E-Retailers See a Merry X-Mas
QVC, Home Shopping Network, ValueVision and Shop At Home all said the holiday shopping season this year has been strong, despite dire predictions from analysts who warned that warm weather and weaker consumer spending would cause retail sales to fall.
A U.S. Department of Commerce issued this month indicated that retail sales rose 0.6 percent to a seasonally adjusted $229.35 billion last month, following a revised 1.2 percent jump in October. Those numbers contrasted with Wall Street expectations, which predicted a 0.1 percent sales decline.
Overall, electronic retailing in its many forms appears to be strong this year. While the news magazines Time and Newsweek both published cover stories about consumers who are pointing and clicking their way through their holiday shopping, the TV shopping channels say consumers are also watching TV and picking up the phone.
QVC Inc., West Chester, PA, boasted a record sales week from Nov. 30 to Dec. 6, with $109 million in gross sales and 1.6 million orders. That compares with $85.5 million and 1.4 million orders for the same period last year. The company is poised to break its revenue totals of $2.1 billion for last year.
"Christmas has brought a heightened awareness of electronic retailing overall," said Irving Kalick, executive vice president, QVC. "Ultimately, though, there has to be a showing of good product that hopefully attracts enough people to shop."
The Home Shopping Network agrees with that assessment.
"This is finally the year that people are at last comfortable with this sort of transaction, whether it's a Web site or the whole world of electronic commerce," said David Ender, spokesperson for HSN. "It really started in October when we saw a pickup in sales on some of our holiday gift shows."
November was its biggest month in history with $133 million in sales, the first time HSN broke the $100 million mark in monthly sales. It also boasted its largest sales day in history on Oct. 17, when it rang up $24.1 million in sales, driven by the popularity of an Intel Pentium computer.
Although the weather has been exceptionally warm this holiday season, giving consumers another excuse to avoid the mall, Ender said that consumers are turning to TV shopping for the sake of convenience.
"There's this huge time famine in the crush of these weeks leading up the holidays," Ender said. "People are trying to balance their priorities and home shopping is a very convenient way of doing it when you're ready."
Value Vision International Inc., Minneapolis, and Shop At Home Inc., Nashville, also saw increases in sales, although both channels are not as driven by gift sales as are QVC and HSN.
Although it declined to disclose specific dollar figures, the company said its sales have risen in October and November by 30 percent on a per-household basis. The company uses its number of full-time equivalent TV households, about 14 million, as a benchmark.
"We're extremely pleased with our sales results," said Greg Lerman, executive vice president and general manager of television, Value Vision. "But I don't want to quote figures until the end of the quarter."
Shop At Home has also seen strong holiday sales, although its best week in history occurred during the home run derby between baseball players Mark Magwire and Sammy Sosa, who both broke Roger Maris's home run record this season.
"We're not as gift-oriented company as a QVC might be," said Kent P. Lillie, president of Shop At Home. "We also had a great week week that week and were well above last year. It looks to be a very Merry Christmas for us."
He declined to disclose the company's sales figures prior to its quarterly report to shareholders.
subhed: Hot Products
The hottest-selling products vary by shopping channel, but jewelry, candles, computers and telescopes are generally the biggest sellers. Only one company, Shop At Home, is selling the hottest toy this year, the interactive Furby doll, marketed by Tiger Electronics Ltd., Vernon Hills, IL.
"We have our special 'Furby Alerts,'" said Shop At Home's Lillie. "It's a really hot seller for us."
The doll sells for $149 a piece, limited to one a customer.
"Our price is well above retail, but we're paying well above retail for them," Lillie said.
QVC offered Teletubbies dolls for the holidays, while HSN sold Bamm Beanos, a doll resembling Beanie Babies.
During its record-breaking week, QVC sold 108,000 units gross of its 14-carat gold hoop earrings, priced at $40 a set. It also sold 38,000 units of its sterling silver four-piece necklace and bracelet box gift set for $37.50.
QVC also has found success with the George Foreman Grille, a product that is also sold through an infomercial. QVC sold about 30,000 units at $28.11 a piece during its record-breaking week. It sold 90,000 units of its 51-piece magic marker and coloring set for kids at $19.17 a piece. Finally, the channel's 12-piece Winter Wonderland candle collection sold 36,000 units and $44.83, while its Pionex computer sold 16,000 units at about $1,400 a unit.
"We offer about 250 separate products a day," said Terri Heavens, QVC spokesperson. "What we've found is that there wasn't a single sales trend, but tools, toys, computers and jewelry all sold well."
Meanwhile, HSN has seen strong November sales with its 14-carat gold pendant shaped like an angel, selling 25,000 units for total sales of about $900,000 (HSN reports net sales of products, which includes canceled orders and returns.)
It also sold $5.1 million in 400 megahertz computers with a 17-inch monitor. The network sold 20,000 telescopes at $89 a piece during November.
Meanwhile, Value Vision has seen strong sales in outerwear, bucking the downward trend seen by department stores during the exceptionally warm weather this year.
"Our customers are buying product not so much as gifts, as for themselves to look good for the holidays," Value Vision's Lerman said. While jewelry is also popular for the channel, it also sells faux furs priced between $349 and $599 and leather coats for $149. Among its more popular items are a feather and down comforter set for $99, a Smith-Corona cordless phone for $59.98.