Behind the Scenes of Home Shopping

Two weeks ago, on the set of QVC’s “PM Style” show, Gretta Monahan demonstrated the new appeal of home shopping. With equal parts fashion-speak and folksiness, the stylist to the stars, “Rachael Ray” regular and co-host of “Tim Gunn’s Guide to Style,” used her perky personality to hawk her namesake footwear line and, more specifically, a peep-toe slingback sandal — in black, gold and muted snakeprint for $44.58.

As the stylist, alongside QVC host Lisa Robertson, interacted with Julie, a caller from New York, Monahan demonstrated the power of live TV, which allows designers to not just promote their products but connect with consumers on an intimate level.

“I picked up the black pair,” Julie said. “I’m so happy that you made this shoe in a wide width.”

“I have wide feet, too!” exclaimed Monahan. “People say, ‘Oh, you’ll break them in.’ But you never do. Your feet hurt every day. I’m so glad we had them for you.”

The pint-size stylist went on to rave about the shoe’s versatility. “You need that go-to shoe in your wardrobe, where you’re not going to say, ‘Does this go with this pant leg? Does this go with this skirt?’”

Robertson then weighed in with an even more practical reason to buy the shoes, for “those weddings where you’re standing all day, waiting in line for the punch.”

After eight minutes of casual conversation, during which hundreds of Gretta slingbacks found new homes across the country, Monahan exited stage left, making way for Joan Rivers to promote her bold beaded necklace, available for two easy payments of $26.97.

Clearly, this is not the stuff of home shopping’s past, when middle-aged men removed stains with magical creams or cut pennies with serious-looking scissors. This is the new generation of digital consumption, where buying fashion with the click of a remote is a socially acceptable — even entertaining — activity, rapidly expanding in both breadth and popularity.

Monahan is a symbol of the sea change. “In the past, designer brands weren’t really working with home-shopping networks. It was all private-label or small brands that couldn’t make it among the giants,” she told Footwear News prior to the broadcast. “But then I started seeing familiar designer names creating special lines for QVC. The consumer demographic [for home shopping] is changing. Designer short runs at H&M and Target have democratized fashion, and consumers are changing their shopping habits.”

Over the past two years, the largest players in the home-shopping business, QVC (owned by Liberty Interactive) and HSN Inc., have both made major inroads into the fashion world, adding marquee brands and famous faces to their rosters. There was a time when selling your brand on a shopping network signified the end of a career; now the medium is a highly coveted retail venue for even the most upscale names.

“Whereas there may have been a stigma associated with shopping over the TV in the past, that stigma is dissipating,” explained Murray Arenson, an equity analyst at Janco Partners. “With the quality of products you’re seeing [on home-shopping networks] and the brands that are being carried, it’s a pretty good indication that these channels are moving a little more upstream in terms of the shopping experience.”

With audiences of 90 million homes for HSN and 166 million for QVC, the consumer reach of TV retailing is hard to beat. And as the walls between high and low fashion continue to dissolve, celebrities, stylists and fashion designers recognize that home-shopping networks can introduce them to Main Street America, the land of immeasurable opportunity.

QVC President and CEO Mike George is responsible for inking the Monahan deal and has also secured exclusive partnerships with Allen Valley and Lori Goldstein, as well as celebrities including Elizabeth Hasselbeck. More big names are on the way, according to executives at The Camuto Group, who said their Jessica Simpson footwear will soon launch on QVC. Although George would not confirm the rumor, the blond songstress is the 2009 spokesperson for QVC’s annual “FFANY Shoes on Sale” event.

“Fashion has been a very important part of our strategy,” said George, who last year facilitated a deal with Mercedes-Benz Fashion Week that included live broadcasts from the catwalks and even QVC’s own runway show. “And we have a goal to meaningfully grow the accessories and footwear categories at a faster rate than apparel.”

