Monday, May 4, 2009
According to the Minneapolis Star-Tribune, new ShopNBC CEO, Keith Stewart, recently held an all-day "State of the Channel" meeting with staff and vendors.
"The economy has nothing to do with ShopNBC's woes," he told the group. "We shot ourselves in the foot. It was all about poor execution. It was all about a backward business model. It's why we haven't delivered more than a dollar of [earnings] in 18 years. And that is going to change."
The ongoing financial woes have been discussed and ranted about ad nauseum by Queen Bea--check out my sage advice for them here, a stock analysis here, an eccentric investor's letter to ShopNBC here, and all the crazy over-paid executive drama here, here, and here. And those are just a sampling!
Stewart, who cut his home shopping teeth at QVC, wants to turn ShopNBC into a "world-championship" company, just like the Yankees. He even got all decked out in Yankee attire because with 26 world championships, "the Yankees represent the kind of excellence Stewart wants at ShopNBC."
While I certainly appreciate his enthusiasm and wholeheartedly agree with him that things need to change quickly in order to stem what he calls a "mass exodus from ShopNBC," by his Yankee logic, they need to be spending more money than all the other shopping channels luring the best hosts and top vendors away from QVC. That's how the Yankees win, right?
As far as behind-the-scenes talent, Stewart seems to be doing just that. Since being promoted to CEO in January, he has "recruited a half-dozen former QVC employees as executives, consultants or board members."
"We really need to get better at customer service," Stewart said. "We really need to get better at answering the phones quickly. We really need to get better at processing reorders quickly. We really need to get better at delivering products intact, on time and ahead of schedule. We really need to get better at product assortment and product mix.
"We're stale," he said. "Let's be honest."
He wants to see more gourmet food and even wants to add cruises (now that's something I haven't seen before!) He also wants his vendors to work with him to lower the average selling price from $225 to $100, which is closer to the QVC and HSN average of about $40.
Stewart seems to be all about setting high goals: double sales and profits every five years, double the customer base in five years, and go international in three to five years. That's a high bar to scale when the economy as a whole is contracting.
And while competitors get half of their sales from about 5 percent of the customer base, ShopNBC gets that same share from 20 percent of its customers. ShopNBC points out that the number of "active customers," those who make more than one purchase, is up 26 percent, and the business has increased its base of new customers by 63 percent in the past year.
Stewart even brought out an old QVC favorite: the letter. You know, too many returns. Since he felt like certain customers--with a 70% return rate--were just "renting" jewelry, he "fired them" as customers. The overall return rate was 33% in 2007, dropped to 23% last year, and Stewart has set a goal of getting that down to 17%.
Has ShopNBC really turned the corner? Will they live up to their new moniker:
Read the entire artile here.