Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, June 11, 1993 TAG: 9306110149
SECTION: BUSINESS PAGE: B9 EDITION: STATE
SOURCE: Los Angeles Daily News
DATELINE: LOS ANGELES LENGTH: Medium
The first of four planned hourlong national broadcasts, scheduled today, will take its name and originate from the "Mall of America" in Bloomington, Minn., the country's largest shopping center. Roanoke's NBC affiliate, WSLS, will broadcast the program at 10 a.m.
Two co-hosts and three shopping guides will tour the mall, showing goods and services viewers can buy by calling a toll-free number. The show is a creation of NBC Direct, a new division of NBC Productions that will explore retail and shopping ventures for the network.
NBC's move follows that of retailers, designers and manufacturers who are interested in the fast-growing, $2 billion home shopping industry. Recent entrants include upscale department merchants: Saks Fifth Avenue, Macy's, Liz Claiborne, Nordstrom and Spiegel.
Analysts say they're lured by big potential sales volume and the promise of reaching millions of consumers without building costly stores.
For example, New York designer Arnold Scaasi sold half of his fashions during a one-hour program on QVC. Spokeswoman Kathleen Holliday declined to release results but said QVC was very pleased and is negotiating with Scaasi for another show.
The trade publication Women's Wear Daily said Scaasi rang up $410,000 in sales of more than 2,200 dresses.
Fast sales "is a tough thing to pass up," said Richard Giss, partner of the retail services group at Deloitte & Touche in Los Angeles. "People want to make sure they don't miss out on the next shopping trend."
Home shopping is dominated by two companies: West Chester, Pa.-based QVC Network Inc. and Home Shopping Network in Clearwater, Fla., which operates an order-filling warehouse in Salem. These two comprise 99 percent of the 6-year-old market, each with roughly $1 billion in annual sales. QVC reaches 44 million cable homes; HSN reaches 28 million.
This is how it works: retailers sell their products to QVC or HSN, who in turn sell it on the air. Gross profit margins are about 40 percent for the home shopping channels, said Craig Bibb, a consumer services analyst at PaineWebber in New York.
Retail analysts see the jump by major retailers into home shopping as a way to legitimize the business. Long tarred by its less than upscale "cubic zirconium" image, home shopping channels are gaining respect through the participation of big department stores such as Saks and Macy's.
"It will attract a whole new breed of shoppers, change the entire [home shopping] experience and bring it into the mainstream," said Ike Lagnado, a principal at Tactical Retail Solutions Inc., a New York consulting firm that did an analysis of Macy's decision to move into home shopping.
Selling its private label line, Real Clothes, Saks Fifth Avenue found it had tapped a gold vein. In the first hour of its initial May 22 broadcast on QVU, Saks sold more than $570,000 worth of clothes and accessories priced between $50 and $125. Sales far exceeded its projection of $400,000.
Saks is planning three more shows this year: on June 19 and as yet unscheduled programs for fall and Christmas.
Liz Claiborne Inc. in New York said sales on its first show on QVC's Fashion Channel May 22 were very good.
Spiegel Inc., based in Downers Grove, Ill., said it is looking into home shopping. "We're talking with a number of media companies," said spokeswoman Ann Morris.
Seattle-based Nordstrom said it will create a new direct-sales division to explore new ventures, including interactive television shopping where the viewer communicates with a sales person for personalized shopping.
R.H. Macy & Co. in New York - parent of Macy's, Bullock's and I. Magnin under Chapter 11 bankruptcy - is taking it a step further, creating "TV Macy's," a 24-hour home shopping channel on cable to air in the fall of 1994.
The total electronic shopping industry will reach $60 billion by the turn of the century, estimated Bibb of PaineWebber, taking market share from both mail order and traditional in-store shopping.
Memo: shorter version ran in the Metro edition.