Live From Eden Prairie, It's ShopNBC CE!

By Alan Wolf On May 19 2003 - 6:00am




One of the fastest growing consumer electronics retailers on the TWICE Top 100 is ShopNBC, the flagship property of ValueVision Media.

Though still dwarfed by shopping network rivals QVC and HSN, the virtual retailer grew its CE business by nearly 43 percent last year, while its larger competitors remained essentially flat.

Building upon a base in fine jewelry, the on-air and online merchant has managed to mount an extensive consumer offering since its founding in 1990. That assortment, which includes a full panoply of A/V and computer products and accessories, is pitched around the clock via cable and satellite, while its hosted shopping segments can be played live and on demand over its e-commerce site, www.shopnbc.com.

"The goal," said Steven Craig, VP of sister division ShopNBC Interactive, "is to increase our conversion rates through salesmenship and, equally important, to reduce return rates through education and demonstration."

Much of the retailer's broadcasting savvy can be attributed to the NBC television network, which together with GE Equity owns about 40 percent of the parent company. ValueVision itself owns and operates a number of direct-sale venues, including ShopNBC Interactive, ValueVision Direct and FanBuzz.

To learn more about this burgeoning business, TWICE conducted, appropriately, a virtual interview with Lynn Hempe, ShopNBC's VP of home, cosmetics and ready-to-wear.

TWICE:How big is the consumer electronics category for ShopNBC?

Hempe: $100 million in sales a year.

TWICE:Where does CE rank compared to other product categories you carry?

Hempe: It's the No. 2 category for us after jewelry, representing 17 percent of the product mix.

TWICE:What types of electronics products and brands do you carry?

Hempe: It's across the board, including Panasonic, Fuji, JVC, Sharp, Dell, Lexmark, Canon, and private-label PCs, among others.

TWICE:What are the criteria for your CE assortment?

Hempe: Ideal items are ones that require demonstration, which would otherwise sit on a shelf in a retail store. In addition, we would look to being first to market with any goods before they hit retail shelves.

Other areas are value-adds, such as adding a camera bag to the sale of a camera; and end-of-life opportunities or closeouts.

TWICE:Are some consumer electronics considered more "telegenic" than others?

Hempe: Absolutely. Many products sit lonely on the shelf at brick-and-mortar retailers, and customers won't buy them because they don't understand how to use them, or they may feel uneasy about asking questions. TV as a medium provides an opportunity to educate and inform customers before making their purchases with a credible, sincere sales person.

TWICE:How often are electronics segments aired, and how long is the typical segment?

Hempe: Ten to 15 hours a week out of 168 hours, ranging from one to two hours per show.

TWICE:Do you buy direct from manufacturers or through distributors?

Hempe: Both.

TWICE:Are you an authorized dealer for all of the electronics products you sell?

Hempe: No.

TWICE:Do you fulfill the orders yourself?

Hempe: It depends. Computers we don't, but most other consumer electronics we do. We also prefer drop-ship and quick response vendor arrangements.

TWICE:Do you carry inventory?

Hempe: Yes, but a very small proportion to our sales.

TWICE:What's the ratio of on-air vs. Internet sales?

Hempe: Last year, ShopNBC generated $555 million in sales. $94 million or nearly 20 percent of our sales came from the Internet.

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