics were equally strong, with mobile players referring an average of three friends to the game, and 6% of Facebook players posting updates to their walls or their friends’ news feeds.

The results seemed to prove the validity of HSN’s 360-degree approach to promotion as well as marketing: Giving fans more points from which to engage in a favorite promotional contest paid off in both engagement and viral spread.

“Our demographic is heavily female, and she’s older — 30-plus,” says Amber Minson, VP of online and multichannel marketing. “On Facebook, our girl is there in a big way, with over 250 friends. That’s pretty powerful — that she was compelled by the game and wanted to tell her friends about it too.”

Minson wouldn’t share the actual number of opt-ins garnered in the giveaway, but she gave a picture of the work that lay ahead for the brand after this campaign. “We work closely with our CRM team to dig down into the actual customer makeup, to understand at the most granular level which new customers found this compelling, so that we can make a decision how best to apply the tactical tools to get the most lifetime value.” — BQ

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