With solid Q3 sales growth despite systems problems, ShopNBC looks ahead
With systems issues rising from its conversion to a new platform now largely behind it, ValueVision Media is looking to the fourth quarter and beyond. Early next year, under a service agreement with a technology provider not yet disclosed, ValueVision’s online shopping channel ShopNBC.com expects to launch enhanced functionality that will, in effect, provide on-demand video of broadband quality to site visitors with dial-up connections, senior vice president of ShopNBC Lyn Mueller tells InternetRetailer.com.
“We will be putting more emphasis on how we bring television to the web, and how we bring segments of video to the web, ultimately enhancing the customer experience and the shopping information available,” Mueller says. Currently, the web site streams ShopNBC live on one of its two video channels and offers alternative videotape and live programming on its second channel. In addition to enhancing video quality for web viewers, ShopNBC.com also will increase its use of on-demand video on the site.
ShopNBC.com is also in the midst of a major web site redesign expected to debut early next year to improve navigation, provide more content on its ShopNBC TV hosts, and expand the page real estate the site devotes to customer service. Additionally, says Mueller, the web site has developed a survey engine that it will start using next year in connection with outbound e-mail, to gain customer feedback on site and service performance.
Troubles with the platform conversion have attracted recent attention and, by Value Vision’s own reckoning, contributed to a loss of $13 million on net sales of $136 million for its third quarter ended in November. But sales at the Eden Prairie, MN-based TV and web shopping network have kept on rising; overall, 24% higher in the third quarter than last year. ShopNBC.com had its best sales quarter ever: at $26 million, sales were up 71% over the year-ago quarter.
Mueller says the web site had success with two fall initiatives including a 20% off clearance effort of high-quality products originally presented on TV that remained in quantities too small to promote on TV. ”The online channel has been great in terms of utilizing inventory and maximizing profitability,” he says. Customers also responded well to a free shipping promotion that went site-wide, with some disclaimers, he adds.
Online exposure through partnerships with portals AOL and Yahoo as well as affiliate provider Be Free have highlighted untapped opportunity for the company online, Mueller says. “We learned that a broader assortment of products created a higher margin of success. When we offered men’s shavers on AOL, for example, we saw people flocking to get this value on a product they normally wouldn`t associate with ShopNBC," he says. In response, Shop.NBC.com in the last quarter has added new categories, such as rugs and floor coverings, that aren`t available on the TV channel.
With sales of $62 million across the TV and web sties last year, ShopNBC is on track to reach about $90 million in sales this year, the company says. Web sales, about 20% of overall sales, are expected to hold steady or increase as a portion of sales.
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