ASHLEE CRUZ • NRF SCHOLARSHIP • HSN CASE STUDY
ABOUT HOME SHOPPING NETWORK HSN is a highly successful shopping network with revenues of $3.7 billion in the last year.
[1]
With the
leadership of CEO Mindy Grossman, HSN is the #1 source for television based retailing. Given the level of success achieved by HSN, it is critical that they continue to deepen their relationship with current customers while protecting and growing their market share. A major opportunity exists for HSN to take advantage of emerging technologies to deepen their relationship with customers using a) celebrity endorsed editorial content, b) a curated subscription service, and c) a Smart TV shopping application.
THE POWER OF RICH, ORIGINAL CONTENT HSN has the opportunity to build brand equity by hosting a variety of social media friendly articles (cooking recipes, travel advice, career tips, and more) on their website. This effective method of omni-channel communication will connect in an emotional way with the existing customers of HSN in ways direct selling cannot. These articles, if written with original content by HSN authors (similar to a HuffPost model) supported by professional graphics or illustrations will be of great interest to current HSN customers who will be likely to share these articles with others through Facebook and Pinterest, the favorite sites of HSN’s target group. In this way, HSN can take advantage of social media to build their network of customers at very little cost to HSN. HSN’s target market of 35-55 year old women responds highly to celebrity influence. HSN customers will enjoy articles written by a variety of celebrities from Dr. Phil to Chrissy Teigen and more. Access to this interesting and valuable advice from credible celebrities will make the customers of HSN feel valued and understood.
[2]
1
ASHLEE CRUZ • NRF SCHOLARSHIP • HSN CASE STUDY
HSN GETS YOU, REALLY (TELL YOUR FRIENDS) Successful brands recognize that social media is most effective when employed to communicate lifestyle messages of value to readers instead of a direct marketing appeal. HSN can encourage customers to become regular visitors to their social media and website by providing “In The Now,” a daily newsletter of the latest celebrity news, lifestyle tips, the latest trends, and conversation starters to keep readers in the know.
While making these posts available to customers through social media and their website may seem like small steps for HSN, they have the potential to pay major dividends in reinforcing relationships with existing customers while communicating with new customers in the ways that matter most to them. In this way, HSN can expand their already successful “The Fashion Edit” and turn it into an editorial platform of information that serves the lifestyles of customers in a comprehensive way.
2
ASHLEE CRUZ • NRF SCHOLARSHIP • HSN CASE STUDY
A BOX FOR EVERYONE Subscription services have become a highly successful retailing business model for reaching consumers in ways that build lasting relationships and loyal followings. The popularity of subscription service retailing provides HSN with the opportunity to reach their target customers in a new way, with the power to expand and deepen their relationships with customers over time. Birchbox is an example of the opportunity presented by subscription service retailing with startup revenue of about $125 million in 2014 and with over 800 brand partners. [3] HSN has the opportunity to provide their own subscription box service in ways that will be popular with their target market audience of consumers 35-55 year old. The subscription retailing model will also allow HSN to take advantage of their long list of vendor partnerships and relationships with popular celebrities.
Subscription service retailing will allow HSN to expand their relationship with customers from
a television screen or computer monitor to include a personal package delivered directly to the customer’s door every month. HSN can begin to introduce subscription service retailing with a box tai-
3
ASHLEE CRUZ • NRF SCHOLARSHIP • HSN CASE STUDY
lored to a single product category such as beauty or accessories and can then expand subscriptions to include a variety of boxes that address a variety of product categories over time.
HSN has the resources to offer subscription service boxes to their customers at competitive
prices and with compelling content. Like Birchbox, HSN can provide beauty boxes that include a variety of attractive samples that will encourage customers to buy full size products. Other opportunities for subscription service boxes could include fashion boxes featuring the latest fashion items discovered by HSN stylists. HSN can encourage customers to post online reviews of the boxes they received for redeemable purchase points, which will stimulate a positive dialogue for HSN with existing and new customers over time.
HSN can also take advantage of their relationship with popular celebrities and designers to
encourage them to curate their own subscription service boxes as a way of building their visibility and relationships with the core customers of HSN. By taking advantage of subscription service retailing, HSN can deepen the relationship of their most popular celebrities and designers with their existing customers while also building the loyalty of their core customers to HSN.
