Analysis of Home Shopping Network (HSN)

Introduction

Home Shopping Network (HSN) is an interactive multichannel company that offers differentiated and innovative experiences to customers through various platforms, which include televisions, mobile devices, catalogues, outlet and retail stores (HSN, 2016). The corporation creates value to its clients by offering them eight brands. Additionally, the company operates in two major operating segments; Cornerstone and HSN. The Cornerstone business segments, on the one hand, is made up of aspirational and interactive home as well as apparel lifestyle brands that include Chasing Fireflies, Frontgate, TravelSmith, Granet Hill, and Ballad Designs. The segment operates seven distinct digital sale suites and, as a result, distributes approximately 325 million catalogues every year (HSN, 2016). It also has a total of eleven retail as well as outlet stores. On the other hand, HSN is a lifestyle and interactive entertainment retailer, which offers an assortment of exclusive products as well as top brand names to its clients. It achieves this primary objective through television home shopping programs available on the wide range of HSN’s television networks. It also attains this through programs on other direct response television marketing platforms, mobile applications, outlet stores, and digital commerce, mainly thought its business to customer (B2C) site (HSN, 2016). Ideally, HSN incorporates inspiration and famous personalities who provide a very unique shopping experience to clients.

Growth Strategy

The company’s headquarters are located in St. Petersburg, Florida. However, the stores enable the customers to access the firm if any need arises. The history of the corporation can be traced back to when the HSN’s predecessor business started broadcasting television home shopping programs from its main studios. The company then continued to broaden its national network for distributing its products through a coordination of broadcastings systems, such as cable and satellites.

The firm goes on developing its catalog business by expanding its portfolio. The company also initiated efforts that are geared towards strengthening its portfolio of lifestyle apparel and aspirational home catalogue brands (MarketWatch, 2016). As a result, it acquired Chasing Fireflies LLC, which is one of the premium children brands in 2012. The company has also continued to acquire some other firms as a way of broadening its operations further.

Competitive Strategy

HSN operates in an environment that is highly competitive (S & P Capital IQ, 2016). Businesses and brands offered by the corporation compete directly for consumers with both online and traditional retailers. Such competitors range from large department stores to electronic sales, mail order as well as catalogue companies, specialty shops, and direct marketing retailers. The principle competitive factors utilized by HSN include brand recognition, customer experience, convenience, accessibility, as well as value, selection, and quality of merchandise (MarketWatch, 2016). The company uses these competitive strategies that are aimed at countering the efforts of the competitors.

Marketing and Merchandising Strategy

HSN offers a broad assortment of differentiated products to its customers in a more compelling, entertaining, and informative manner, which ensures that the clients are inspired and regularly engaged to keep them shopping with the company. For instance, the firm frequently collaborates with different experts from a wide range of fields to present special events advertised on the HSN television networks. The networks feature the main products offered by the company to the customers. The events are usually staged at the HSN’s televisions or just on some other platforms (MarketWatch, 2016). Some special events are also featured on HSN.com. Therefore, customers are in a position to follow the firm’s live broadcast in a bid to obtain any information they need concerning the products offered by HSN. It also seeks to enhance its distribution channels by integrating a gamification strategy in its e-commerce platform. It is aimed at promoting customer engagement and loyalty. A large number of video demonstrations of its products focusing on how to use the products are also shown in the company’s network.

In a bid to promote its efforts in creating differentiated brands, HSN seeks to provide its clients with very unique products. The goods are manufactured on a special demand and can only be purchased through HSN. As such, the customers cannot obtain the same products in any other shopping center or any other shopping site. Additionally, HSN also partners with numerous leading brands and personalities so as to develop product lines which are exclusive to HSN. The company aims to use these affiliations to enhance the awareness of its products and its brand among the clients. It also increases the extent to which the goods sold by HSN are featured in the media. In other cases, vendors form an agreement where they market their HSN affiliations to the customers they serve (MarketWatch, 2016). The vendors notify their clients when the necessary products will be ready and when they will be featured on HSN’S television networks.

The marketing strategy adopted by HSN aims at creating customer loyalty through rewards and benefits. For instance, the company has a credit program that offers credit cards to the loyal consumers. All of the latter receive then certain benefits and rewards, which are specifically designed to promote and recognize client loyalty. The customers are also able to identify themselves with the company, the main strategy of which is enhancing customer loyalty. The firm designs, administers, and then executes the marketing programs in a way that promotes the use of the credit cards engaging new, potential, and current clients. The sponsoring bank funds most of these programs.

The company also creates promotional partnerships with other media corporations. Some of these collaborations provide opportunities where the business is able to offer some specific information to its customers. Additionally, some of these companies offer HSN an editorial authority while securing print advertising aimed at promoting national lifestyle and fashion publications to different markets. HSN also participates in innovative promotional partnerships as well as joint marketing collaborations with other major motion picture corporations. The company also partners with many well-known artists, who perform in different events geared towards promoting the firm and its products. It also employs a search engine marketing as well as targeted offline advertising. The former, on the one hand, is used to cater for clients who engage in online activities. On the other hand, offline advertising is used to serve customers who do not engage in online activities regularly. Formation of strategic alliances with other world class consumer brands also enhances the company’s marketing and distribution efforts (EDGAR Online, 2015). The marketing strategy adopted by the firm not only aims at generating additional revenues and creating brand awareness but also providing the unique customer experience. It has created a sustainable marketing strategy by driving client engagements and positioning the company’s products in the market. As such, the marketing strategy has been very powerful and a great marketing vehicle for advertising the firm’s products.