The reason is simple, said Doug Rose, QVC’s VP of multichannel programming: The customer is craving a wider variety of footwear brands. He pointed to shoes as one category where the customer wants plenty of options. “There are certain categories in which [the consumer] doesn’t have an appetite for choice, but in footwear, she wants more brands,” he said. “The category is growing, and as it grows, we’ll give it more airtime.”

QVC’s biggest competitor, HSN, has also been padding its fashion offerings since bringing on Mindy Grossman as CEO three years ago. Grossman, a former executive at Nike and Polo Jeans Co., relaunched HSN two years ago to address a savvy, cosmopolitan, engaged consumer, whose average household income is more than $65,000.  “We purged in 2006 and 2007,” she said. “We got out of more than $150 million worth of business. Many of the brands were profitable, but they were not in line with the direction we wanted to take the business.”

Grossman considers July 2007 as the official relaunch of HSN as a lifestyle network, with updated graphics, images and presentations. More important, she said, was new product, from well-known fashion brands and personalities including Sephora, Scoop NYC, Patricia Field and Tina Knowles. Editorial partnerships with magazines such as Elle and Lucky have underscored HSN’s commitment to making a name for itself in the fashion market.

The company’s footwear offering has been elevated, too, and now includes well-known labels such as Beverly Feldman, Vince Camuto and Sam Edelman, as well as proprietary brands such as Hot in Hollywood from stylist Laurie Feltheimer, and Curations from former Scoop NYC owner Stefani Greenfield.

“Accessories is one of our fastest-growing categories, and footwear is trending up,” said Grossman.

This October, HSN will launch a footwear line with designer Carlos Falchi, who already sells takedowns of his thousand-dollar handbags on HSN via the lower-priced Chi collection. The footwear line, also called Chi, will have 12 styles to start, including a snakeskin caged-heel sandal and flat, suede scrunchy boots, retailing from $69 to $200.

“Shoes can be a very strong portion of my business [with HSN],” Falchi said. “She’s already a collector of the bags, and she wants more product.”

Although he’s designed footwear in the past, Falchi has been out of that business for years. He plans to launch footwear in his upscale line for fall ’10, but said that with its large — and loyal — audience, HSN seemed like the best place to reenter the footwear market. In addition to shoes, HSN has asked Falchi to design Chi outerwear, scarves and jewelry, which will be presented during a one-hour Carlos Falchi lifestyle show on the network.

Lauren Pestronk, HSN’s fashion director, said that Chi’s expansion is an example of the network’s designer brand strategy. “Each collection or designer should be a lifestyle,” she said. “A lot of the brands we meet will say, ‘We could never go into that category in a department store because they have separate sections.’ At HSN, their products can all live together. We’ll have the world of Carlos Falchi. There’s already a strong consumer base, so it makes sense to expand into other categories.”

Having a person on hand to sell the product helps, too. Falchi — or someone from his company — is always present on air to help educate the consumer about the product. That strategy is not unique to Falchi, though. On most HSN and QVC programs with fashion merchandise, the brand’s representative is the person who conveys the history and design specifics, which enables the buyer to feel more intimately acquainted with the product than if the seller was a stranger.

That feeling of personal connection is vital, especially in a venue where the audience is so broad. “We are not niche,” acknowledged Grossman, recognizing that being inclusive with both product and presentation style is the key to maximizing sales on a TV network.

Price, on the other hand, has been less prohibitive for HSN. As long as there is value present, there is no limit to how much customers will pay for shoes, said Grossman, citing pairs that near a $500 price tag.

Gene Berkowitz, president of sales at Camuto Group, which sells its Vince Camuto brand on HSN, believes the network is able to push the envelope with price because of its reputation for targeting a “sophisticated, contemporary audience,” while QVC skews more “broad-based.” Berkowitz recently appeared on HSN to promote a $100-plus Vince Camuto shoe and sold 98 percent of the stock in just 45 minutes. “This is a regular-price, legitimate fashion business,” he said.

