Home Shopping Network Tunes into Cataloging

The Home Shopping Network (HSN) is more than just TV. There’s the Website, of course, launched in 1999, which the $1.93 billion company says turned a profit in just three months. And in July 2001, the St. Petersburg, FL-based company entered the print catalog market with its acquisitions of the Improvements and Home Focus home products catalogs from Hanover Direct. (HSN also bought Safety Zone, a one-time catalog that had been transformed to a Web-only marketer, at the same time.)

After having downplayed the network’s relationship with the catalogs for the first year, HSN is now putting the muscle of its well-known behind the titles. “Identifying and leveraging the synergies between HSN and the catalog titles will help us increase circulation far above what we had been able to do when we were part of Hanover,” says Ken Ellingsen, senior vice president of HSN catalog services.

For starters, HSN is advertising the Improvements catalog in print, online, and on television. The company is also testing a package insert program for both catalogs and is prospecting through the HSN buyer database. The company ran limited tests in fall 2001, but Ellingsen says, “as you might expect the performance of those test were [negatively] affected by the national events of last fall.”

For package insert tests this fall, HSN is using primarily recency, frequency, and monetary (RFM) segmentation as well as testing by product categories. “Going forward, we will use detailed buyer purchase categories to improve the selection process,” Ellingsen says. The company has inserted “millions” of catalogs in outgoing HSN parcels, he says, “and our results indicate that there is opportunities within segments to ramp up circulation.”

In subsequent mailings of the HSN-sourced buyers, “the sales per book has been similar to the performance of our overall 0- to 12-month buyers,” Ellingsen says. It helps that HSN customers are similar to those of Improvements and Home Focus in terms of age, income, and gender.

Getting merchandising in sync

Athough HSN’s catalog division and its television group have separate merchandising teams, the merchants have weekly conference calls and monthly meetings to discuss overlapping items. Each team is also on the lookout for items that would work for the other channel as well.

For instance, HSN merchants figured that the network’s best-selling line of “huggable hangers” (clothes hangers with a velvety surface that prevents garments from slipping off) might also sell well in the Home Focus catalog — and they were right. The merchandising effort has worked so well that HSN is rolling it out to the marketing departments.

And expect to see HSN become a bigger player in the catalog field. One reason it purchased the Hanover titles “was to obtain the catalog management expertise,” Ellingsen says. With that expertise now inhouse, HSN is looking to buy more catalogs. The company may also take some of its more popular categories and spin them off into niche titles within the next 18 months, though Ellingsen would not disclose specifics.

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