Home shopping sales up in Q1

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Home shopping sales up in Q1
Home shopping sales up in Q1

Home shopping networks QVC and HSN are seeing an upswing in sales as more of their business moves to e-commerce from the traditional television-based pitchman model.

In the first quarter of this year, both brands performed better than expected. Sales at QVC increased 11% to $1.8 billion, while HSN's net sales grew 9% to $683.2 million.

“We are extremely pleased with our first-quarter results,” said Judy Schmeling, HSN's CFO and EVP, on her network's quarterly earnings call. “We… believe that we are well positioned to take advantage of our opportunity to lead in interactive retail today and in the future.”

QVC's president and CEO Mike George expressed similar sentiments on its earnings call, saying, “QVC is emerging from the downturn showing strong, consistent sales growth.”

ShopNBC will release its fiscal first-quarter earnings May 19. A company spokesperson told DMNews the network is in a media blackout until that date.

Both QVC and HSN saw their share of online sales grow to nearly one-third of overall US business during the first quarter. QVC.com's share of overall domestic sales grew 3%, reaching $371 million and a 32% share of all US business. HSN.com's sales increased 15% over the prior year, accounting for 31.6% of HSN's total sales. That percentage was up from 30% in the prior year.

“It's hard to argue with the audience when the audience is migrating to online,” said Jonathan Shapiro, CEO of MediaWhiz, an online performance marketing agency, and the former president of Lillian Vernon.

“HSN and QVC are both great brands with a population that understands the value they can get from them. The inexorable march to the Internet is showing up in their businesses.”

Sucharita Mulparu, a retail analyst at Forrester Research, said that first-quarter earnings were bound to outshine last year's numbers because the country was in the throws of the recession at that point. However, she credited the shop-from-home networks for taking the notable parts of their television broadcasts and extending them

to their e-commerce sites.

“I think there's the factor that most retailers are growing now because they had an abominable 2009,” she said. “More people are shopping from the web, and QVC and HSN have videos on their sites. Everything that is so compelling about the TV experience, they're able to extend to the Web. Plus, QVC and HSN do a good job of persuading people to purchase on impulse without a specific notion of what they want.”

However, Zain Raj, CEO of Euro RSCG Discovery for North America and global practice leader for retail brands, said the sales increases at both companies is a reflection of societal trends favoring e-commerce and shop-from-home technologies.

“I think what you're seeing is a consumer and a human trend,” he said. “As a society, we're suffering from an epidemic I call ‘time starvation.' If you look at the research, the biggest issue is that people don't have enough time. Consumers are starting to find ways of simplifying and accelerating the ways they solve their problems: Shopping is one of them.”

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