From Blue Lipstick to Facebook Live, Home Shopping Networks Refine Their Pitch

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A QVC logo is displayed at the QVC Studio Park in West Chester, Pennsylvania
A QVC logo is displayed at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.
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By Melissa Fares
WEST CHESTER, Pa. (Reuters)

HSN, once known as the Home Shopping Network, is getting an image makeover

A U.S. television network where shoppers can buy everything from electronics to kitchen gadgets, HSN is overhauling its lineup to offer more beauty products while adding streamed video content to win over shoppers without cable TV.

 

Host Sharon Faetsch sells products live on the air at the QVC Studio Park in West Chester, Pennsylvania
Host Sharon Faetsch sells products live on the air at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

A division of Qurate Retail Group, the network is facing growing competition from Amazon Inc. and Evine Live Inc for consumers like 24-year old Erin Bounds, who regard buying products through TV shows a relic of the past.

“Someone who is 24 doesn’t have the time nor desire to watch an hour-long show about a piece of jewelry or a vacuum when they can get an answer and the product quicker and probably cheaper on Amazon,” said Bounds, a resident of Ellicott City, Maryland.

 

Host Sloane Glass sells beauty products during a Facebook live event at the QVC Studio Park in West Chester, Pennsylvania
Host Sloane Glass sells beauty products during a Facebook live event at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

For decades, the main difference to shoppers between HSN and Qurate’s other shopping network, QVC, typically came down to variations in branding and merchandise, with HSN selling more electronics.

Qurate acquired HSN in late 2017 for $2.1 billion so the two shopping networks could join forces to better compete against Amazon and its home-shopping-style online video promotions.

 

 

Qurate executives told Reuters they now are culling HSN’s core merchandise offerings to eliminate many higher-priced electronics and some home goods, such as vacuum cleaners and blenders.

Instead, they are adding more niche cosmetic and apparel brands to help draw some distinction with QVC. They are also pushing both QVC and HSN to pursue younger shoppers with click-to-buy links on Instagram and Facebook Live for items such as earrings, shoes and Vince Camuto jeans, in a bid to spark a rebound in demand.

 

A Zulily logo, which is a subsidiary of QVC parent Qurate Retail Group, is displayed at the QVC Studio Park in West Chester, Pennsylvania
A Zulily logo, which is a subsidiary of QVC parent Qurate Retail Group, is displayed at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.

 

Second-quarter revenue at HSN declined 12 percent to $473 million from $533 million a year later the company announced Wednesday. Stock in the company, which counts media mogul John Malone as one of its largest investors, is down about 8 percent year to date, compared with a 14 percent increase for the Nasdaq index, and 64 percent increase for Amazon.com year to date.

 

A studio set is seen at the QVC Studio Park in West Chester, Pennsylvania
A studio set is seen at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.

 

“You’re seeing the impact of them digesting a large organization that is clearly not growing if you look at the numbers,” said Ben Claremon, partner and research analyst at investment firm Cove Street Capital, one of Qurate’s shareholders.

“There’s just not the degree of demand for home shopping products, and the desire to spend hours of the day watching them diminishes as you go down in age,” he said.

 

BALANCING BLUE LIPSTICK WITH BRACELETS

The new strategy is aimed at creating more distinction with the two cable channels after the merger, according to Rob Robillard, the new VP of Beauty Integration at Qurate.

 

Cars arrive at the entrance to the QVC Studi
Cars arrive at the entrance to the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

In beauty, for example, one of HSN’s top selling products is Too Faced “Unicorn Tears” blue lipstick, which sells for roughly $22. One of QVC’s best products is the Doll 10 Nude lipstick with a price tag of around $25, noted Robillard.

“We were sort of hoping there would be this real big difference between HSN and QVC,” he said. “But the two are actually very similar.”

 

Producers work in a control room at the QVC Studio Park in West Chester, Pennsylvania
Producers work in a control room at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

Qurate will partner with Robin Burns-McNeill, chairman of Batallure Beauty, a company specializing in brand strategy, product and package development, sourcing and manufacturing in the fragrance, cosmetics and skincare categories, to create a collection of proprietary beauty brands, the company told Reuters exclusively.

