Video Shopping Comes of Age

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\"\"Online, exacerbated by Amazon, may be destroying the business model of many retailers. But ask most shoppers and they will tell you e-commerce sites do not excel at discovery, engagement or experience, the key differentiators in a world where product has become commoditized. Enter video shopping, which holds the key to restoring retail mojo.

Video is the media channel for millennials and GenZ. According to eMarketer, more than 90 percent of U.S. internet users ages 12-34 are digital video viewers. Given the overall trends in e-commerce and video’s role as the prime driver of content consumption at home, work and via mobile, home shopping networks—Evine Live, HSN and QVC (a subsidiary of Liberty Interactive)—have the institutional proficiency in creating compelling live shopping experiences with curated product. What’s more, they can read and react real-time to consumer data analytics. These skills, garnered over 30+ years of operating TV/cable shopping channels positions Evine, HSN and QVC to meet the demands of video watchers, aka video shoppers.

Marketing in 2017 is a new animal. Every digital touchpoint requires consideration. What a brand communicates on Facebook is different than on Instagram, Snapchat, Pinterest, YouTube, etc. This is not about putting a “buy” button everywhere, but about creating engaging content and a seamless path to purchase. Home shopping networks get this. Their form of selling engages the viewer, tells a brand story, interacts with, and responds to the viewer. In other words, these retail platforms allow for the creation of real relationships and emotional connections. It’s powerful experiential retail.

New Players in Town

Last September, Evine announced that Tommy Hilfiger, G-III’s CEO Morris Goldfarb and entertainment executive Tommy Mottola, invested $10 million. Hilfiger and Goldfarb are coming in as strategic advisors, believing in the business model of home shopping and the incredible jumpstart it provides to video shopping. And, quid-pro-quo, Evine offers GIII and Hilfiger a new distribution channel. In fact, many wholesale brands are likely to take another look at Evine, HSN and QVC as an alternative to brick and mortar, given the promotional cadence, brand destruction and sheer contraction of the department store channel. The home shopping retail segment offers brand-building distribution channels via live video shopping on TV, digital, mobile and video platforms. This model provides a welcome degree of insulation from today’s marketplace disruption.

Brands and personalities with exclusive products are key to driving traffic and are the secret sauce of the home shopping business model. Exclusive brands/products account for more than 70 percent of assortments at home shopping retailers, simultaneously pulling shoppers in, reducing the need for excessive promotional pricing/price matching, and creating consumer loyalty.

This heretofore underappreciated channel is leap years ahead of digital retailers in optimizing a live selling platform. Evine, HSN and QVC developed metrics such as dollars per minute (DPM) in the formative stages of the home shopping industry, and have honed live selling skills that enhance sales while deepening consumer relationships with brands, brand founders/representatives and their in-house selling staff (celebrities, themselves). These three retailers know how to use live data to turn viewers into buyers, a mix of art and science refined over 30+ years. The home shopping networks are well positioned to be the next wave of success in a fairly dismal looking retail landscape.

The Competitive Advantages for the Live Selling Platform

  • A differentiated retail model. The way home shopping retailers go to market and what they bring to the market are the differentiators that create competitive advantages. Product and brand founders, as well as seasoned selling professionals, engage with the audience and tell brand stories. Moreover, this form of selling builds brands via developing consumer relationships, and its proprietary exclusives and unique products not readily available elsewhere mitigate comparison-shopping and price seeking.

Live video is how direct-to-consumer “DTC” retail began and this oligopoly developed the science of live shopping. The virtuous marketing and sales cycle spans television, online, mobile and social media, and merchandise categories include jewelry and watches, home and consumer electronics, beauty products, and fashion and accessories. QVC, as the largest home shopping operator, has access to approximately 107 million cable and satellite television homes. All three offer products through live streaming at their e-commerce websites.

  • Technology is changing everything. Consumer behavior and expectations are radically different from those of five years ago. Amazon has created new efficiency expectations along with its endless aisles and free two-day shipping. However, a persistent complaint about most e-commerce sites is the static page displays (really a digital catalog) and lack of engagement. Video solves for both. Video is the core media channel for millennials and GenZ and more than 90 percent of US internet users ages 12-34 are digital video viewers. Given the overall trends in e-commerce, and video’s role as the prime driver of content consumption at home, work and via mobile, it’s only a matter of time before video shopping will be de rigueur. • Validation of video commerce in the commerce ecosystem. Something magical happens when live retailing relationships are built: personal connections are made. Consumers are ravenous for relationships with brands. Evine, HSN and QVC create destination programming that drive superior return visits and build customer loyalty. The three home shopping retailers are vastly ahead of most brick-and-mortar and online retailers in making retail an experience, with video content that can live digitally, whether it be on a TV, iPhone, tablet or watch. For instance, HSN created its first shoppable video, which allowed customers to view and purchase items as part of the exclusive launch of Serena Williams\’ fall 2016 runway collection during Fashion Week. This shoppable experience was featured on and and was streamed across multiple platforms, including
  • Video shopping is the next leg of commerce. Amazon’s Style Code Live is adding credibility to video shopping for a younger audience; however, it lacks (to date) the 360-degree experiential relationship model of the three established networks, nor does Amazon have 24/7 round-the-clock programming. Home shopping networks have been in the business of live digital video commerce for decades, know the video medium, its tools, the business model and the KPIs.

Amazon is in the early stages of developing a corporate culture that understands the emotional connection consumers have with the brands they purchase. It has created a new level of ease in checkout and product availability, but that isn’t the eureka moment you see time and time again on any of the home shopping networks.

  • Video Investments. At Goldman Sachs 23rd Global Retail Conference in September 2016, the CEO of QVC, Michael George, spoke about recent investments in video programming and live streaming that now enable very low-cost propagation of video content for multiple formats. George mentioned Beauty iQ, “which is largely leveraging existing programming and just repackaging that in an interesting way with a little bit of incremental content and making that available as a digital experience. The incremental costs are de minimis. Facebook Live is another platform that brings a live digital experience to many different viewers. That\’s become a kind of very interesting capability in the last several months, along with over-the-top viewing on a number of different platforms. There are so many ways we can take our video experience and bring it to life in relevant new technologies.”

In sum, video content distributed through alternative channels can appeal to existing customers and attract new shoppers. Home shopping operators work with their brand partners to leverage their social networks throughout the virtuous selling cycle as well during product creation and launch. HSN’s CEO Mindy Grossman commented during a November 2016 investor call, “We continue to enhance our content, including additional image and video capabilities. We are currently developing our next-generation mobile app, which will enable us to offer a highly personalized and engaging experience based on customer profile, preferences and usage.”

Video is the new 1-2-1 shopping!



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