Several years ago, the pairing of a TV retailer with a beauty chain during the most critical buying season — Christmas — seemed completely farfetched.
But the success of the collaboration between the Home Shopping Network and Sephora in mid-December — which saw sellouts of all planned items in just two out of four scheduled hour-long programs — debunks several preconceived notions. First, that HSN has a lower “Q” rating, or appeal quotient, than its rival QVC, and second, that the people who buy products from TV wouldn’t desire items from an upscale beauty chain.
The success has led many in the beauty industry to speculate that the pairing of other brick-and-mortars with TV retailers is imminent, especially since stores can look to realize benefits outside of sales, such as free advertising.
Advertising was a main reason Sephora opted into the deal, which brought the retailer into HSN’s 89 million consumer households, and to their customer base, 75 percent of whom are female.
“Sephora carries more than 250 classic and emerging brands, and many of the newer brands we carry do not have sizable marketing budgets. Appearing on HSN, which reaches millions of households across the country, brings outstanding visibility to our brands as well as to Sephora,” said Betsy Olum, senior vice president of marketing at Sephora, which operates 142 stores in the U.S. and Canada.
H2O Plus, which operates 20 stores in North America, is another retailer that recently hawked its brand on HSN. In late 2006, H2O Plus and HSN formed a partnership to introduce the company’s water-based, sea-derived skin care collection to millions of potential new customers. Cindy Melk, H2O Plus founder and creative director, said response has been very positive, and another appearance is scheduled for Feb. 5.
One of the most eligible stores for a TV retail partnership is Bath & Body Works, which operates over 1,500 stores nationwide with dozens of beauty brands, such as Ahava, Davies Gate, Biotherm, Jaqua and Warren-Tricomi, as well as a huge private label offering. Since the retailer does not advertise, B&BW may be able to profit from free exposure by appearing on a TV retailer. Other potential retailers include Fred Segal, Space NK, The Body Shop, Crabtree & Evelyn and Fresh. B&BW has dabbled with the small screen by creating an infomercial for its Patricia Wexler M.D. Dermatology skin care line. The specialty chain would not comment on its TV retail plans, but industry analyst and management consultant Allan Mottus asserted that the time is ripe for partnerships to begin.
“After this horrible Christmas, everybody has been talking to some degree about [getting on TV] I would imagine other networks aside from HSN would be interested in this,” Mottus said.
Much of the hoopla of getting onto TV may be attributed to the successful initial public offering of Bare Escentuals in September, which showed via its stock price — it opened at $28 — how lucrative selling makeup on TV can be.
“Now everyone wants some degree of exposure,” said Mottus. “Stores have traditionally been the power brokers of building brands, not consumers. HSN and QVC are very consumer driven and make consumers an important part of the brand. On TV, the customer is in charge. She is getting a pitch that she finds either credulous or not. It seems LVMH [LVMH Moët Hennessy Louis Vuitton, the owner of Sephora] has changed the equation. The bottom line is that the consumer no longer believes in editorial or ads. They would rather watch someone on TV talk about it. It’s not too different from TV ads in the 1950s in that respect,” Mottus said.
Michael Henry, HSN’s senior vice president of beauty merchandising, said there are business differences in working with brick-and-mortars, since three people are putting together the deal (HSN, the retailer and the manufacturer) instead of two. But, overall, it’s very similar to how HSN works with existing manufacturers.
“It is all about brand management and being very clear on what the objectives and expectations are for each strategic partner. For example, Sephora and HSN are both brands where communication in any form must be consistent with their brand code. And of course we treat the individual brand partners, such as Dior, T3, LipFusion, with the same level of respect to each of their own brand’s image. This can take many forms, such as direct mail, our Web site, studio sets, pricing, marketing, etc.”
Henry added that similar partnerships to his and Sephora are in the future.
“I do think we will see more strategic alliances among what has been thought of traditionally as competitors, provided both parties are able to have equity in realizing their individual objectives,” he said.
As for whether HSN is able to forge similar partnerships other retailers, Henry would only say, “Our relationship with Sephora is very positive and comes with very few restrictions.”