* * *
What's the best time to be on the air? Network prime time is good, meaning weekdays, 8 p.m to 11 p.m. Saturday morning is better, which is sort of surprising. But that's when working moms are home and the only other option is watching cartoons with the kids.
* * *
What if I sell $100,000 worth of wick-wacks to QVC and get on the air a whole hour on Saturday morning, but nobody calls? First of all, you'd be gone long before the hour was up. Remember the bar? If the bar's not wiggling, the director tells the host, and the host yanks the product, pronto. But that's beside the point. You're asking what happens if the inventory doesn't go anywhere. Or maybe it goes, and a week later it comes back. (Returns in the industry are notoriously high.)
Understand, the home-shopping channels try hard to avoid those kinds of problems, and they do a pretty good job. The knowledge they've acquired about their customers and their buying habits is vast, sophisticated, up-to-the-minute, and ever expanding (and all the more valuable for being proprietary; they rarely sell lists, and they never share with vendors).
But sometimes they're wrong. In the past, when home shopping was mainly for disposing of closeouts, the channels took the hit. HSN claims that it still does, though some vendors report otherwise. But at QVC, more often than not, the inventory risk belongs to the vendor. Meaning that if QVC can't sell your wick-wacks, instead of getting paid, you get your wick-wacks back. Ordinarily, within two weeks, thanks to QVC's advanced inventory-control system. (If you ever run into Joe Hoeflich, owner of Belle Neckwear, in New York City, ask him what he did with all the Elvis postage-stamp ties he packaged specially for QVC; they bombed during a single appearance last October and never got another chance.)
"What would you do if you sold only 10 pieces out of 800?" is the question you need to ask yourself when you start thinking about home shopping, says Marybeth Hanson. "Would it put you out of business? Then don't do it."
* * *
Are the terms negotiable? Of course. Plenty of people do deals that don't look anything at all like the model we just described. For example, Harvey Tauman's company, Hydron Technologies, makes a line of skin-care products involving a patented process that took years of research and development to perfect. When the time came, Tauman had no idea how to bring his products to market. So he approached Victor Grillo, president of Direct to Retail, a Natick, Mass., company that specializes in moving products up the retail ladder, from direct marketing to catalogs to store shelves. Grillo produced a series of direct-response television ads with actress Cheryl Ladd, but the results were disappointing. Then, in May 1993, Grillo got Hydron Plus (a hand cream) 15 minutes on the QVC Sampler Hour, with Tauman himself touting the product.
* * *
Tauman went on television? Why not? You see plenty of celebrities on home-shopping channels these days - Vanna White does shoes, Bobby Unser does engine treatments, Paul Prudhomme does cookbooks - but you see lots of regular folks, too. (Did anyone catch the basket weaver from Peterboro Baskets?) It's almost never just the host and the product -- that would be dull. In Hydron's case, nobody could recite the gospel with more conviction than the charismatic Tauman.
So Tauman went on the air and he did a beautiful job. "In minutes we sold out. Then I was on again the following month with three times as much, and that sold out. And the following month with much more than that, and that sold out. Then people all over the country started raving about the product."
Then last summer QVC came to Tauman and said, "We'd like to make an exclusive deal with you. We would like to develop a brand. We would like to do infomercials with it on various channels. We would like to bring the product to retail at the appropriate time and the appropriate places and really be involved major-league in developing the brand and making these things happen."
Both parties have since signed a comprehensive two-year agreement granting QVC exclusive rights to market Hydron Technologies consumer products not only on home-shopping channels in North, Central, and South America but also in direct-response TV advertisements and infomercials, which QVC plans to produce itself through a new division called QVC Direct. Eventually, QVC and Direct to Retail will join forces to bring the products to stores. Moreover, Hydron granted QVC stock options that kick in once sales goals are met.
So far, so good. Hydron's various products (all nine of them) have consistently sold out during regular 20-minute appearances on QVC. A Hydron Hour debuted at the end of April. Anyone who misses the show (or needs a refill) can order direct from QVC anytime by calling the toll-free number printed on the Hydron box.
* * *
Are partnerships like that common? Not yet, but maybe one day they will be. If the industry has its way, then as home shopping evolves, vendors and distributors will develop ever closer ties. "There are thousands of people in small companies out there who have great products but don't know how to bring them to market," says QVC's Briggs. "They don't have the capital, the know-how, the contacts. They don't know what to do with them. We want to be known as the place to bring those products."
* * *
How else will home shopping change? There will be more choices, for one. Meaning that if what we want is something to read, not a singing teddy bear, as consumers we'll have the option of choosing a channel that sells only books. And it may be coming sooner rather than later, with 500-channel cable systems. But step two, true interactivity, is when things will really start to get interesting. Having the freedom, say, to punch on the TV after work (or when the baby's napping), call up Books in Print, scan the best-seller list, maybe read a review or two, and order the book we want for delivery the next day (or better yet, download it and print it at home).
* * *
Sounds like a video catalog. Exactly. A lot of experts say the best indicator of the future of home shopping is the growth history of the $52-billion catalog industry. Right now the home-shopping channels are wrestling with the same issues of trust (consumers don't have confidence in them yet) and convenience (it's still lacking) that catalogs worked so hard to overcome. When home shopping catches up - and that's as much a matter of technology as anything else - then the market could explode.
