E-Commerce Developments
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TV shopping networks tuning in to Internet
By Glen A. Beres
December 01, 2008
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| Jewelry Television recently launched a Vault section on its Web site, promoting rare and unusual gemstones. |
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New York--While jewelry continues to be a key category for TV shopping retailers, online rather than on-air sales are the engine that has been revving up revenues in recent years.
But TV shopping executives say that even as the Web becomes a more pivotal part of their multichannel marketing arsenal, they expect on-air segments--in which jewelry designers chat with hosts, and jewelry is shown up-close and in high-definition--to remain viable, and indeed, to expand alongside Internet sales.
In recent years, online sales for all of the TV shopping companies included in National Jeweler's $100 Million Supersellers list--HSN, QVC, ShopNBC and Jewelry Television (JTV)--have increased significantly. According to filings with the Securities and Exchange Commission, QVC's online sales as a percentage of total sales increased from 16 percent to 20 percent from 2005 to 2007, and ShopNBC's online sales jumped from 21 percent to 28 percent of total sales during the same period.
JTV would not disclose online sales figures. However, Internet Retailer magazine recently named the company the fourth-largest online jewelry retailer of 2007 in its annual Top 500 listing of the largest online retailers, up from its ranking as the fifth-largest in 2006. Internet Retailer estimated that JTV's online sales were about $85.5 million in 2007 (18 percent of overall sales), compared with $70.2 million in 2006 (or 15 percent of overall sales).
And while three-year figures weren't available for HSN, the retailer reported in a recent analyst presentation that e-commerce represented 33 percent of its total sales in 2007 (up from 31 percent in 2006), with Internet sales growing by 15 percent for the year.
JTV, in particular, has ramped up its commitment to e-commerce recently. The company completely redesigned its Web site in 2007, improving functionality and adding new features, including two new Internet properties: JewelryTelevision.com/Vault, a site for rare, high-end loose gemstones and unique jewelry, and JTVWatches.com, a site specifically for timepiece aficionados.
New frontier in direct sales
Some analysts and e-commerce experts believe that, while Internet sales are exploding in every retail sector, they are particularly strong in the TV shopping category because they represent the "next step" in direct selling for these companies--offering customers the same 24/7 at-home shopping convenience they have become accustomed to via TV shopping, yet presenting a more interactive experience than on-air TV shopping.
Many of these same experts have maintained that on-air TV shopping reached its peak in the 1980s and 1990s and has been stagnant in recent years in the face of rising e-commerce sales.
However, executives at several of the major TV shopping networks say on-air shopping has yet to hit its pinnacle, and that they believe on-air online sales are complementary in helping to increase overall sales of jewelry and other categories.
"As long as women have time and money and a love for a jewelry experience that includes education from an expert and the ability to enjoy high-quality real jewelry, TV shopping for jewelry will continue to grow," says Randy Sadler, JTV's vice president of marketing. "We don't see TV shopping and the Internet as competing but as working together."
In addition to on-air shopping and e-commerce, JTV sells its product through print catalogs. JTV's multichannel marketing strategy also includes online auction and clearance sections to complement its regular online sales format.
At HSN, jewelry remains a key driver of the company's multichannel selling platform. John Bosco, senior vice president of jewelry merchandising, says sales of jewelry online have outpaced jewelry sales on-air. Bosco attributes this to the "extensive and always accessible assortment" available on the Web site. He also notes that the online format has allowed the company to develop extra product categories rarely seen on TV, such as men's, children's and personalized jewelry. However, Bosco still sees opportunities for on-air jewelry sales to grow hand-in-hand with online sales--particularly as on-air programming continues to move toward more storytelling, trend forecasting and/or reporting, fashion advice and a lifestyle focus.
"We never underestimate the importance and marketing power of selling jewelry on TV," he says. "Meeting the designer, engaging with a favorite host, or simply seeing a live-shot up close of a piece of jewelry is something the consumer loves about television shopping. Having the ability to relax and be entertained while shopping for beautiful jewelry is key. TV provides the excitement and entertainment that engages consumers, while HSN.com provides accessibility and convenience."
HSN statistics on repeat purchases bear out the importance of selling across channels. HSN recently told analysts that 22 percent of its "multibuyers" are multichannel customers.
To further boost its multichannel marketing efforts, Bosco says that HSN is testing numerous direct formats. For instance, the company is doing some catalog-type marketing pieces that sell jewelry, as well as serve as a program guide for the TV format and provide a link to HSN.com. The retailer also is starting to work with other media resources. For example, HSN has partnered with TV entertainment show Extra! on a new initiative called "Trend Shopper Powered by HSN" that features products in a celebrity/entertainment show format that drives on-air customers to HSN.com.
For JTV's Sadler, the real question isn't whether TV shopping is boosting e-commerce at the expense of its traditional on-air sales, but whether "at-home" shopping as an integrated marketing approach (which includes on-air sales, e-commerce, catalogs and other direct marketing strategies) can win out against traditional brick-and-mortar retailers. He believes it can.
"With high gas prices and the many other challenges of the traditional retail experience, we believe that shopping from the comfort of home at a time of your choosing has a promising future," Sadler says.
Editor's note: This story first appeared in the November 2008 print edition of National Jeweler.
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E-Commerce Developments
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