 

Products are displayed at the QVC Studio Park in West Chester, Pennsylvania
Products are displayed at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.

 

The first manufactured beauty products from this partnership are slated to launch in fall 2019 on QVC.com, and, if all goes well, the company said they would likely tap on Burns-McNeill’s shoulder to create proprietary brands for HSN as well.

They have a tall order. Amazon is the top online destination for beauty and the fifth-most-popular retailer for skincare and cosmetics, according to Coresight Research, behind leaders Walmart, CVS Health, Target Corp and Walgreens. QVC and HSN do not rank on the list.

 

Products are seen back stage at the QVC Studio Park in West Chester, Pennsylvania
Products are seen back stage at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.

 

In March 2016, Amazon launched “Style Code Live,” a daily live fashion show which has since gone off-air.

This June, Amazon unveiled Prime Wardrobe in the United States, allowing Prime members to try on clothing, shoes, and accessories before purchase. Customers have up to seven days to try their clothes on at home, and are charged only for those items they choose to keep.

 

Products are displayed next to a screen broadcasting live at the QVC Studio Park in West Chester, Pennsylvania
Products are displayed next to a screen broadcasting live at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.

 

Celebrity-driven shows and videos on QVC still have their upside, according to vendors such as Xcel Brands Inc Chief Executive Robert D’Loren. A QVC apparel vendor for more than six years, D’Loren cites on-air appearances of fashion designer and QVC host Isaac Mizrahi – D’Loren’s largest, most successful brand on QVC – as strategic advantage for selling goods on TV.

 

An employee passes by screens displaying live broadcasts at the QVC Studio Park in West Chester, Pennsylvania
An employee passes by screens displaying live broadcasts at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.

 

D’Loren thinks Qurate, which currently accounts for 60 percent of Xcel’s brand volume, is well-positioned to take on competitors Amazon.com and video retailer Evine, and that it’s “only a matter of time” before millennials like Bounds give Qurate’s QVC and HSN a shot.

“There is something to tuning in, watching, having product fully demonstrated to you that is unique and has great value, and I haven’t seen that anywhere else in the market,” he said.

 

(Editing by Vanessa O’Connell and Edward Tobin)

 

Host Sharon Faetsch sells products live on the air at the QVC Studio Park in West Chester, Pennsylvania
Host Sharon Faetsch sells products live on the air at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

Producers work in a control room at the QVC Studio Park in West Chester, Pennsylvania
Producers work in a control room at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

QVC parent Qurate Retail Group logo is displayed at the QVC Studio Park in West Chester, Pennsylvania
QVC parent Qurate Retail Group logo is displayed at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.

 

Producers work in a control room at the QVC Studio Park in West Chester, Pennsylvania
Producers work in a control room at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

A talent board is seen backstage at the QVC Studio Park in West Chester, Pennsylvania
A talent board is seen backstage at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.

 

Producers work in a control room at the QVC Studio Park in West Chester, Pennsylvania
Producers work in a control room at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

Host Sharon Faetsch and designer Isaac Mizrahi sell products live on the air at the QVC Studio Park in West Chester, Pennsylvania
Host Sharon Faetsch and designer Isaac Mizrahi sell products live on the air at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

A studio set is seen at the QVC Studio Park in West Chester, Pennsylvania
A studio set is seen at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid.

 

Producers work in a control room at the QVC Studio Park in West Chester, Pennsylvania
Producers work in a control room at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

Host Sloane Glass sells beauty products during a Facebook live event at the QVC Studio Park in West Chester, Pennsylvania
Host Sloane Glass sells beauty products during a Facebook live event at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid

 

Host Sloane Glass sells beauty products during a Facebook live event at the QVC Studio Park in West Chester, Pennsylvania
Host Sloane Glass sells beauty products during a Facebook live event at the QVC Studio Park in West Chester, Pennsylvania, U.S., June 4, 2018. Picture taken June 4, 2018. REUTERS/Brendan McDermid
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