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The money-making narrative of the Home Shopping Network June 10, 2010

Posted by Erik Pontiskoski in Uncategorized.

I read an interesting article in Bloomberg Businessweek on how the Home Shopping Network (HSN) was transformed into a sales machine by CEO Mindy Grossman. (You can check out her profile on Forbes) Here is a short summary of I consider the main points of the article and my  own thoughts on how this relates to monetizing storytelling.

You can find the original full article online here.

Ever since I was a little kid, parodies of TV shopping have brought me lots of joy. Think of all the crappy products and cheap studio

How can anyone take this seriously?

sets – cheesy presentations of everything you can buy from the convenience of your own home. For example, how lazy can you be if you expect to lose weight by wearing a sauna belt around your bum?

I don’t know if HSN was carrying that product when Mindy Grossman took over as CEO, but the company was certainly not doing well. It 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

Serena Williams has her own department in the HSN store

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.

Here is a YouTube clip of Sean ‘Diddy’ Combs pitch his fragrance on HSN. Notice how how he casually drops important scripted lines such as ‘I love that bag, I carry my laptop in it’ and ‘We made this exclusively for you, you cannot find it in any other shop’.

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.



1. Jani - July 8, 2010

Fresh view on tv-shop. And an interesting blog too. Keep up the good work!

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