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HSN Breaks Channel Barriers


HSN may have been a pioneer in using TV as a shopping channel, but the retailer is using emerging technology to become a much broader enterprise. As HSN CEO Mindy Grossman detailed during a keynote session at last week’s Internet Retailer conference in Chicago, this is not your mother’s HSN. Not by a long shot.

“We’re engaging consumers away from TV,” said Grossman. “There is a dramatic transformation of the consumer. They are being reshaped by technology, social networks and mobility.”

In response, Grossman said HSN no longer uses the word “channel,” but instead breaks down internal silos to offer consumers a boundary-less experience.

Delivering Customer Experience Across all Screens

“HSN offers a 360-degree network of experiences,” said Grossman. “We bring personalities, brands and products to life and engage the audience in a significant way. The differentiator is experience.”

A crucial part of providing this full experience to consumers is to put them in the center of what Grossman termed a “four-screen world” consisting of TV shopping, digital, mobile and TV entertainment media.

“We bring the story to life,” said Grossman. “We take content and real-time customer interaction and chat to provide the right content at the right moment.”

Grossman said HSN currently measures sales by the minutes on TV and wants to perform the same measurements for its digital sales in order to seamless offer curated, expanded assortments. (HSN’s overall customer base is 84% female and approaches 100% female in some categories.)

A Moveable Shopping Feast

Despite assumptions by some observers that the typical HSN shopper is an older, working class Caucasian who likes to shop via TV, Grossman said the average annual income of HSN customers is $69,000 and they are ethnically diverse, use all channels and are getting younger. For these reasons, HSN is taking a particular focus on mobile sales.

“We develop mobile first,” said Grossman. “More than 10% of our business is currently mobile. We recorded $167 million of mobile sales during 2012 and saw a 78% increase in mobile sales during the first quarter of this year. Mobile consumers are the youngest, most affluent and most diverse consumers.”

That’s Entertainment

Grossman said modern retailers are now longer no just competing with each other but with other entertainment options consumers have, such as video games, movies and TV shows. To stay competitive in this new entertainment-centric environment, HSN attempts to blend the lines between entertainment and retail.

“Events increase engagement,” said Grossman. “We will run a 24-hour food event or jewelry event. It creates an emotional trigger inside the consumer’s head. Social sales significantly increase during events, as do digital traffic and engagement.”

For example, HSN sells CDs while music artists such as Rod Stewart perform live from HSN studios. A new feature called HSN Lounge offers special live streaming of these musical events.

“Rod Stewart took live photos in the HSN Lounge and uploaded them to Instagram and Facebook,” said Grossman. “He also performed an extra song that was only available on Facebook and digitally. We sold 30,000 CDs in one hour.”

Grossman said HSN also uses Pinterest to curate products that tie into films and runs interactive “mega events” that sell promotional and themed goods in conjunction with the release of a new movie that include live appearances by Hollywood stars.

Games are Serious Business

HSN’s efforts to provide a complete entertainment experience also extend to games.

“Gamification is not just playing games,” cautioned Grossman. “Women age 30-45 are the largest users of casual games. Game play and shopping are actually very similar. There is the thrill of the hunt, achievement and reward sharing.”

HSN offers the HSN Arcade, which Grossman said is the first retail gaming platform. Consumers can play casual games while they watch live TV and engage with other omni-channel content.

HSN Arcade also lets customers take quizzes that help reveal their personal style preferences and see how their votes compare to the votes of other customers. In addition to providing engagement and reward, the quizzes provide HSN with a wealth of data they can use to refine and personalize assortments and promotions.

“HSN Arcade has had 128 million plays,” said Grossman. “Users visit the site twice as often and spend twice as much money. There are 700,000 regular users.”

HSN is not standing still with these transformational efforts. Grossman concluded her presentation by saying the retailer is trying to build an enterprise view of the customer where it can use analytics to anticipate exactly what a customer will want. HSN has been undergoing a systems transformation with IBM for the past three years and will launch the first phase of its enterprise view program this summer.

“Be as personal as you can,” advised Grossman. “Create passionate evangelists.”

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