Big brands take up residence at home-shopping channels

LONDON - The upcoming digital switchover is adding impetus to home-shopping stalwart QVC. Should big-name brands be looking to advertise on what has been the preserve of jewellery and exercise equipment?

The caricature of home-shopping channel customers - one of bored, middle-aged women bulk-buying Dustbusters - is being challenged head-on by QVC.

The channel, which last week extended its Freeview carriage agreement with multiplex operator SDN until 2022, is showcasing an ever-wider range of big-name brands and reaching more customers. With the digital switchover promising an even bigger audience for the channel, is it time for marketers to reappraise the potential of home-shopping channels?

There is no doubt that QVC is an immensely powerful sales tool for a number of premium brands. Its beauty offering would be at home in Harvey Nichols: not only does the channel sell the likes of grooming, skincare and bath and body product brand Molton Brown and Bobbi Brown cosmetics, it also launched cult brand Liz Earle in the UK.

'I know many brands felt that if they went onto QVC it would hurt their high-street shops,' says Brian Farrelly, director of broadcasting at QVC. 'In fact, when we showcased Molton Brown, sales in its shops then increased by 25%.' Last year, QVC showcased a Molton Brown gift set in its 'Today's Special Value' slot; it sold £2.7m-worth in one day.

According to Farrelly, QVC is now available in 21m homes - a 12% increase on last year. Last month more than 4.5m households tuned into the channel, giving it a potential audience of 6.5m.

Despite the obvious attractions of such an audience, there is no doubt that many marketers still believe that appearing on a shopping channel could potentially dent their brand's reputation - evidence that the channels themselves suffer from an image problem.

One brand director of a fine wine company, who had considered selling via a shopping channel, says the proposition was vetoed by the board. 'The fact is that some of these channels are just horrendous and seen as tacky and not fitting with our brand values at all,' she says.

However, Richard Perks, director of retail research at Mintel, says the type of consumer whose perception of a premium brand might be tarnished by seeing it on a home-shopping channel would not be watching in the first place. 'The audience profile tends to be older and not particularly affluent,' he says.

The majority of products sold on shopping channels fall into the jewellery, fashion, beauty and home categories. According to Mintel, most also tend to be fairly low-priced.

However, Farrelly believes this is changing. The growth of the internet has made consumers more trusting of direct sales, while the power of TV to explain products is a bonus. 'We recently had Dell's vice-president of international sales showcasing its range - you won't see him on the shop floor at PC World,' says Farrelly.

A growing number of brands, such as JML and Thomas Cook, are also going direct to consumers by launching their own branded shopping channels, reflecting their belief in the medium.

JML launched three channels last May. Hannah Treble, head of media at the group, says the offering has created another touchpoint with consumers and provided it with a platform to showcase new products and gauge how successful they will be. 'We have launched products such as our Fresh Air Globe [an air filter that neutralises bacteria and odour] on the channels before bringing them to retailers,' she adds.

Industry analysts value the home-shopping channel market at between £750m and £1.5bn a year. There are currently 42 dedicated channels in the shopping section of the Sky electronic programme guide and broadcasters believe it is a growing market.

Love them or loathe them, the channels themselves have become something of a cultural phenomenon. Martin Bowley, former chief executive of Carlton Media Sales and chairman of the British Television Advertising Awards, says their influence can be seen in mainstream advertising. 'There is no doubt that they have had an impact,' he says. 'You only need to look at brands such as Cillit Bang - its ads are a pastiche of shopping TV.'

However, the market's growth has come at a cost: the roll call of collapsed channels includes Auction and iBuy. Concerns over the use of premium-rate phone lines, particularly on channels using the auction format, have also dented the market.

Perks believes home-shopping channels will never be more than a niche market. 'The time most consumers are willing to spend watching them is always going to be limited,' he says. Another limiting factor for the future is that the risks involved for brands launching their own channels will only increase as the cost of the spectrum rises with the advent of digital switchover.

Despite these challenges, with brands as diverse as Birkenstock, Sanyo and Thorntons using QVC to sell products, it is clear that there are marketing directors prepared to give the medium a chance. With digital audiences set to grow, the number of marketers considering shopping channels as a viable option may also increase yet further.

Datafile: QVC
  • QVC launched in the UK on 1 October 1993 in a joint venture with BSkyB.
  • The channel's UK net sales in 2006 were £331m - an 8.4% increase year on year.
  • QVC received 15.6m phone calls from customers and shipped 12.86m items in 2006.
  • Brands that use QVC include Hyundai, Hush Puppies, Panasonic, Samsung, Dell, L'Occitane, Vax, Scholl, Thorntons and Aromatherapy Associates.


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