Bill Brand is talking about the power of celebrity partnerships, such as the ones HSN has with stars like Wendy Williams and Melissa McCarthy, when he pauses mid-sentence. His eyes dart from a monitor on the wall to a TV to yet a third screen. Brand quickly sizes up the data: It’s a real-time graph showing how many consumers plan to order the featured product on-air right now, fish from Legal Sea Foods, and how many customers are talking to operators in the call center. Then Brand’s back to watching the news on CNN — it’s showing when the first total solar eclipse in a century can be viewed in each part of the country.
“Should we go up to the roof? It’ll be fun,” he said. “See, things happen here in St. Petersburg.”
Indeed they do.
And Brand has been at the center of many of them. Since arriving at HSN’s Florida headquarters 11 years ago to work alongside CEO Mindy Grossman, who left this spring to run Weight Watchers, he’s been working hard to overhaul the brand. Now at the top, Brand clearly has much to focus on, particularly since it was announced this summer that rival QVC Inc. would buy HSN for roughly $2.1 billion.
“It’s exciting right now. We will be part of this $14 billion retail powerhouse that is No. 3 for digital sales only behind Amazon and Walmart,” said the company president, Bill Brand. “When you think of that leverage and that scale, what can we do together? That’s a big part of our focus right now: working on the integration and making it as smooth as possible for our team, our business and, ultimately, for the customer.”
“The customer wants more and deserves more. She wants to understand who is designing the shoe, why a trend is important and how it will work for her lifestyle. We make it easy for our customer to make an informed purchase that they’ll be excited about,” said Vanessa Dusold, SVP of merchandising, apparel & accessories at HSN. “HSN leverages many platforms to tell each brand’s unique story. With two-thirds of our customers shopping on line, content is critical to our business.”
To that end, Brand is also focused on several corporate initiatives, namely improving its storytelling and technology platforms (HSN Now launched this month). Additionally, he wants to expand its American Dreams series, which is similar to “Shark Tank” and supports small-business owners, many of whom embody the spirit of HSN’s founders.
“American Dreams marries our heritage with our future,” Brand said. “We are all about storytelling, all about supporting entrepreneurs, and ultimately, we are making our country stronger for it.”
Here, Brand sounds off on HSN history and the big actions that will define its future.
The HSN transformation
“What needed to happen when Mindy arrived here 11 years ago, she realized a lot needed to be done to transform HSN. It started with the product. We needed to freshen up the portfolio and bring in brands that our current customers we know would love, and would also be an acquisition driver for the business, to make our customer file as healthy as it can be. So we leveraged our footwear, beauty and kitchen categories because we knew our great loyal customers would come in and stay shopping with us when they realized the experience exceeded their expectations. It took a massive amount of work. The first phase took several years, the clearing out of product, then introducing new brands to the business, new tag lines and eventually new partnerships.”
Impact of technology
“The world of technology was something none of us could have predicted 10 or 11 years ago. IPhones hadn’t come out until ’07, then it would be three years before the iPad. Our digital business was in the low double digits, around 12 percent; today it’s nearly 50 percent. Our female consumer was adopting these new technologies. What we needed to do was, yes, get the product right but also have a flawless experience. That was the investment we made in digital, in mobile, and what we continue to invest in is trying to be as innovative as possible.”
Changes at retail
“It’s this whole story of technology. The biggest change that everyone is talking about is in creating experiences. You’ve gone through that phase where everyone was focused on lifestyle. Now it is experience. What is unique about us is that experience is something we’ve always invested in. Experience is what builds loyalty. We must create this community where this customer is coming in, exploring, discovering and, ultimately, building that emotional bond with us. She is doing that today with experiences more than ever. It’s no longer about product sitting on a shelf. That’s why our brick-and-mortar competitors are trying to transform what a store looks like. We have an ability to change our store every day on TV and then across every platform.”
Where retail is headed
“As a content-driven retailer, what more should we be doing? It’s not going to end with your mobile phone, it’s not going to end with the iPad. Where is it going? And what do we need to do to capture that? What does social commerce look like? What does the world of discovery look like if women are watching TV differently? Perhaps they are watching less live TV. How do we continue to stay as relevant as possible? That’s where our expertise as a content-driven retailer sets us apart. We can play on every platform because we own our content, and ultimately, we own the back-end experience of flawless checkout and delivery. So what do we start to do with that? We own TV. We own digital. What’s the future of retail in other dimensions? That’s what we have to continue to explore.”
Drive to experiment
“If we’re looking at a future where people might not have cable TV, how do we stay relevant? That’s where our investment in Roku, having four or five channels there, has helped. That’s where playing with YouTube comes in. That’s why we are a beta site for Facebook when it comes to anything they are doing in commerce. For YouTube, we are creating a new experience called HSN Now, which launched in the last few weeks. It is the Netflix of shopping. It’s content, it’s product, it’s taking the best of our storytelling and positioning it in a new way for consumers to discover us. Where else can Serena Williams, Sam Edelman or Wolfgang Puck come to life?”
“We know two-thirds of our customers have an Amazon Prime account. But they are not buying our exclusive, unique, proprietary products there. They are buying Tide and lightbulbs, and they are buying commodity items. For us, it’s not about going head-to-head with them, it’s: How do we own the space of content and emotion? That’s what’s going to build loyalty.”
“I’ve never spoken about trying to go younger. I believe there is a much bigger group of women in our demo of 40-plus years of age that are underserved in retail. We’re continuing to focus and deliver experiences that are right for them — if that’s beauty, fashion, things for their home, I want to own that woman because her share of wallet is higher, her spend is higher. And it is the fastest-growing demographic. There are millions more women who look like our consumers who don’t know we are for them. They haven’t discovered our great product, our great experience, yet. Our job on the digital side is: How do we mine that?”
Working with celebrities
“You have to be selective on both sides. It’s a relationship, a true partnership, and you need to be clear upfront on expectations. They need to show up for rehearsals before shows, and they do have to prepare. We look for that commitment and passion. The other piece that has changed more than ever over the last 10 years, as we’ve grown our business and our brand, is that we can ask for more in return. We ask, how do you leverage your fan base to support HSN? Many of them are more proud than ever when they see the experience and they understand the level of service and excellence, and they are able to share that with their fans in a credible and meaningful way.”
The big celebrity hits
“Keith Urban has been pretty amazing. We were initially talking to his manager about fragrance. We said, ‘Have you thought of guitars?’ In that conversation, it became this learn-to-play idea. Keith didn’t want kids to learn to play guitar through Guitar Hero. He wanted them to touch and feel the real thing, and he got passionate about that, and it grew into a great brand for us.”
Cultivating brand loyalty
“It’s not about brand loyalty; it’s got to be loyalty to the experience. It’s one thing to say, ‘I admire that shoe.’ It’s another thing to understand what goes into making that shoe, what was the design of that shoe. What is unique and special from the designer’s point of view? That’s when a Sam Edelman or a Steve Madden is able to be here and share with customers. When you get product, story and storyteller together, that is memorable — and that’s what you can’t get anywhere else.”