NEW YORK — For many legacy retailers, online sales still make up only a tiny fraction of their overall sales haul.
And yet it’s a much different story at HSNI, the parent company of the HSN home-shopping network as well as brands such as Garnet Hill. E-commerce sales constitute 53 percent of the its total haul now, and an unusually large share of those purchases — 42 percent — are made on mobile devices.
In an interview here at the National Retail Federation’s Big Show, a trade event that attracts swarms of industry professionals, HSNI chief executive Mindy Grossman explained the approach that her company has taken for its digital transformation.
“What I’ve been saying to people is, you need to think about mobile as your new flagship. It’s the place everybody goes to first,” Grossman said. “So when somebody wakes up, they’re going to check the weather, they’re going to check their email. What is going to make them check with you? And it can’t just be, ‘I’m going to give you 30 [percent] off.’”
That’s why HSN has been working to engage customers with other kinds of digital-centric offerings. If you just bought some Wolfgang Puck cookware, HSN might send you a recipe idea that uses your new gear. In September, its Frontgate and Ballard Designs brands launched an augmented-reality experience in which shoppers could use the camera on their smartphone or tablet to capture a room in their home and then virtually try out furniture from an assortment of about 1,000 pieces.
HSN also plans to add regular programming to Facebook Live that might have a different vibe than the segments customers are used to seeing on TV.
Still, HSNI’s digital growth has not been enough to make for smooth sailing for the company in recent months. Its profit nose-dived in the most recent quarter, in part because it divested two businesses but also because it was having trouble connecting with shoppers.
In the corporate division comprised of the HSN channel and website, sales slipped in areas such as fitness and electronics. Speaking with investors earlier this year, executives said this was because consumers in August and September were often flipping their TVs to the Olympics and to coverage of the contentious presidential election.
In other words, even though the economy is relatively strong, they believed the political uncertainty was weighing on consumers’ minds — and their shopping patterns.
“2016 was a very both disruptive and frenetic year,” Grossman said on Tuesday. “If you think about a business where uncertainty is an anathema, it’s around consumer spending and it’s around retail. So I think that certainly had an impact in our world,” Grossman said Tuesday.
Grossman was named chairwoman of the National Retail Federation this week, so she’s looking at these issues not only with an eye toward her own company, but the retail industry overall.
“As much as I do believe we’re in a better place than we were, let’s call it, pre-election, I still think that there are uncertainties,” Grossman said.
As it looks to engage more shoppers in 2017, HSNI will be taking a variety of tacks. For its live programming, the HSN channel aims to offer more broadcasts from outside the studio, such as a recent segment with motivational speaker Tony Robbins at his Palm Beach home. It will soon be airing segments from Nashville and from a movie set, Grossman said.
Elsewhere in the portfolio, the company plans to further test how brick-and-mortar stores might create fresh revenue streams. Its Frontgate furnishings brand, which started as a catalogue business, is set to open a major flagship store outside Dallas. While it already has a small number of physical stores, the Dallas location — with its wine bar and concierge — will serve as a key test of how the concept translates into physical retailing.
One thing you won’t see HSNI do? A major ramp-up of promotions and discounts to catch shoppers’ eyes.
“It’s kind of the needle in their arm,” Grossman said of promotions. “And I would say this fourth quarter was one of the most promotional environments I’ve seen.”
That doesn’t mean HSN won’t offer some deals and specials.
But, Grossman said, shoppers “want to feel that, no matter what the product, they’re getting value for what they’re buying. Now, what does value mean? Value can mean a price. Value can mean exclusivity. Value can mean I can’t get it anywhere else and this is really something I want.”
That’s why when the HSN channel celebrates its 40th anniversary later this year, Grossman is encouraging her team to think first about securing compelling products and experiences.
“The ultimate goal is to give somebody something that they didn’t know they wanted,” Grossman said, “but once they saw it, they had to have it.”