Internet Didn't Kill the TV Stars

Television shopping network leaders QVC, HSN and ShopNBC say their turf isn't threatened by the Web.NEW YORK (CNN/Money) - Richard Jacobs and his wife Marianna, who design and sell silver and gold jewelry, recently sold over a quarter-million dollars worth of products in one hour.Robert Glick, a stay-at-home dad, sold out all 1,200 units of his latest invention -- a "Po-Knee," or a stuffed horse that a child can ride atop a parent's knee -- in just two minutes and 50 seconds last October.Their secret for success: the television shopping networks."We all love that story about someone who just had an idea, took it on television and it became a great success," said Barbara Tulipane, CEO and president of the Electronic Retailing Association (ERA), a trade association for the industry. "TV shopping networks are still a relatively less expensive way for people to start a business and also a convenient way for people to shop."To be sure, the exponential growth of the home shopping industry appears to have defied the onslaught of that other very popular medium called the Internet.Last year, the industry rang up total sales of about $7 billion, up 84 percent from just 5 years ago. At the same time, total Internet sales last year were a much larger $52 billion, up about 22 percent from the previous year.While industry observers don't deny that e-tailers like eBay (EBAY: Research, Estimates) and Amazon.com (AMZN: Research, Estimates) have transformed the Internet into a retail powerhouse, they say that TV shopping networks nevertheless have a strong niche market -- typically women over 40 and stay-at-home-moms -- who aren't likely to shift loyalties anytime soon."Unlike the Internet, TV shopping networks offer entertaining and live programing," said Richard Hastings, chief retail analyst with Bernard Sands. "The Internet has several layers of information that come through as text and images but television is more fun when you're selling something."Added Hastings, "On shopping networks, people model the products, demonstrate how it works and actually make it fun for viewers to associate with what's being shown."Cosmetics creator Adrien Arpel agreed. Arpel, who launched her "Club A" cosmetics line on HSN 10 years ago, has sold about a half-billion dollars worth of her products."When you go on TV as the inventor and creator, you're the best person to sell that product to people because you are the original force behind it and people believe you. Unlike the Internet, here's an intimacy involved here and people get a totally personal service," said Arpel.The top three home shopping networks -- QVC, HSN and ShopNBC -- claim that they're overwhelmed with the number of suppliers clamoring to get a couple of minutes of air time on their channels.QVC, the No. 1 televised shopping service, has annual sales of over $4 billion. Annual revenue for HSN and ShopNBC, the No. 2 and No. 3 players, are about $2 billion and $650 million respectively."Thousands of suppliers approach us each year but not that many make the final cut," said Doug Rose, vice president of merchandising and brand development for QVC. "We look for unique and compelling products and we bring on the inventors, designers and technical experts as guests to talk about their creations."Sometimes guests also include Hollywood celebrities like Suzanne Summers pitching a fitness product or Star Jones of ABC's "The View" exhibiting her jewelry collection.Jewelry designer Richard Jacobs, who lives in Putney, Vermont, didn't approach ShopNBC; they approached him. "They found us nine years ago at a trade show and invited us on. Back then we were so small that we worked out of the living room. Today we have 30 employees," said Jacobs, adding that ShopNBC annually sells about $8 to $10 million worth of his company's jewelry."Home shopping channels are typically under the radar of most people who follow retails. But these are 24 hours, 7 days a week shopping channels that reach over 85 million viewers," said PJ Bednarski, editor of trade publication "Broadcast & Cable." "Most companies in this space have made pretty big efforts to improve the quality of their merchandise. They're not just selling cubic zirconia rings anymore,"Even though jewelry and accessories are hot sellers for the network, ShopNBC CEO William Lansing said the company is looking to broaden its products to other areas such as home furnishing and lawn and garden in order to expand its customer base.HSN spokesman Darris Gringeri said the network sells 25,000 different varieties of products each year, and he credits the Internet for helping boost sales. "We started HSN.com in 1999 and it's growing rapidly," said Gringeri."Initially we thought that we might be cannibalizing our business with our online unit. That's not the case. Our customers can watch HSN on TV and also use HSN.com to search for items they may have missed on TV or shop for other related items."QVC's Doug Rose agreed. "Our customers send orders through both QVC and QVC.com. In that sense, the emergence of the Internet as a shopping venue is not competition for us because it's become part of what we do.