QVC Looks to Buy HSN

QVC's parent company, Liberty Media, wants to make a play for HSN.

In case you didn't already know, here's the quick lowdown on the home shopping family tree: HSN was owned by IAC (i.e. Barry Diller); however, Liberty Media (i.e. John Malone), which owns QVC, had a 30% stake in IAC. So HSN and the Q were kinda sorta related--cousins from an inbred family, perhaps?

Anyway, then IAC spun off HSN into its own company cause Barry Diller's got better things to do now--like buying matchmaking websites in China!

On a recent conference call, Liberty CEO Gregg Maffei said that they are prohibited from making a bid on HSN until May 2010. "But we do believe we are the natural owner at some point of that company. We're the one with the most synergies." Maffei added that in the meantime, QVC has the right to increase its stake in HSN from 30% to 35%.

I don't know why Liberty wants even more of the home shopping biz--even though they are the "natural owner" with the most "synergies." Especially considering QVC's recent lackluster sales--domestic revenue fell 12% last quarter (that's the uber important holiday season too) mostly due to declines in jewelry and apparel. However, QVC President and CEO Mike (King) George swears on his brand new Mini Dell that the fall-off is not because that aren't attracting new customers or that their existing customers are leaving, but due to customers just buying less frequently.

And FYI, Liberty also just bailed out Sirius XM, so I'd be expecting a Sirius XM Radio TSV on the Q soon--only 6 easy payments, y'all!

The Doctor is IN

ShopNBC hired some fancy-schmancy consulting firm-- Segel Associates—to help them figure out why they stink and can’t manage to ever make a profit. In addition to their sage advice, Segel also has their own products that will be launching on ShopNBC. Stuff like the Deep Cover Nail System and the Flavor Magic Gourmet Seasoning Sheets by Real Chef.

Are they serious? Do they really think that this is going to save them? No wonder they can’t make any money!

So, for the umpteenth millionth time I’m going to explain to those overpaid dimwits what they need to do:

1) Brand Identity. No, not of ShopNBC, but of what ShopNBC sells. I have a hard time coming up with very many product lines. Look at QVC and HSN … go on … you can do it … they make lots of … oh, what’s that word … right, money! Both companies have tons of recognizable brands that get customers excited. You know what? I recently went to Sephora, but I didn’t buy anything. You know why? Because I know that I can probably get a better deal on whatever I want at either QVC or HSN.

2) Sales Pitch. Please, please please stop acting like you are selling me a rusted-out used car that you slapped a new coat of paint on. The soft sell works. It might take a little longer, but your sales will be more consistent and your returns will be fewer. Also, make your hosts memorable and human. Other than Charla (love her!), they’re all robo-hosts. Look at the big uproar over Dave King and Kelly Repassy leaving. Customers were upset because they had a vested interest in the hosts. Would you buy from a robo-host or a host that you like?

3) Price Point. Yes, I know that ShopNBC is the luxury shopping channel. The problem is that you can’t live on caviar alone. Get a better mix of lower priced items. Home shopping customers are looking for more bang for their buck, but—especially in today’s economy—the bucks are limited.

4) Target Audience. You would think that most home shopping customers were men by the way ShopNBC was always pushing things like electronics. It’s not that women don’t like electronics. They do. Women are just much more practical about them. They just want it to do what it’s supposed to do simply and not break. Men want it to be the latest and greatest with the most flashy buttons and features (admittedly, women are a little like this with makeup). Men might buy from you once because you have on the biggest, baddest HDTV ever made, but they won’t come back and buy from you again. Men are just fickle like that. Love ‘em and leave ‘em.

5) Community. Where’s your message boards? Do you have a blog? Do your vendors or hosts have blogs? Newsletters, maybe? There are only a scant few product lines on ShopNBC that have a cult following (Isomers and Offerings are two I can think of). Where do these loyal followers meet to chat it up? The QVC message boards, of course!

There’s plenty more that ShopNBC could do to dust off their image and maybe turn a profit, but I don’t get paid enough to tell them. The doctor is OUT.

QVC Sales Slumping

Libery Media, which owns all of QVC and part of HSN (read about that here), reported a 4% increase in total second quarter revenue.

But all is not well in the house that Diamonique built.

The increase is due to a big 14% increase in international revenue--especially Japan. U.S. sales have been less than stellar.

According to an article from rapidtvnews.com, QVC's domestic revenue decreased in the second quarter. "The mix of product sold shifted to the accessories area from the home and jewelry categories. The average selling price increased six per cent from $44.83 to $47.39 while the total number of units shipped declined four per cent to 27.6 million from 28.8 million. Returns as a percent of gross product revenue increased due to product mix shifts and higher average selling prices. QVC.com sales as a percentage of domestic sales grew from 23% in the second quarter of 2007 to 25% in the second quarter of 2008."

So the products shifted, the prices went up, and sales went down. Looks like the only bright spot is the increase in Internet sales. No wonder the hosts have been harping about QVC.com lately.

We're hurting, Q! We can't afford to buy multiple sets Diamonique studs (Oh, snap! Shout out to Lisa Mason--you know how she loves a good stud!) to keep on hand in the gift drawer. I know that you are morally and ethically opposed to clearance sales, but I've heard that they actually work ... why not try having one for once?

Shhhhh ... Keep It Secret Sale

K.I.S.S. SALE

ShopNBC--exploiter of Princess Di--has some sort of K-I-S-S (Keep It Secret Sale) going on right now. Seems like all you do is type KISS into the search bar and the items pop up--no coupon code necessary. Not sure if this is right though. Surely there's more to it.

Hope this helps their tanking sales!

BTW, if you are buying anything from Jewelry Television, try DISC9052 for 20% off (good through July 2). I'm guessing that they're gonna have alot of good deals in the near future considering all the brewhaha going on right now.

Queen Bea loves a bargain even more than she loves fake diamonds!

ShopNBC: Sales Down ... Way Down

So today is Kris Kulesza (formerly of HSN) first day on the job as ShopNBC's Chief Merchant. Per the press release:

Ms. Kulesza brings 23 years of executive retail experience to ShopNBC with nearly a decade in TV shopping and proven success in e-commerce. Her strong merchandising and financial skills have enabled her to execute many examples of innovation throughout her retail career at Hallmark Cards and Home Shopping Network. In her new role, Ms. Kulesza will oversee all aspects of merchandising at ShopNBC. She will lead the Company's key-item merchandizing strategy that aims to balance price point offerings to include first time entry buyers and repeat buyer price points. In addition, she will focus on developing a merchandise mix of high unit volume and sales of fewer SKUs while continuously driving new product offerings. Ms. Kulesza also will focus on vendor and supplier relations to improve gross margins as well as expand the Company's vendor base with new vendor partners.

Could this have anything to do with the big 17% drop in sales in the first quarter for a loss of 18 million dollars? They seem to be blaming this on the electronics customers who buy one thing and never some back. That's cause those customer's are men, folks! No loyalty. Love 'em and leave 'em.

By comparison, the Q was up 5%. It's not just the economy, baby! While I love to window shop at ShopNBC, most of their merchandise is just waaaaay too expensive. I would venture to guess that price point is their biggest problem. Gold is expensive, y'all!