Cashing in on the home shopping boom

Black Enterprise, Feb, 1995 by Cassandra Hayes

Home shopping networks are blowing the lid off the retail trade. Even though there are few blacks, there's money to be made.

TERRY LEWIS MASON IS WORKING the camera. Her crisp, commanding voice wafts over the Home Shopping Network airwaves, prodding television viewers to buy the red silk dress modeled on the screen. Although she appears engrossed in every fashion detail, her eyes are fixed on a nearby computer. Its color-coded graphs clock the number of incoming calls and sales every 15 second, as her voice coaxes viewers to pick up the phone and buy.

Sales are not coming in fast enough, prompting Mason to rethink her strategy. Is it the color? The waistline? She casually mentions that the fitted dress has an elastic waist. Within seconds, the orders start rolling in.

After her stint before the camera, 32-year-old Mason reflects on her job as super saleswoman of the airwaves. Throughout the program, Mason focuses on pumping up the volume of sales. As one of Home Shopping Network's top fashion hosts, her sales goals average between $300,000 to $500,000 per show. Depending on the quality of the merchandise and the time of day, goals for some shows can be as high as $1 million.

"My monitor tells me everything I need to know," Mason continues. "I know how many calls are coming in, how many units are selling per minute, how many dollars I'm making during that show." While all sales hosts receive a salary, it pales in comparison to the bonuses they can make.

THE LURE OF HOME

Still in its infancy, the electronic retailing industry includes TV home shopping, infomercials and computer online shopping. This phenomenon generated an estimated $3.2 billion in sales last year, according to a recent study by the International Mass Retail Association. That number is projected to top $100 billion by the year 2000. For consumers with less time on their hands to shop, these new electronic venues offer competitive prices, unique product selection, product information--and, above all, convenience.

With few African-Americans in these ranks, those interested in the business should take advantage of the opportunities in this fast-breaking industry. It's not an arena for the timid: Aggressive individuals with computer, retail sales, finance and marketing skills can do well in this skyrocketing industry.

There is certainly no shortage of opportunities. In fact, $2.24 billion in sales is not bad for an industry that was scoffed at when it first appeared nationally on cable television a decade ago. But no one is laughing now at the Home Shopping Network (HSN) and its rival, QVC, as they corner the burgeoning television shopping market.

Yet, American TV viewers still don't know where to find these stations on their television sets, much less on a map. Nevertheless, although neither of the networks is located in a major media center, HSN (St. Petersburg, Fla.) and QVC (West Chester, Pa.) have made TV shopping a tale of two channels.

Once the stepchild of the retail business, television selling was cast in the lot with late-night commercials for steak knives and nostalgic audio cassettes. Feeding that schlock image was the new shopping network's staple of low-priced clothing, household kitsch, cheap collectibles and budget jewelry.

While this merchandise is still part of the repertoire, brand-name computers, cameras and camcorders by industry giants like IBM, Kodak and Sony are also offered. In addition, shoppers can find fashion favorites from designers Pierre Cardin, Elizabeth Arden and Diane Von Furstenberg. In fact, such celebrities as Joan Rivers, Victoria Principal and Ivana Trump have bypassed retail shops, preferring instead to pitch their jewelry and apparel on the two lucrative television channels.

HSN and QVC have managed to muscle out a dozen or so competitors over the last decade. But hot on their heels are mail-order giants (Spiegel) and chain stores (Macy's and Nordstrom's) that are entering the TV retailing fray. Even music video giant MTV is starting its own shopping program. If the next millennium brings 500 television channels into American homes, even more companies will be scrambling for a piece of the action.

INDUSTRY DYNAMOS

With over 60 million households at their fingertips, QVC and HSN split the $2.24 billion in revenues consumers spent television shopping in 1993. Both have expanded into niche markets. For example, HSN has a joint venture with Black Entertainment Television (BET) to produce a two-hour, Afrocentric shopping special on BET called B.E.T. Shop. In addition, QVC and HSN also offer their own proprietary brands of merchandise.

In an effort to keep up with technology and each other, cyberspace consumers can take advantage of both networks' online shopping services. Both companies, along with other local TV shopping channels, like the Minnesota-based Valuevision, are also entering the fastest growing segment of electronic retailing: infomercials.

HSN's Home Shopping Club began as a local Florida cable show in 1982. The network now employs over 5,000 people. With its moderately priced merchandise, HSN, headquartered in St. Petersburg, is considered the "Kmart" of television shopping, compared with the more upscale QVC (its initials stand for "Quality, Value and Convenience"). But HSN has no intention of changing that image, and is "comfortable catering to middle America," says Louise I. Cleary, HSN's vice president, corporate communications.