Focusing only on merchandise is passe as retailers world-over continue shift their focus towards retaining their customers. Effectively managing the inventory, working capital, providing quality and stronger price value, creating a differentiated product and shopping experience are the most soughtafter ways to attract the ‘butterfly’ consumer. It is becoming increasingly important to provide interactive services and to continue to offer more robust and unique e-commerce options to drive the future of retail.
Mindy Grossman, chief executive officer of HSN, Inc. (HSNi, formerly IAC Retailing), a 32-year veteran in the retail and apparel industry and a member of the Company’s Board of Directors believes that retailers can no longer focus on getting the customer to come to them. Grossman, who is set to address the World Retail Congress delegation in Berlin this April, views the current environment as an excellent opportunity for HSNi to gain share. In her dialogue with IndiaRetailing, she reveals there has been a shift in the consumer’s psychology of acquisition too. Excerpts from the interview:
What do you see as your immediate business priorities in this current economic climate?
HSN has a unique and differentiated business model that allows the 24×7 network to identify shifts in consumer behaviour. We measure our business by the minute and based on trends, can shift in real time to both maximise and mitigate. In 2009, our ability to see these shifts allowed us to make critical changes to assortments, programming and marketing and that will continue to be a key priority in 2010.
Another immediate business priority for HSN is to own the future of transactional innovation across multiple platforms using content to create communities and to drive commerce. We have already made significant strides and have been at the forefront of innovation. We are the only retailer that streams live video on three screens, TV, Internet (with over 12,000 videos on HSN.com’s product pages) and mobile via our iphone shopping application. We have also had great success in enabling our customers to shop with HSN by using their remote control through our ‘Shop by Remote’ technology, currently available in more than 25 million homes in the US and even in-flight shopping. We will continue to offer our customers with innovative ways to access our brands and products whenever and however they want to shop.
How do you view the prospects for 2010?
We view the current environment as an opportunity for HSNi to gain share. The convergence of content, community and commerce is happening in real time, and we are uniquely positioned to be able to leverage our networks to bring great products, great stories and great storytellers to life to an engaged community of customers whenever, wherever and however they choose. We will continue to create value by exerting strict financial discipline while at the same time strategically investing for growth.
In what way do you see consumers changing their shopper behaviour?
There has been a shift in the consumer’s psychology of acquisition. The wild days of abundance and status for status’ sake are no longer relevant. Customers are more discerning in both their product choices and with whom they choose to have a relationship.
We went through a period where functional trumped emotional as consumers redefined the difference between a ‘self’ and a ‘selfish’ purchase. Value has also been redefined, and consumers expect more from both the product and the experience. Since our model has always been about price value, customers trust that what they are buying will meet or exceed their expectations.
Now, customers are re-engaging with more discerning purchases, such as jewellery, apparel and accessories, but the product has to be unique, special and serve the customers emotionally. ‘Special’ has become the new status. Our product assortments in these discerning categories are over 90 per cent proprietary to HSN and that creates a competitive advantage as we can offer a broad selection from both existing and new designers and brands that customers cannot find anywhere else. As many traditional retailers pared back assortments and service, we were able to provide a personal shopping service that was brought to life on TV, online and mobile, giving our customers instant access 24-hours a day.
How should retailers respond to those changes?
Retailers can no longer focus on getting the customer to come to them. Customers need access and service on their own terms. Locking them into a specific place and/or time is not realistic. To truly be differentiated, a brand proposition has to be decoupled from just a price and/or discount comparison. The focus has to be on creating a compelling and distinctive product experience, while at the same time maintaining a great price value in the customer’s mind.
Customers, particularly women, want their needs and lifestyle challenges to be understood and respected. They want respectful, intelligent and authentic communication. Helping them make the right choices, becoming a trusted advisor and, in essence, an advocate for the consumer creates a completely different dynamic and bond with one’s brand. Today, customers are much more discerning and expect more. HSN has been pursuing a strategy of offering consumers ‘more; more unique and exclusive products, consistent price value, and more accessibility over multiple platforms from TV and Internet to mobile and in-flight.
On the technology front, being able to use content to leverage online broadband adoption, interactive television, video on demand, social networking and mobile platforms to give the customers access to commerce on their own terms is critical. However, it needs to be intuitive and relevant.
What will characterise a winning retailer in the future?
Retailers who focus on and really know their customers, effectively manage inventory and working capital, provide quality and strong price value and create a differentiated product and shopping experience will be best positioned. It is becoming increasingly important to provide interactive services and to continue to offer more robust and unique e-commerce options as those will be a main driver in the future of retail. Technological advancements and new ways to shop will give retailers that competitive edge.
Over the past few years, we have evolved HSN from a linear television shopping channel to a network of experiences – delivering a multichannel strategy of what we call ‘lifestyle, editorial, programmed commerce’. HSN provides a shopping experience and content that is consistent and available 24 hours a day on multiple platforms. This access, and our ability to leverage our content as a vehicle for commerce is a competitive advantage for us.
Where will growth come from in the short to medium term?
Growth will come from gaining share of market and share of wallet, engendering loyalty and trust with your consumer, leveraging innovation and creative collaborations to create new platforms for expansion, and creating long-term sustainable value for one’s brand and business.
What is your favourite shop and why?
I must admit that I purchase over 80 per cent of what I buy online. I feel that I can experience a greater breadth of assortment and information on the brands and products that I know or become introduced to on the web. The ability to weave editorial content into a site, get community and customer feedback and a more personalised experience is of great benefit. My favourites would be Net-a-Porter and J. Crew for fashion, Williams Sonoma for cooking, Frontgate for home and outdoor, 1st Dibs for antiques and hard-to-find objects, and, of course, HSN for almost everything!
— IndiaRetailing Bureau