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With the addition of more exclusive fashion-forward accessories to its product mix, HSN has slowly changed how the industry views its business strategy and its customer, according to Bill Brand, executive vice president of programming, marketing and business development.
This story first appeared in the August 24, 2012 issue of WWD. Subscribe Today.
“When it comes to the product, it’s about being on trend. It’s about our merchants creating product that hits our sweet spot,” he said, emphasizing the accessories and footwear categories as a standard bearer for HSN’s growth. “When it comes to accessories, over the past three years, you’ve seen more national brands.”
Beamed into 96 million homes across the U.S. with live-streaming segments available on its Web and digital sites, HSN has shrugged off the stigma of a shopping channel for dowdy couch potatoes and emerged as one of retail’s most innovative multiplatform companies by luring in well-known designers and brand ambassadors. In recent years, HSN has fueled its growth by adding popular names such as Badgley Mischka, Naeem Khan, Iris Apfel, Sam Edelman, Vince Camuto, Carlos Falchi, Jessica Simpson, Serena Williams, Iman and Twiggy.
Designers-turned-celebrities, celebrities-turned-designers — and everything in between — flock to HSN’s home base in Saint Petersburg, Fla., to sell their wares, most of which are exclusive to HSN, in their own TV studio. Brands are selected by HSN based on selling power and the strength of the brand’s story. In most cases, this means designers, brand ambassadors and founders had better be good at connecting with viewers at home.
“Great product is the price of entry, but you have to have a great story and be a great storyteller,” said Brand, explaining that “creating a relationship” with the consumer is how HSN keeps customers coming back.
“HSN is about staying current. You have to be flexible and collaborative,” he added. “Accessories is a high-growth category and it’s a loyalty driver.”
As a result, HSN has put a lot of thought into bringing in jewelry, handbags and footwear that are trendy yet affordable.
For footwear, the company’s fastest-growing category within accessories over the last three years, the focus continues to be on attracting national brands, according to John Bosco, HSN’s senior vice president of merchandising.
“In the footwear business, you need recognizable brands,” he said, pointing to the recent additions of Vince Camuto, Steve Madden and Sam Edelman. “The customer wants the hottest trends.”
With an offering ranging from $99 up to $299, HSN has not only increased the number of brands it carries, but it has also worked on getting exclusive product from those brands.
“When we look at designers in footwear, we try to understand their relevance as well as who our target audience is,” Bosco noted. “We are looking to broaden the assortment when it comes to digital. That’s where most of the variety is being added.”
With the addition of its Web site in the last 13 years and a dynamic digital platform within the last six, HSN has had a larger opportunity to grow its stable of brands. This includes building out jewelry, which is the firm’s second-biggest priority behind footwear, according to Bosco.
Jewelry, which emphasizes trends more than national brands less and trends more, is anchored by the strength of Rarities, a fine jewelry collection by Carol Brodie. While Rarities isn’t fine jewelry in the traditional sense — its core offering hovers around $249 — the brand does offer higher-priced duds that hit $2,500.
Like most of the other HSN brands, Rarities uses classic designs found in fine jewelry and replicates them in more affordable materials including stones such as white topaz, cubic zirconia, peridot, amethyst and turquoise, and metals such as sterling silver, vermeil, stainless steel, black rhodium and 10- and 14-karat gold.
For HSN, the challenge in jewelry is maintaining the balance between design and quality.
“It has to be [about] designers [customers] know and bringing those designs to consumers at an accessible price point,” Bosco said. “That’s the kind of stuff where credibility and aspirational quality come into play.”
The same holds true for handbags, Bosco explained. The more aspirational designs must be evocative of the designer’s higher-priced collection at a more affordable price. For example, Carlos Falchi, who is relaunching his brand with new partner Li & Fung in September, will offer a collection of bags for HSN. Known for his quality work with exotic skins, the HSN line will replicate his signature looks in treated leather to keep the price attainable.
“HSN is a true partner. They help finance the shows. They are correct in terms of payment, and they have the most experienced buyers in the world who plan to sell out completely and they do,” said Amedeo Scognamiglio, founder and chief executive officer of Amedeo, an Italian brand that has been selling its cameo-centric jewelry on HSN for 10 years.
According to Scognamiglio, HSN helps its vendors develop the right product for its customer and it also acts as a sort of mentor through the selling process.
“What I like about HSN is that as a partner, you count. As a physical person, you are vital to the outcome and everyone is behind you,” said Scognamiglio. “HSN has the most discerning customers there is. When you’re on TV, you are not looking at them, they are looking at you and they can tell who’s a fraud.”
As a member of HSN’s stable of brands, Amedeo NYC must pump out nine collections a year, and appear on TV nine times a year to sell them. Each collection takes about four months to produce, which means Amedeo is constantly working on something for HSN.
But that’s fine with Scognamiglio, who is also co-founder and co-ceo of fashion-forward fine jewelry brand Faraone Mennella. According to the designer, when he started with HSN, his fashion friends told him selling on TV would “tarnish” his brand. Now those same people are asking him how they can get on HSN.
“When you sell 1,000 units of jewelry at once and [HSN producers] are screaming for more, it’s an amazing feeling,” he said. “Designers love fashion shows, but the ultimate satisfaction is when you sell a product and when people buy a product.”