How businesses are selling products through TV shopping channels such as QVC and Home Shopping Network.
You don't care about TV home shopping yet. But you will.
The greenroom at home-shopping broadcaster QVC really is green. Green rug, green walls, green upholstery. Everything the color of money.
Like greenrooms everywhere, it has a TV tuned to the live feed from the studio. Next to the TV on the credenza sit two computer monitors. One lists the products QVC is featuring on the air at that moment. It has a column for sales and a column for inventory, and it updates the information every five seconds. The other displays a multicolored horizontal bar - green for calls to live operators, yellow for calls to the computer, and red for occasional overloads (indicating a buying frenzy in progress). As calls come and go, the bar quivers.
Not long ago Quay Hays, head of General Publishing Group, in Los Angeles, got to see the bar quiver, swell, and turn red. It was a Friday in November, around suppertime. Author Frank Coffey was in the studio to pitch a book from GPG's fall list: 60 Minutes: Twenty-five Years of Television's Finest Hour. Two weeks earlier Coffey had spent a whole day at a printing plant in Willard, Ohio, autographing 3,000 copies of his book for shipment to QVC's warehouse. Now, as Hays waited in the greenroom, the perky QVC hostess put aside the white teddy bear that sings Christmas carols when you wave your hand in front of its face and held up Coffey's book.
"There were about 15 people there," Hays recalls. "Our group, our rep, the book buyer from QVC, and two people who were going on after us to sell porcelain from Norway. We just started watching the author talk, and we started watching those numbers build on the computer screen. Pretty soon every operator was busy, and there were calls on hold. And the number kept rising. First it was 1,000, then 2,000. Five minutes into the show, people were jumping up and down in the greenroom, yelling, 'Get him off! We don't have any more inventory!' "
The book's second appearance, despite airing opposite a "60 Minutes" anniversary special on CBS, was also a sellout: 5,000 books in 12 minutes. All told, in 17 minutes on QVC, the book sold 8,000 copies and racked up $240,000 in sales.
"What immediately entered my mind," Hays says now, remembering that lightning in the greenroom, "was 'We want to sell all our books this way!' "
Maybe he will. And maybe one day, despite what you're thinking now, you'll sell your products that way, too. True, home shopping is currently just a $2.5-billion speck in the trillion-dollar retail universe. But the arguments in its favor only begin with what Hays learned firsthand - that this is a distribution channel with enormous power, even in its technological infancy.
Add to that the buzz quotient. First Barry Diller ended his post-Fox sabbatical and joined forces with QVC. Then came Diller's high-profile pursuit of Paramount (even though he lost); the announcements by Spiegel (a cataloger) and R. H. Macy (a department store) of plans to create their own home-shopping services; the tantalizing speculation surrounding experiments with true interactive networks involving Time Warner, Microsoft, and others; and the sum of so many paradigm-shattering, eye-popping personal experiences like Hays's.
Imagine a TV dial with 500 channels, 400 of which sell everything from wristwatches and hiking boots to accounting software and consulting help. Imagine, ultimately, info-highway-bred interactivity enabling customers to summon product reviews, ask questions, and sample services from the comfort of their Barcaloungers.
Why wouldn't it work? Why shouldn't it work for you?
"This is the beginning of a very important transition," says Gary Arlen, a consultant to interactive merchandisers. "Now is the time to determine how your product might fit into all this."
Of course, who could be blamed for discounting all this hype? For thinking of TV shopping and remembering only the Exorb-it 2000 (more than a sponge, it's a "high-tech suction block") or the Tank Topper (a wicker planter/toilet accessory that takes care of the plant-watering chore automatically)? You have doubts. We understand. Here, then, are some questions and answers about the most maligned, misunderstood, and (maybe) underestimated sales channel in existence.
Isn't a lot of the stuff they sell on TV schlock? Karen Fried thought so . . . at first. She's the inventor of a word game called Think-It Link-It. When a QVC buyer approached her early last year, she backed away. "I had gone to great pains to create an upscale image for my product," she says. "It was critically important that I stand apart. Now I'm going to be on QVC?"
Eventually, however, Fried changed her mind - and found TV selling worthwhile, even if sales were only so-so by QVC's standards. (In the early days of electronic retailing, selling $10,000 worth of merchandise in one hour was considered excellent. Nowadays, the network would like to do at least that much per minute.) After two tries, QVC stopped inviting her back. But her biggest worry - that appearing on a home-shopping channel would somehow taint her product's image - disappeared once customers began approaching her at game demos in swanky toy stores like FAO Schwarz, saying, "Gee, I saw you on QVC."
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So it's not just mall grazers and shut-ins who shop on television? Not anymore. The demographics are clearly improving. Recent surveys paint a fairly attractive portrait of home shoppers: 25% in the target 25-to-34 age range, and an average household income of almost $35,000. Women buyers still outnumber men - by about three to one - but men are starting to watch. Ask around. Even if you've never bought anything on television, chances are, your friends have. (If they'll admit it, maybe you should, too. The stigma is fading. It's OK to shop at home.)
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Bought what, exactly? What sells? Besides jewelry? The product line is expanding, but slowly. No one is more aware of the medium's current limitations than tiny ValueVision, which broadcasts to 10 million households from Eden Prairie, Minn. At ValueVision, rings, bracelets, necklaces, and pins account for 70% of all sales, compared with just under 50% at QVC and HSN. "When you're in 50 million homes," says Mark Payne, ValueVision's chief financial officer, "you can put on lots of things with adequate success. Last year QVC did an hour of throw pillows."
