The Electronic Retailing Association

Global Industry News Update: In Challenging Times Everyone Probes For A Path Forward by Budd Margolis

Budd Margolis, President MIT Consulting, and Global TV Shopping expert

Budd Margolis is President MIT Consulting, and a Global TV Shopping expert who specialises in TV Shopping, Social Media Retailing & eCommerce/interactive retail, covering many areas of the industry such as improving, fundraising, industry forensics and expert testimony. Budd started his TV shopping career with QVC UK and has worked with TV and TV shopping channels across some 50+ countries helping companies & suppliers improve sales and profitability. Budd is American but lives in London, UK.

The ERA Global conference in Budapest featured a day of educational presentations and speakers (at the MCMS Congress) who covered various aspects of our industry. If you missed these valuable sessions, next year do strategise and plan as our industry is headed for continued disruption. Some of this disruption will lead to new and credible opportunities for those who are looking forward.

Many in our industry look at Amazons attempts at video content with doubt if not outright derision, but few get the learning process which is going on in Amazon.  The question to our industry is when will we also be engaging with the new younger customer?

The MCMS Congress also enjoyed presentations by Shark Shopping of China and Indology the Indian jewellery & fashion channel representing the worlds two largest populations.  Both are TV shopping success stories with a future and they shared their dynamic formats and facts.  TV shopping is evolving and some are getting it right!

Across the world, the trend away from TV viewing and towards Netflix and Amazon, as well as other streaming services, continues to grow and take market share. TV is not dying, not just yet, but it is transforming into smart viewing.

On July 4th the Communications Market Report 2019 was published.

TV made up for a 4% decline in net ad revenue with TV shopping and sponsorship offerings. Meanwhile, an 11% decline in local advertising in radio was overturned by a 5% increase in national executions, a 7% increase in sponsorship and 18% growth from other sources such as on-air competitions.

Lots of people are still watching TV, but they are watching for less time. The average weekly reach for TV was 88.5% in 2018, down from 90.2% the previous year. The amount of time spent watching TV on the TV set is falling faster than reach – the average number of minutes that people in the UK spent watching fell by 11 minutes to 3 hours 12 minutes each day. The PSBs and their portfolio channels accounted for 71% of viewing. Declines in the amount of time spent watching live TV are more pronounced among younger audiences. Those aged 16-24 spent an average of 1 hour 25 minutes each day watching live TV in 2018, 15 minutes less than in 2017, while 25-34s watched for 2 hours 2 minutes, 18 minutes less than in 2018.   Source: Communications Market Report 2019

Amazon Prime Day Streamed on gaming platform Twitch, and replicated a TV shopping channel.

In 2018 Amazon sold $4.19 billion worth of goods on Prime Day, up from $2.41 billion in 2017.  More than 100 million products were purchased by Prime members in 17 countries and this year will showcase a TV shopping channel 12 hour livestream  stream on July 15th & 16th at 10:00 am to 10 pm Pacific Time USA by running a two-day TV shopping channel livestream July 15 and 16. Twitch Sells Out: A Prime Day Special Event showcaseD gaming, electronics and other products in two 12-hour broadcasts.

2019 sales surpassed Black Friday & Cyber Monday combined with over 175m items sold.  The top sellers were the Amazon Echo and Fire TV Stick devices as well as the Lifestraw, Insta Pot and 23ANDME DNA ancestry & HEALTH test kits were the top sellers. The event created the most prime member signups of any day previous and surpassed over $5b in sales top from $4.2b in 2018.

Amazon Twitch Prime

Sells Out: A Prime Day Special Event featured deals on many of your favourite games and gaming peripherals, to kitchenware and electronics.  The full list will be revealed on July 10.

"They'll also dive into previously unseen demos and gameplay of some of the most anticipated releases of the year. And you can buy or preorder it all instantly on stream."

Intriguingly, Twitch also promised to highlight some of the weirder items that'll be on sale. You'll be able to watch the stream from anywhere in the world, but only people with US Prime memberships will be able to jump on the deals.  Last year Amazon Prime members received an extra 10% discount.

Amazon continues to learn with Style Code Live and Amazon Live they get the “live” bit, soon they will have the “DNA of TV shopping” and begin to dominate this video salesmanship sector.  Twitch is the most exciting initiative in Amazons quest to discover and exploit how this industry works.

Hyundai Home Shopping's "Open Shop"

Australia: ASN is now OPEN SHOP

Hyundai said it aims to reap accumulated sales of 100 billion won ($85.5m USD) by 2021 investing A$45 million Australian dollars (($31.65 million) in the venture.  On Aug 1st pen Shop on channel No. 75. can be seen on the Seven Network, a major Australian commercial free-to-air television network, reaches 6m homes.

Evine is now rebranding into ShopHQ again, a dozen TV shop channels are either looking for investment or are on the block and although some are growing, many are losing revenues to a perfect storm of digital competition and social changes to the consumer market.

