Soup-To-Nuts Podcast: The marketing potential of home shopping television
That said the channel should not be entered lightly as the competition is stiff and there are a few pitfalls and hurdles to navigate to succeed, according to Amy Goldsmith and Paul Pruett, who work together at the Praim Group, which helps brands find a foothold in the confections category.
“Based on our experience, [television home shopping] is a very different and unique animal as compared to other channels,” said Pruett, who is the CEO of both the Praim Group and snack manufacturer Mediterra.
He explained on this episode of FoodNavigator-USA’s Soup-To-Nuts podcast that the finite amount of time afforded companies on the air means that brands need precise and concise messaging. But on the upside there is a visual component that is a “big plus” because it allows brands to demonstrate how their product works or show-off its texture or taste.
“These types of channels for have been a very beneficial experience in either launching new brands or bolstering existing brands via new product extensions,” he said. “But, of course, there are pros and cons.”
View home shopping as marketing, not sales
One of the biggest cons is that companies going on home shopping television will not make millions of dollars in sales. In fact, to hear Goldsmith and Pruett tell it, brands that hit the air are lucky to sell enough to break even on the production costs.
But Pruett was quick to clarify that less than stellar sales is only a con if companies look at the channel primarily as a sales venue. Rather, he suggests that firms should think of the home shopping retail channel as a marketing venture – not a sales one.
“I look at it as a marketing expense, not necessarily in the sales bucket,” he said. “What it can do is, if your brand is trying to increase its shelf presence at the retail level or build other distribution in other more traditional means, it can help build a story for your brand because you have the time to tell the brand’s story and explain the genesis of the brand, which again no other sort of sales channel can offer.”
From that perspective, Goldsmith adds that being on HSN, QVC or Evine elevates consumers’ perception of a brand, which can benefit long term sales.
“If we say to store or a retail buyer, or if you say to a consumer, oh, this is as seen on TV, they do perceive it as important or as credible. So, it adds value to the brand,” she said.
The segment also has use beyond its live streaming, Pruett and Goldsmith point out. They note that HSN, QVC and Evine will link to a video of the segment on their webpages for as long as the product is selling, and brands also can embed the video on their websites to help tell their story.
“I’ve seen many vendors at trade shows within their booth have a rotating screen which shows their airing on a loop” as a way to say “we are legitimate, we are here to stay, we have arrived,” Pruett said.
Factors to consider
Companies interested in marketing through home shopping television should carefully consider their options to find the best fit, and brace for competition.
First they should consider location, and how easy or difficult it would be to travel to QVC in Pennsylvania, HSN in Florida or Evine in Minneapolis, for the training and taping, Goldsmith said.
She adds that some channels are more stringent and others more lenient in terms of companies hitting their sales figures.
“HSN tends to be a little bit more forgiving [than QVC], so if you don’t necessarily hit your numbers, but you do a good job, they are likely to bring you back on again … whereas QVC is more cut throat,” she said.
Pruett also points out that deciding which television channel to team up with also will depend on a company’s operational and logistical capabilities. He explained that because television shopping outlets require all the inventory to be in place, ready to ship, before a company goes on the air, a company need to determine how much money it can tolerate having tied up in product, and how much risk it wants to take on the chance it can’t sell everything in the eight to 12 minutes of air time it has on the channel.
There are some strategies for managing this risk and the potential for leftover inventory, Pruett said. For example, he recommends companies ship the product from their own warehouses to save shipping product to and from the television channel’s warehouse if there are leftovers.
Another factor that Pruett says companies need to consider related to inventory and shipping is the size of their product. He explains, if something is too heavy, such as a beverage, or too bulky, like pillows, the economies of scale won’t work out in the company’s favor to sell them on television and ship them.
Identify a spokesperson
If a company has gotten this far in the evaluation process and still thinks going on a home shopping television show is a good idea, the leadership needs to consider who will represent the brand on air – one of them, or a hired spokesperson.
Goldsmith says deciding on the star of the show depends a lot on their comfort level in front of the camera and ability to stay focused in a chaotic situation.
And while she encourages someone from the company to do the talking because they have skin in the game, she acknowledges that sometimes that isn’t possible. In that case, brands can work with the channel to find someone local to represent them on the air. This choice can also save the company money if they don’t live near the television channel headquarters.
Despite the high stakes and multitude of factors to consider when evaluating the potential of television home shopping channels, Pruett and Goldsmith agree that the outlets can be worth the hassles and stress.
“It is a lot of fun, and it really is incredible when you get off the air and you see all these sales coming and you are on at some randomly strange time and think no one in the world can possibly be watching and thousands of orders come in – you just scratch you head,” Goldsmith said. “It is really super incredible to watch.”