4
ASHLEE CRUZ • NRF SCHOLARSHIP • HSN CASE STUDY
THE WORLD‘S FIRST SMART TV SHOPPING APP
Smart TVs are increasingly becoming a popular household item for HSN’s consumer market. As Smart TVs become the primary method for watching cable television, HSN has the opportunity to implement a split-screen fitting room application to make buying from TV easier and more successful. The technology provided by the smartphone app StyleWhile
[7]
will allow customers to create
their own digital avatar with the input of a few simple
This technology is similar to the ones used in the fitting rooms of Saks Fifth Ave and Neiman Marcus.
measurements. This avatar will then allow the cus5
ASHLEE CRUZ • NRF SCHOLARSHIP • HSN CASE STUDY
tomers of HSN to try on the products they are considering to buy and to see how these products will look on their personal body type. This technology will empower the customers of HSN to understand the fit of their purchase in ways that will grow sales and minimize customer returns. Given the fact that HSN has already created a database for the products they offer online, it would be easy and cost effective to input that database into StyleWhile’s program and create a unique competitive advantage for enhancing customer experience. By embracing new and emerging technologies, HSN has the opportunity to reinforce its position as the leader in television retailing and become the first to provide their customers with virtual TV fitting rooms.
The near-augmented reality experience elevates HSN’s shopping experience and adds value to
their main existing assets: The HSN and HSN2 Channels. Not only would HSN be the leader in television retailing, they would be a leader in television innovation by being the first to implement virtual TV fitting rooms.
6
ASHLEE CRUZ • NRF SCHOLARSHIP • HSN CASE STUDY
SUCCESS MEASURED AND DEFINED HSN’s north star is to deliver a new experience everyday. The strategies brought forward in this case study will allow HSN to deliver on this promise in ways that will delight existing customers and attract new customers to the brand. The success of these strategies will be measured in the following ways:
Editorial content’s success can be measured through
• Outcome metrics: KPI directly from articles
• Number of times articles are shared
• Number of referrals through social media sites
• Acquisition metrics: New sign-ups for your e-newsletter
• Engagement metrics: A decrease in customer service calls because of
Facebook and Pinterest interaction • More comments and questions about products on your accounts
[4]
Box subscriptions can be measured by
• Quality: number of subscribers who will have a deeper relationship with
HSN and promote healthy engagement with other customers and the
company
• Analytics: Customer profiles based on their subscriptions and reviews
• ROI from subscription sales and full-size purchases of subscription items
• KPI on HSN forums and item reviews due to samples
• Direct increase in revenue from monthly subscription fees
[5]
7
ASHLEE CRUZ • NRF SCHOLARSHIP • HSN CASE STUDY
Smart TV purchases and usage can be tracked via
• Acquisition metrics: Number of app downloads on SmartTV
• Decreases in customer service calls and returns
• An increased profit due to higher sales and lower returns
• Retention and “stickiness”: The number of customers who continue to use
the app and keep coming back
[6]
• Direct revenue from in-app purchases, can be tracked by the third-party developer
8
ASHLEE CRUZ • NRF SCHOLARSHIP • HSN CASE STUDY
APPENDIX [5]
9 Keys to Building a Successful Subscription Business. (n.d.). Retrieved May 25, 2016, from h
[6]
How to Measure App Success. (2014). Retrieved May 25, 2016, from https://www.ap p
[1] [3]
ttps://www.zuora.com/guides/nine-keys-building-successful-subscription-business/
makr.com/blog/how-to-
FORM 10-K, HSN, INC. (Rep.). (n.d.). UNITED STATES SECURITIES AND EXCHANGE COMMISSION. E. C. (n.d.). Key To Success: Beauty Box Company Birchbox Says It's Not Just About The B
ox. Retrieved May 25, 2016, from http://www.forbes.com/sites/eshachhab
r
a/2015/09/23/key-to-suc
b
ox-says-its-not-just-abo
Saks grants consumers greater stylistic control with app. (2013). Retrieved May 25, 2016, from h [4]
[7]
The WHO, WHAT, WHERE, WHY and HOW of Editorial Content Strategy | Content Marketing I
nstitute. (2011). Retrieved May 25, 2016, from http://contentmarketinginsti
t
ute.com/2011/01/editorial-content-strategy/
The best online styling room to your fashion store. (n.d.). Retrieved May 25, 2016, from http://ww w
[2]
ttps://www.luxurydaily.com/saks-grants-consumers-greater-stylistic-control-with-app/
.stylewhile.com/
The importance of quality content. (n.d.). Retrieved May 25, 2016, from https://econsultan c
y.com/blog/65066-the-importance-of-quality-content/
Http://fashionista.com/2012/10/why-are-so-many-editors-leaving-magazines-for-retail-brands. (
n.d.). Retrieved May 25, 2016, from http://fashionista.com/2012/10/why-are-so-many-ed
i
tors-leaving-magazines-for-retail-brands
9