QVC, on the other hand, offers few, if any, shoes that push the $200 mark. Monahan, for one, isn’t selling footwear on QVC at the same price points she offers at her two luxury Boston-based boutiques. Every style in her value-priced Gretta footwear brand, owned by Brown Shoe Co., retails for less than $100.

Retail consultant Walter Loeb, president of Loeb Associates, said he believes the home-shopping business is “still highly promotional. It’s very dependent on the immediate action by the consumer. Obviously, price is important and plays a big role in getting as much traction as possible for each product. I don’t think that’s ever going to change.”

ShopNBC, which ranks third in size in the home-shopping world, is battling the contracting economy with a revamped strategy that includes lower price points and more inclusivity. “In the past, we leaned more toward the luxury end of the multichannel world,” said Kris Kulesza, SVP of merchandising for ShopNBC. But as consumers abandon luxury retailers for better pricing paradigms, she said, “we’ve been moving to a wider, broader [price] assortment to capture more of the market.”

Kulesza, who worked at HSN for nine years, said ShopNBC’s fashion strategy is still a work in progress, since the company has “never had a significant presence” in the apparel and accessories markets. However, she said she does know that pricing needs to come down in order to gain market share in the home-shopping medium. “Strategically, we need to be in many more categories and businesses to bring in more customers. But we’re still in the midst of hammering out the details of a strategy.”

Elaine Turner sells her handbags and footwear on ShopNBC and confirmed the changing price dynamics at the network. “I have a higher price point than what they’d like to see,” she said, noting that her handbags and shoes, which sell at retailers such as Nordstrom and Piperlime.com, range from $100 to $400. “They were successful with [my line], but now they’re trying to go head-to-head with QVC and HSN and compete more on price.”

Turner plans to launch a less expensive capsule collection for ShopNBC called Escape by Elaine Turner, which has average price points of about $100. “The customer got more value conscious and is looking for ShopNBC to be more price sensitive,” she said. Still, fashion is the driving force behind her best-selling item, a tropical novelty flip-flop.

At QVC, value and comfort must be intrinsic in all fashion items, even in the context of a style show, explained host Robertson before her appearance with Monahan on “PM Style.” “If it’s a beautiful shoe that’s just for sitting down, it’s not a shoe we want to sell.”

In fact, during the Monahan segment that night, more than half the allotted eight minutes was spent touting the footwear’s comfort characteristics.

QVC’s Mike George noted that the network won’t overbuy into fashion footwear at the risk of alienating its core customers. “For the most part, we think fashion needs to be coupled with comfort or technology,” he said, noting that brands such as Birkenstock, Clarks and Ryka remain significant footwear partners for QVC. “We pride ourselves on selling fashion for real women leading real lives.”

Shelly Glasgow, director of product development and merchandising with Birkenstock USA, which has been selling on QVC for 12 years, said the brand is one of QVC’s largest shoe labels. “We are really addressing QVC’s core consumer,” she said.

Clarks has been with QVC for more than a decade, and Steven Mahoney, its VP of sales, said the brand continues to get more prime-time selling slots based on its strong performance.

Even HSN, which moved more aggressively into fashion than its competitors, does a big business with comfort brands Earth and Born, said Grossman, and requires comfort characteristics in its fashion shoes.

Paul Auersperg, CEO of Fortune Footwear, which manufactures more than 10 HSN footwear brands, including Miss Tina, Hot in Hollywood and the forthcoming Chi, said that every shoe he makes is offered in a wide width and runs up to a size 12. Twenty-five percent of purchases in his shoe lines are made in wide widths, he added.

“The national demographic is not 5-foot, 5-inches, 120 pounds,” said Auersperg. “I’ve got a 4-inch bird-cage stiletto in a size 12-wide just waiting for [the HSN customer]. That’s America!”

HSN’s Lauren Pestronk said she believes TV-shopping will only gain fashion credibility. “People used to say, ‘How can you do that to your brand?’ But now we have a list of designers waiting to meet with us. Home shopping is what’s happening now. It’s the in thing to do.”



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