The chief executive officer of HSN Inc. is engaged in the biggest bet of her career as she redefines the TV shopping network and works to narrow the lead of the channel’s number-one player, QVC Inc.
Think she can’t do it? That’s OK, she likes proving naysayers wrong, Grossman said Tuesday evening during a Q&A hosted by Cosmetic Executive Women, led by WWD Beauty Biz editor Jenny B. Fine.
When Grossman arrived at HSN from Nike Inc. in 2006, she found a company in need of a moral boost and an aggressive turnaround plan. Prior to Grossman, HSN had a succession of seven ceo’s in 10 years.
“In that environment, everything goes on freeze,” she said. “There was definitely an inferiority complex around the largest competitor….The main thing that I communicated from Day One is that things are going to be different.”
Before taking the job, Grossman immersed herself in TV-shopping viewing.
“The more I watched, the more excited I got. The lifestyle element of what could be was not being realized. It was a selling vehicle — it was not experiential.”
She recalled telling Barry Diller, chairman and ceo of IAC/InterActiveCorp, which at the time owned HSN: “If you’ve got the stomach for some ugly stuff and transition, I would love to do this.”
It was Grossman who ultimately proved she had nerves of steel. She relaunched the brand in August 2007 — “It was literally lights on, light off. There was lots of nail biting.” One year later, as cracks in the economy began to show, HSN was spun off from its parent IAC/InterActiveCorp, and became a separate, publicly traded company.
Referring to the recession, Grossman said: “We had to block out all the noise” and zero in on implementing the company’s strategy: create a lifestyle platform that marries commerce and entertainment. HSN began focusing on key items, rather than discounting, and worked to keep customers engaged, offering a respite from the 24-hour news cycle. “There is never any bad news on HSN,” said Grossman.
The company’s strategy seems to be working. HSN’s most recent quarter marked the company’s highest quarterly sales volume in its 32-year history, with sales increasing 12 percent to $612 million.
“I’ve always been a risk taker. There’s no such thing as transition without a level of risk,” she said. “If you make a mistake, you have to have the courage to change it — and not go down that path just because you said you would.”
Grossman saw beauty, a category well suited for TV demonstrations, as a key element of HSN’s re-branding.
“It was [a category] I embraced from the very beginning,” said Grossman. In her view, beauty’s formula of innovation, technology, problem solving, inspiration and market launch and repeat was similar to Nike’s. It also serves as a gateway category that leads HSN shoppers — about 87 percent of whom are women — to additional product areas. “[Beauty] has become a critical linchpin of the strategy and where we spend a lot of time.”
She nodded to the beauty industry’s vast consumer insight. “It is the most affordable indulgence,” Grossman told a room filled with beauty executives. “We all want to create that intuitive product that makes you want to throw everything else away.”
In a four-year span, HSN has transformed the beauty portfolio from a skin care-heavy offering to a vast assortment of higher-end, higher-profile brands. The TV retailer inked a deal with Sephora, which since has expired, and many of the brands it carries, and linked arms with Coty Inc. to move into the fragrance category, which in the past had been viewed as a tough sell on the airwaves. Selling fragrance, said Grossman, “is about creating the evocative, experiential world. We can do that.…We can tell the story behind the story” in way that department stores cannot, because of the broad selection they carry.
Similarly, when Grossman was informed it was taboo to show a live model displaying HSN’s intimate apparel items, the ceo said, “Have you seen a Victoria’s Secret ad?” and introduced models to the set.
Grossman has leveraged HSN’s hours of programming and divided it across hsn.com, which accounts for 32 percent of sales; YouTube; in-flight shopping, and mobile devices via an iPhone application, to name a few.
Turning toward the company’s hiring process, Grossman’s criteria goes beyond functional skills and includes optimism, passion, an appetite for risk and a sense of humor.
“If you want predictability, work for IBM — that’s not us.”
She said, “When you are not the biggest [player], there has to be another reason for a brand or an employee to choose HSN.”
Grossman, dressed in a black-and-white dress, told the crowd, “I’ve always been a very passionate person. I love it, I hate it — there’s not a lot of gray.”
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