April 2, 2023

You’re the Boss Blog: A High-End Brand Tries a Different Sales Channel

Case Study

What would you do with this business?

Eve PearlChester Higgins Jr./The New York Times Eve Pearl

Last week, we published a case study about Eve Pearl, an Emmy-winning TV makeup artist who founded a cosmetics company by the same name. In June 2011, with online sales and traffic at her three-year-old Manhattan boutique slower than desired, Ms. Pearl, 46, listened hard when ShopNBC, the nation’s third-largest 24-hour home shopping network, invited her to appear live with some of her high-end products.

She weighed the pluses: her experience in front of the cameras on several “Today” show product demos and a potential audience of tens of millions. And she considered the negatives, among them: a possible worsening of cash flow because of the shopping network’s payment terms and the fear of tarnishing her top-drawer brand in the hurly burly of home shopping TV.

Last October, Ms. Pearl stepped in front of the ShopNBC cameras, first at midnight, then again at 2 a.m. and 7 a.m. She returned to the networks’ Minnesota studios the following month and has reappeared every month or so, as recently as last weekend. The exposure has had direct and indirect benefits. Ms. Pearl estimates home shopping sales will reach seven figures this year — and represent about a third of her total revenue. And rather than losing any luster because of this added sales venue, she feels her brand is sparkling even more. “Traffic both in the store and on our Web site spikes every time I’m on air — about 30 percent,” she said.

Did you feel that you might be gambling the future of your company with those live appearances?

No, I felt very confident appearing on air with my products. Makeup is a very visual, emotional product and you can see the results happening right in front of your eyes. It’s not like you have to wait a few weeks or months to see the results. Doing live makeovers on the “Today” show and at trade shows, my experience has been, people see it and that’s how they fall in love with it.

One of your concerns about selling your goods this way was a possible cash-flow problem. Did this happen?

Yes, we did face cash-flow problems. We went to Citibank and took out a small-business loan, because it took about six months to start seeing our first significant payments coming in.

And you’re now cash-flow positive?


How many ShopNBC appearances have you made?

I’ve been on a couple dozen times. Sometimes we’re on for as long as an hour, sometimes we’re on three times for 15 to 20 minutes each time.

What would be your advice for someone thinking of selling products on a home shopping network?

It’s important to realize this can’t be your only sales route, because if it doesn’t sell here, you have to have another channel of distribution. Your stuff might not move — so what are you going to do with it when it all gets sent back to you, on your dime? That’s why people are so afraid of it. It can make incredible successes, but it also can cause the B-word: bankruptcy.

I also think it’s wise to start by testing the waters with only a couple of hero items. Our hero items are our high-definition dual foundation and our salmon concealer. Not only do they continue to sell for us, but they’re available on auto delivery. Customers receive the product every two months and they’re automatically charged. We’re up to four items now on auto delivery.

That’s the holy grail, right?

Exactly. That’s the goal, really. To have things go on auto delivery where you don’t even have to appear. As buyers develop more trust and loyalty to your brand, they’re apt to try more new products and more of the unique things like lipsticks and mascaras.

Do you have auto delivery on your own Web site?

We do not, right now, offer auto delivery. We are working on that.

Several readers echoed the Prtty Peaushun creator Bethany Karlyn’s suggestion for a makeover of your current Web site. Do you agree?

I absolutely agree. My Web site does need a makeover. It’s not clean and user-friendly, and the experience is not as smooth as I would like it to be. It’s like a candy store, which is not what we’re about. I’ve wanted to do auto delivery for a year. It’s frustrating. I’d love to find someone who can help me make the Web site that I have in my head.

Are there any indications that you tarnished your brand or cannibalized your Web business?

No, I really think we’ve kept our high-end brand image. It’s not like we’re selling millions of pieces. When I appear on air, one of my Emmy awards is sitting there. I challenge any high-end brand to provide a better-quality product with better education and better service. In fact, actually, every time we appear on ShopNBC, our Web sales increase — even though they’re offering our products at lower pricing.

What percentage of your 2012 sales do you expect will come from ShopNBC?

Right now, the purchase orders that have gone out represent about one-half of our business. The money that comes back is about one-third of our revenue. I’m happy with that, because it’s also allowed us to test out that market, and that will enable us to take this sales model into other countries, like QVC Canada or QVC UK. We hope to get into Canada before the end of the year.

A version of this article appeared in print on 10/04/2012, on page B8 of the NewYork edition with the headline: High-End Brand Tries ShopNBC.

Article source: http://boss.blogs.nytimes.com/2012/10/03/a-high-end-brand-tries-a-different-sales-channel/?partner=rss&emc=rss

You’re the Boss Blog: Would a Home-Shopping TV Appearance Damage a High-End Brand?

On a single live broadcast, Ms. Pearl could reach multitudes and build her brand.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