The Electronic Retailing Association

Global Industry News Update: Seven areas of focus to succeed 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 recession may not be official but everyone is feeling the pinch.  Some can name their enemy as Brexit, the China War or general malaise but the pressure is mounting and companies are cutting where possible.  The problem is many cuts to the bone is leaving customer service stressed and suppliers angry.

Across the industry, we are experiencing extensions on terms and what was once an industry standard of 30 days seems to be stretching and in some cases exceeding 90 days.

The TV shopping industry is not the only retail format to see pressure on suppliers.  We know that physical stores have had years of rental increases and only recently, after many closures, have we seen a few cases where rents were renegotiated down to sustainable levels.

Our customers are important and maintaining high service levels for them is essential, but why are we making the life of suppliers more difficult? Why is it so hard to return calls or provide a system to answer and help suppliers? We are not running a charity and the big clients deserve extra special handling but small suppliers contribute as well and provide much-needed variety.

Viral, word of mouth and guerrilla marketing teaches us that one customer has dozens of contacts within their network and social media now drives audiences in the tens of thousands.  It does not make sense to make the business for suppliers difficult.

Some companies drop a supplier with little notice or concern for their inventory issues.  Our industry should behave better and provide notice as soon as possible.

The age old technique to show profit while holding back suppliers fees should be tracked and reported.  Recently India’s Homeshop 18, the first and at one time largest TV shopping channel in India, closed and defrauded vendors of $26m USD.

We know video sells, we are great storytellers and we deliver solutions at fair value. But can we surmount the next challenge and ride on the wave or will we continue to do the same old thing until we drown in the flood of new, better and safer?

Qurate’s stock has dropped year in the past from about $25 to $10 and the HSN merger may take some time to produce results.  Evine made the transition to Shop HQ with new management and plans to expand and open more channels.  But how are people going to watch infomercials if they are binge-watching on commercial-free Netflix or Amazon Prime?

Streaming continues to grow and everyone is jumping in from Apple, Disney+, Quibi, HBO Max and NBCUniversal to name but a few.  The explosion of media, especially commercial-free programmes and video games, along with more time spent on social media means less time to watch and buy from DRTV and live TV shopping.

It's not as easy as it sounds to be multimedia savvy and appeal to both traditional and millenial or GenX customers.

So, what are the areas we should focus on to succeed in these times?

#1

Expansion to all platforms & exploration of new markets

#2

Sell experiences & travel & services such as insurance

#3

Video works everywhere in stores and mobile video

#4

Print is a dynamic format when properly focused.

#5

Fewer but better products with a vision for the next trend & innovation

#6

Quality of message which delivers real value & benefits

#7

Respect for vendors and customers

Your business model is under threat and the challenges are not going to get any easier. The competition will heat up and big data, robotics, AI and technological innovation is not always safe, easy or happy. We have a digital, empowered, disruptive and fragmented media market. There are more layers of demographics and the economy is fragile.

The industry will see accelerated acquisitions, mergers or closures.  Fewer but bigger companies will emerge but they will also be susceptible to sudden downtrends as consumers search for their next new desires.  They seek the new and different, the shiny and clever, the green and environmental as well as space and time savers.  The use of plastic is going to become an even bigger issue as will child labour and pollution.

We know video sells, we are great storytellers and we deliver solutions at fair value. But can we surmount the next challenge and ride on the wave or will we continue to do the same old thing until we drown in the flood of new, better and safer?