Thursday, June 10, 2010

The Money Making Narrative of HSN

Via Money and Storytelling

...[HSN] was famous for uninspired clothing, beauty products that didn’t really do what they claimed, and logistics that would ship gadgets arriving broken. So her first goal was to change course completely and to make the channel relevant again for customers. Now HSN is a 24/7 scripted broadcast building momentum for a shopping frenzy hour by hour, product by product.

The basis for the HSN turnaround was to understand who their customers are. These ‘professional shoppers’ as Grossman has named them are 80% female, over 35 years old, middle class people who buy products to feel better.

So the actions taken at the company included first to eliminate all products that could be easily found elsewhere. Second, each product sold on the show is an unique offer to the customers. Its a special deal that is available only for a limited time on their channel. Third, the products are either branded by popular designers or endorsed by celebrities.

Proof of the turnaround for HSN sold designs by Naeem Khan and Badgley Mishcka as well as fragrances by Sean Combs and apparel/accessories by Serena Williams.

...From a marketing perspective, the key issues to take from the HSN case is the narrative. Home shopping doesn’t have be about a person shouting ‘Buy now!’ on your TV. The celebrities and hosts try to be natural, more like talking to friends than selling something. They talk about their life, the products, and how it would make you feel.

Furthermore, the channel is able to position itself in an unique way by drawing from style icons. The product line is unique and available only for a limited. Products are often sold out, so there is a sense of urgency to purchase. Lastly, there is always the up-sell. When Serena Williams talks about a necklace, there is always a matching set of earrings to buy.

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