Chester Higgins Jr./The New York Times On a single live broadcast, Ms. Pearl could reach multitudes and build her brand.
Case Study
What would you do with this business?
We just published a case study about Eve Pearl, a cosmetics company named for an Emmy-winning makeup artist who created a line of products with skin care nutrients. Begun by Eve Pearl in her New York apartment in 2005, the business moved three years later to an Upper East Side boutique with an address befitting the high-end positioning of her goods.
By last year, she had built sales to about $1 million through three primary outlets: retail sales in her shop, wholesale distribution to makeup professionals she cultivated at trade shows, and retail sales on her Web site (which accounted for the vast majority of her business). Eager for faster growth, Ms. Pearl faced a big decision when ShopNBC, the nation’s third-largest home-shopping network, invited her to appear in front of its cameras.
Ms. Pearl immediately recognized both pros and cons. On a single live broadcast, she could reach multitudes and build her brand. But her profit margins would shrink drastically, and waiting 60 days for payment, minus returns, could cause cash flow problems. She worried, too, about whether the mass sales platform offered a good fit for her high-end cosmetics.
Below, you will find the recommendations of business owners familiar with the outcome of a home shopping network appearance. Please use the comment section to share your thoughts. Next week in a follow-up post we will give you an update on what Ms. Pearl decided.
Jen Groover, creator of the Butler Bag and chief executive of Jen Groover Productions, which is based in Philadelphia and New York: “Home-shopping television is ultimately a branding strategy for most vendors. Think of it as your eight-minute commercial. How much would you typically spend on an eight-minute commercial? It allows the creator to tell her story in an extremely saturated category of business. But in order to not jeopardize the equity of her brand, she should offer slightly different product configurations on ShopNBC or create a diffusion brand, a step-down line extension of an existing high-end brand. If Eve Pearl performs well on ShopNBC and her personality shines, she’ll raise consumer awareness and increase her ‘celebrity,’ which should, in turn, increase street traffic into her store. What most people don’t realize is, when products are on a home shopping channel, it actually increases the sales in brick-and-mortar stores.”
Scott Jordan, founder and chief executive of Scottevest, which makes multipocketed travel clothes and is based in Sun Valley, Idaho: “The home-shopping networks typically require a highly demonstrable product and a charismatic owner/entrepreneur to make the presentation. It appears Eve Pearl has those things. Moreover, QVC told me they appeal primarily to women buying for themselves — so she qualifies for that as well. But unless you have excess inventory, like we did, or insane margins, or you do real volume with them, you need to consider it a complete advertising proposition.”
Bethany Karlyn, founder of Prtty Peaushun Skin Tight Body Lotion in Sherman Oaks, Calif: “Maintaining a high-end brand image in a home-shopping venue is not the challenge it once was. In fact, she’ll find herself in good company. The schlock impression has changed with high-end brands such as Elizabeth Arden, Benefit, Lancôme, Vincent Longo, Lorac and Shiseido, on HSN. On QVC, Perricone has a two-ounce product selling for $495. Since cosmetics are an aspirational product and every socioeconomic group is aspiring to the next level, exposing only the top 1 percent to your brand is a death sentence.
“You may want to consider hiring P.R. to further your reach, if it is within your budget. If not, then do an in-house outreach to beauty editors and beauty bloggers to review your products and expand your social networking to promote. Encourage your celebrity clientele to support you with tweets and perhaps an appearance on your shopping network segment or at least a call-in during the segment. You may also want to consider freshening up your Web site so it is as beautiful to enter as the physical store itself.”
What do you think?
Article source: http://boss.blogs.nytimes.com/2012/09/26/would-a-home-shopping-appearance-damage-a-high-end-brand/?partner=rss&emc=rss