India’s TV Shop Founder floundering

India’s TV Shop Founder floundering June 6th, India’s 2nd largest conglomerate Reliance and their Network18 their media group sold their majority stake of 82.6% in HomeShop18 to SkyBlue Buildwell, a real estate company. On the 27th of June the new management of Homeshop 18 released this statement:

The company is in the process of engaging with and is in discussions with various strategic investor funding. Our TV channel ,broadcasting network, website, App and content creation capabilities are best in class and have substantial asset value. Similarly the rich customer connect and pay in India reach is a valuable asset. We are also in the process of optimising our costs to ensure that we are competitive improve profitability. We are well positioned both in terms of technology and podcasting capabilities these of vis-a-vis our competition Naaptol & Ezmall.

We have face disruption in the last week due to certain persons obstructing staff from working. This issue has been resolved and we have resumed our operations. We understand that there are certain and motivated elements behind the recent disruptions. We must ensure that their efforts and are successful and we are able to defeat all the disruptive forces and thus enable our Company to scale greater heights.

Looking forward to your proactive support.

Yours Sincerely,

Hardik Shah CEO

The disruptive forces? Vendors once again stormed the Noida offices because they are owed funds as ownership passed from India’s no.2 wealthiest company to a real estate company no one ever heard of.

What caused the collapse?

On September 24, 2018 there was a report that Tata Sky, India’s second largest DTH platform with 25% share of the active pay DTH subscribers market of 67.53 million, discontinued 37 channels on its platform including ShopCJ and Homeshop 18.

PM Modi’s policies of demonetisation hit the COD home delivery industry hard and the recent GST tax system as well as weak economy, loss of viewers, loss of revenues, all combined to form a perfect storm. The perfect storm brewing against this industry includes many variables such as a trade wars and climate change.

Amazon has been surviving Government assaults with stricter rules but is emerging and a real predator competitor. Homeshop 18 had great success at one time with nearly $1m a day revenues but they over built and grew to meet projected growth and demand that never materialised and was then assaulted by quicker hungrier competition. Selling on price alone means the quality suffers, customers lose their loyalty and sales weaken.

Homeshop 18 may still recover but it will have to make some bold and radical changes. The DRTV market has some credible company its but there are also religious and magic cures which tarnishes the industry. When there were three major TV shop channels, just a few years ago, they often sold the same items at about the same price at the same time and in the same manner.

Some are getting it right

The one significant differentiated channel is Jaipur based Indology which has rebranded from the jewellery channel Gemporia, and now sells fashion and other items. Their customers are loyal and repeat customers and the ASP is $60 or 3X the national TVHS average.

Shop Bazaar available on Dish TV Dth and Videocon Dth expects to breakeven by October 2019.

Streamlining India’s Retail Long Overdue

The Govt will release draft national retail policy in July. The DPIIT is the new agency for domestic trade covering both offline and online retail. The industry, which has been campaigning for a national policy and plans to solidify policies in September provide a window for feedback. India is plagued with bureaucracy and as many as 28 licences and permits are required before someone can trade. The newly re-elected Modi Government wants to promote digital payments and to have subsidised bank charges on card payment transactions to promote their use at retail outlets.

India Economics and Weather

Unemployment is up, growth has slowed and there is a dark cloud over the nation as the pre-monsoon season this year is the second driest in 65 years and the driest was in 2012. The drought has a severe impact on agriculture and drinking water for many cities. Nearly 50 per cent of India grapples with drought-like conditions.

What impacts the consumer, alters their consumption. It is time we begin to address issues of climate that are changing societal dynamics and our industry. Screen addiction is just as much an influencer on consumer behavioural patterns as the economy or weather.

Blaming disruptive digital entities such as Amazon and Netflix and mobile phones will not deliver vision and innovate solutions. Tomorrows consumers have changed todays retail landscape, they want more than products, more than brands, they expect experiences to believe in.

Evine changes to back to ShopHQ - New ticker: EVLV to become IMBI

The channels name will be changed to back to ShopHQ (2013-2015) and the new company will be called iMedia Brands Inc. The company's stock was to be delisted from Nasdaq on July 22nd but is now listed on the Capital Market exchange, a Nasdaq marketplace of small-caps with less-stringent listing requirements than the mid-cap Global Market EVLV was listed on. This manoeuvre delays the $1 requirement for 180 days. Shares have been trading recently at about .43 cents.

Turn around plan: 11 Senior exec’s and the CEO are gone, the new CEO and once former CFO Tim Peterman has been driving the new turn around strategy. The hallways and meeting spaces at corporate headquarters are getting a fresh coat of paint. iMedia has plans to launch a Spanish-speaking shopping channel called LaVenta Shopping Network and the Bulldog Shopping Network focused on merchandise for men. Invicta, a Miami based watch company and the major supplier, has injected $6m.