Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, November 21, 1993 TAG: 9311190015
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY
DATELINE: LENGTH: Medium
In what was actually a long commercial, chefs at famous restaurants prepared eye frying. By the time the $239.95 price flashed onto the screen, I was ready to buy. I didn't, but I still have the 800 number in my daybook. I own jewelry that friends bought from QVC and Home Shopping
Club, but I havenever bought anything from television.
In fact, only 6 percent of America shops by television, according to a study by Deloitte & Touche, a national marketing consultant. Another study says 5 percent. It's a teensy bit of total retail sales.
Research by Management Horizons, a division of accountants Price Waterhouse, says TV retail _ including infomercials and QVC and Home Shopping Network _ amounts to 0.2 percent, or $3 billion annually.
So, why has it gotten so much attention recently?
There were many answers offered by speakers at the "Home Shopping Revolution"conference staged by the International Quality & Productivity Center in New York.
Television shopping is growing as traditional retail stores are losing ground.
From 1988 to 1992, TV shopping increased 30 percent (adjusted for inflation) while general retail declined 3 percent, said Nick Holland of Ulin & Holland market researchers.
After a decade in which many companies dove into TV selling but most drowned,QVC and HSN are left as the major players. But there's promise of more to come soon. R.H. Macy & Co. plans "TV Macy" next year; Sears will start infomercials for special products and in-store items.
Respected names like Macy "legitimize" television shopping and help it leap beyond the image of cubic zirconia rings, said Isaac Lagnado.
Lagado, formerly with the International Council of Shopping Centers and now a principal in a New York consulting firm of Tactical Retail Solutions Inc., has a long list of reasons why television shopping is a success.
He said it offers value "perceived or real," has a changing mix of product, offers brand names, allows demonstration of products, entertains with its host and celebrity guests, gives 24-hour access and provides spontaneous product testimonials when viewers call in to chat.
Shoppers get all this on television while they're getting bored with the generic stores and lookalike merchandise in malls, worried about the violence at some shopping centers and becoming more comfortable with various forms of electronic shopping.
Besides, TV selling doesn't eliminate other retail forms but enhances them, said John Glenn Holchin, vice president of marketing for Yves Rocher USA.
Rocher, the longest-running and most successful cosmetics company airing on QVC, is a French company that boasts 20 million customers through its television sales shows, 1,000 boutiques and a mail catalog.
"It's an attractive vehicle for people who want to reach the world," Holchin said.
While television selling might not replace the traditional retail format, it can have a major effect on it, said Judith Owens, retailing planning consultant with the World Gold Council.
Another major reason deals with the relationship between retailers and manufacturers of goods.
Owens said retailers have pushed suppliers as far as they can be pushed to cut their wholesale prices so retailers can cut theirs.
Because manufacturers are tired of being pushed by retailers to cut prices, they might turn to TV to sell to consumers directly.
"TV shows don't gouge vendors and they eat returns," said Owens.
They might also be drawn to the sales medium because of the quick response of television sales.
In a few minutes, a company can learn if its product is a success or not.
TV shopping sales per minute are incredible, as proven by figures thrown out by Rick Korn, director of special markets for Home Shopping Network.
Korn said Joe DiMaggio sold $1 million worth of $4,000 bats in 15 minutes on HSN. He said Ivana Trump's clothing lines have logged sales of $69,000 per minute.
HSN, which has an order-filling center in Salem, continues to see the scope of products and participants grow, Korn said.
At the end of the month, for example, General Motors and Car and Track Magazine are expected to launch a 24-hour auto sales network.
"It's now cool to say you're shopping on television," said Keith Halford, a founder of QVC and now president of ViaTV, a new shopping network for retailers, manufacturers and catalogers.
TV buyers used to remain in the closet.
Halford recalled that in one QVC survey of people who had bought from television more than once, 24 percent denied ever making such purchases.
QVC had the records of when and what those people bought, though, he said.
Sandra Brown Kelly is a Roanoke Time & World-News business writer who covers retail business but hasn't bought from TV - yet.
by CNB