In its second-largest acquisition, Amazon buys the company for $970 million.
(Page 2 of 3)
But it is also rebuilding ShopAtHomeTV.com and bringing in a new e-commerce general manager. In June, Scripps hired Geoff Smith, former president of e-commerce and business development at Personal Creations Inc., as senior vice president of interactive commerce.
Scripps is also rolling out a redesigned site with an entirely new look and feel. The new ShopAtHomeTV.com site, designed by Fry Inc. and scheduled for rollout this month, features more product graphics, product pages with snappier text, rich media applications that enable shoppers to look more closely at merchandise details and enhanced tools that personalize the shopping experience. Shop At Home Network is also regrouping its product portals, using bigger images to drive traffic to featured merchandise on the home page and adding faster site search using a new program from Endeca Technologies Inc.
Implementing a fresh look and feel is critical to Shop At Home Network to reach a more diverse and upscale audience, Smith says. "With this redesign we are going to target more high income and lifestyle oriented customers with more merchandise and presented in such as way that motivates them to visit ShopAtHomeTV.com and buy," Smith says. "We know who our prime customers are, but we`re counting on a better web site to deliver the experience."
Going forward all e-commerce transactions with the exception of Food Network will be processed by ShopAtHomeTV.com. Except for drop-shipped products, all orders will also be picked, packed and shipped from Shop At Home Network`s two distribution centers in Nashville, Tenn. "It makes sense to bring more of our Internet activity under the Shop At Home umbrella," Smith says. "Having one uniform platform will help us execute faster and react more swiftly to change."
One area where Scripps and Shop At Home Network are looking to make substantial change is in packaging Scripps` highly viewed lifestyle programming and celebrities with merchandising strategies that generate more e-commerce activity. For instance, Shop At Home Network in June announced a new marketing and merchandising deal with chef and Food Network celebrity Emeril Lagasse. He will host a series of three cooking specials on Shop At Home TV and weekly smaller segments and use the home shopping channel and ShopAtHomeTV.com to market products for his private-label line of cookware.
Cooking up a winner
Prior to the first TV special in July, Shop At Home Network developed a special e-mail marketing campaign and then broadcast the air date along with a special promotional offer on Emeril cookware to its opt-in list of 14 million subscribers. The result during the Emeril event was a 130% surge in estimated daily visits to around 125,000 and a 60% increase in estimated average daily sales to about $325,000, according to statistics from comScore Networks Inc. and The Top 400 Guide. "Emeril`s popularity with Food Network viewers and now Shop At Home viewers is a good example of how we can leverage our Scripps cable audience and generate more online sales," Rockmore says.
To drive even more traffic off Scripps programming, Shop At Home Network has made the shopping portals for Emeril cookware, Home and Garden TV and DIY network more prominent on its home page and linked ShopAtHomeTV.com to the web stores on Home and Garden and DIY. Now a visitor who clicks on the e-commerce link on various Scripps network sites is redirected to ShopAtHomeTV.com where the visitor can shop and make a purchase. With stronger synergy across other Scripps cable channels and web sites, Shop At Home Network clearly sees its future as a broader web retailer of home, garden and kitchen merchandise to online shoppers with aspirations of living the good life.
But Shop At Home Network still has its work cut out. The cable network has posted substantial losses in each of the last two fiscal years. In 2004, Shop At Home Network increased total sales 23% to $293 million from $238 million in 2003, but the business also posted a loss of $22 million in 2004 and a similar loss in 2003. For the second quarter of 2005, Shop At Home Network generated revenues of $86.9 million, up 31% from the same quarter in 2004, but the unit`s net loss was $7 million, compared to a loss of $2.7 million for the second quarter of 2004.
Scripps says the losses are attributed to the ongoing investments in merchandising, technology and personnel the company is making in Shop At Home Network`s e-commerce future and revised web retailing strategy. But industry analysts say that to further enhance performance, Shop At Home Network should be looking at ways it can leverage comparison-shopping site Shopzilla, which Scripps bought in June for $525 million. Shopzilla, formerly BizRate.com, features 31 million products from 55,000 merchants and hosts 1 million new consumer reviews of online stores and products each month.
The Shopzilla advantage
So far Scripps is keeping its renewed e-commerce investment in Shop At Home Network and its acquisition of Shopzilla as two separate transactions. "We may look at some synergy later, but right now we`re concentrating on our e-commerce initiatives," says Rockmore.
But as Scripps rolls out a revised web strategy tied to boutique retailing and an audience of shoppers who like tuning into several of the most highly watched niche cable channels, Allen says Shopzilla may hold the key to identifying targeted buying behavior and understanding what`s motivating serious home and garden shoppers to buy.
"The home and garden category is one of the most frequently visited on BizRate.com (Shopzilla)," Allen says. "Just the sheer amount of aggregate data Scripps can analyze for its other e-commerce sites to identify buyer behavior is a real plus. That`s one potential web retailing advantage Scripps will have over other media companies."
Moving past its history
Most TV retailing is conventional and built around a single concept: selling in large volumes the current products and merchandise viewers see on their screen at any given moment. To date most TV retailers have built their e-commerce sites mainly to provide ongoing sales and marketing support to their TV channel.