Customer Service at HSN

Customers are the most important assets in an organization. HSN provides its clients with viable and very convenient options with regard to purchase, payment, as well as shipping of the merchandise. Some of these services vary largely from one brand to the other or even from product to product. For instance, it is possible for the customers to purchase the company’s merchandise online, order them using toll-free numbers or through mobile devices. Additionally, the clients can also access the firm’s products through live sales and service agents (EDGAR Online, 2015). Offering of automated attendants also provides convenience to the customers. However, this is offered in limited markets. The company also seeks to enhance its customer service delivery through providing different payment options. For instance, the traditional payment possibilities, such as debit cards and credit cards will fit the conservative clients. HSN also offers the contemporary payment options to its customers, which include PayPal, Flex Pay and private label credit cards. The Flex Pay enables the consumers to acquire the goods on credit, but with interest free payments. Auto ship programs offered by the company also ensure that HSN provides convenience to its clients. Through the auto ship program, the customers can have their merchandise shipped automatically and pay for them by instalments. Other express and standard shipping options are also availed to the clients. In case of problems with the merchandise, the customers are provided with an opportunity to return the goods, but only in accordance with the return policies. They are also able to obtain a full refund of their money in case they return the goods previously purchased.

Customer service and convenience are also achieved by fulfilling clients’ orders and later processing the returns on time. To achieve this, HSN has established a number of fulfillment centers in different parts of the USA (HSN, 2016). Timely delivery is also done through partnering with the third party carriers as well as other helpful partners, who are able to deliver the goods to the customers at low cost and on a timely basis. Clients are now able to track their goods once ordered through the use of common carrier websites. Additionally, the consumers can now communicate directly with HSN customer service through telephone or emails. The agents are available all the time to keep the clients in touch with the company.

Governance and Government

Operating in accordance with the government regulations is a key in achieving long term sustainability for a company. The extent to which a firm succeeds in its operations will definitely be determined by the extent to which it is able to act in line with the laid government regulations. HSN offers and markets a wide range of products through different platforms, such as television, catalogues, and other channels (MarketWatch, 2016). All company’s dealings are regulated by a number of local, state and federal laws, policies, regulations as well as produces. Some of the firm’s operations, which are subjected to promotion government regulation and supervision, include sell and promotion of the corporation’s merchandise and representations and claims made by HSN.

Government regulations are an important part of a company’s external environment. It owes to the fact that the firms have no control over the policies and regulations which are implemented by the government. As a result, the company is left with no other option rather than having to comply with them. Additionally, most of these government strategies keep on changing from time to time, hence making the sustainability of the strategies geared towards complying with the government policies quite unsustainable (EDGAR Online, 2015). However, the governance of the company has ensured that the practices undertaken by the firm are structured in a way which ensures total compliance with the set rules and regulations; whether local, state or federal. Failure to comply with such regulations may imply a lot of consequences which might significantly affect the corporation’s operations.

Human Resources Strategy

HSN employs appropriate human resources strategy. For instance, although the company has a large workforce, no one of its employees is represented by unions or any other similar organizations (EDGAR Online, 2015). As such, the firm considers its relations with its employees to be outstanding. Human resource strategy dictates that the company puts in place measures which are aimed at obtaining the best employees in the market as well as training them so as to enhance their skill sets.

Risk Factors

Any business is faced with threats which might materially affect the company’s operation. Some of these risks are related to the internal operations while other factors pertain to external factors. On the one hand, some of the threats which face the company may not have significant effects on its operations and hence are considered immaterial. On the other hand, other risks have the potential of greatly affecting the firm’s operations.

The threats to the business include the following aspects.

Intense Competition

HSN operates in a highly competitive and rapidly evolving retail business environment. There are a number of competitors, both at local and national levels. Many of these rivals are larger and possess more resources compared to HSN. Additionally, some of the competitors have a longer history, more customers and a stronger brand. As a result, they are in a position to secure quite better terms from suppliers and vendors agencies being in a position to adopt some more aggressive pricing techniques (HSN, 2016). There is also a treat of new entrants as some other companies may form business alliances which, in turn, strengthen their competitive positions.

Revenues Are Subjects to Attracting and Retaining Television Views as Well as Securing Suitable Programing

HSN depends largely on its continued ability to compete effectively for the available television views. However, the failure to attract and retain these television views can result in a serious decrease in the company’s revenue. The rise of digital technologies as well as the adoption of digital cable has resulted in the increase in channel capacity (HSN, 2016). Time-shifted viewing is also possible through the use of devices such as personal recorders and interactive television devices. All these aspects have the potential of significantly reducing the company views.

Interruption, Redundancy and Lack of Integration

Interruption, lack of integration and redundancy in the company’s systems as well as infrastructures may adversely impact on the firm’s ability to operate websites, responds to customer inquiries, maintain cost effectiveness in operations and its ability to broadcast (EDGAR Online, 2015). It may significantly affect its operations.

Conclusion

HSN is an interactive multichannel retailer, which offers differentiated and innovative experiences to customers through various platforms which include televisions, mobile devices, catalogues and outlet and retail stores. The company has continued to develop its catalog business by expanding its portfolio. The marketing strategy adopted by HSN aims at creating customer loyalty through rewards and benefits. The principle competitive factors utilized by HSN include brand recognition, clients’ experience, convenience and accessibility as well as value, selection and quality of merchandise. However, the company faces some serious threats in its operations which include; intense competition and the fact that revenues are subjects to attracting and retaining television views as well as securing suitable programing.

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