Behind the Scenes of Home Shopping

The home shopping world is undergoing a makeover.

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Over the past two years, the largest players in the home-shopping business, QVC (owned by Liberty Interactive) and HSN Inc., have both made major inroads into the fashion world, adding marquee brands and famous faces to their rosters. There was a time when selling your brand on a shopping network signified the end of a career; now the medium is a highly coveted retail venue for even the most upscale names.

“Whereas there may have been a stigma associated with shopping over the TV in the past, that stigma is dissipating,” explained Murray Arenson, an equity analyst at Janco Partners. “With the quality of products you’re seeing [on home-shopping networks] and the brands that are being carried, it’s a pretty good indication that these channels are moving a little more upstream in terms of the shopping experience.”

With audiences of 90 million homes for HSN and 166 million for QVC, the consumer reach of TV retailing is hard to beat. And as the walls between high and low fashion continue to dissolve, celebrities, stylists and fashion designers recognize that home-shopping networks can introduce them to Main Street America, the land of immeasurable opportunity.

QVC President and CEO Mike George is responsible for inking the Monahan deal and has also secured exclusive partnerships with Allen Valley and Lori Goldstein, as well as celebrities including Elizabeth Hasselbeck. More big names are on the way, according to executives at The Camuto Group, who said their Jessica Simpson footwear will soon launch on QVC. Although George would not confirm the rumor, the blond songstress is the 2009 spokesperson for QVC’s annual “FFANY Shoes on Sale” event.

“Fashion has been a very important part of our strategy,” said George, who last year facilitated a deal with Mercedes-Benz Fashion Week that included live broadcasts from the catwalks and even QVC’s own runway show. “And we have a goal to meaningfully grow the accessories and footwear categories at a faster rate than apparel.”

The reason is simple, said Doug Rose, QVC’s VP of multichannel programming: The customer is craving a wider variety of footwear brands. He pointed to shoes as one category where the customer wants plenty of options. “There are certain categories in which [the consumer] doesn’t have an appetite for choice, but in footwear, she wants more brands,” he said. “The category is growing, and as it grows, we’ll give it more airtime.”

QVC’s biggest competitor, HSN, has also been padding its fashion offerings since bringing on Mindy Grossman as CEO three years ago. Grossman, a former executive at Nike and Polo Jeans Co., relaunched HSN two years ago to address a savvy, cosmopolitan, engaged consumer, whose average household income is more than $65,000.  “We purged in 2006 and 2007,” she said. “We got out of more than $150 million worth of business. Many of the brands were profitable, but they were not in line with the direction we wanted to take the business.”

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