Rogers' secret retail weapon: The Shopping Channel

MISSISSAUGA — The Globe and Mail

To accommodate new HD cameras, Rogers had to rebuild sets and replace appliances. (Matthew Sherwood for The Globe and Mail)

It’s not unusual for Steven Goldsmith to race from his 55th floor penthouse in central Mississauga to The Shopping Channel’s nearby studios late at night to anxiously watch the on-air talent offer the daily special to hundreds of thousands of Canadians waiting for the right deal to cross their screens.

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Consumers may be turning to the Internet for bargains and gigantic U.S. retailers are driving down in-store prices across Canada, but Mr. Goldsmith, the channel’s president, is convinced the boring, old-fashioned television is the secret retail weapon Rogers Media Inc. can use to boost its profit.

So every night, he pays close attention to the channel’s 10 p.m. “ShowStopper” to see if the changes he has been making are increasing sales.

“It’s just so exciting,” he says of the daily special. “It’s not like I’d be able to sleep anyway, it’s easier just to make the quick trip. We’ve had a bit of an awareness problem, but not a negative perception problem. That makes my job a little easier.”

The channel will be rebranded Friday, as its parent company unleashes a massive campaign on 24 television stations, 50-plus radio stations and dozens of magazines in an effort to persuade more women to spend less time in malls and more time watching television.

The promotional push comes eight months into Mr. Goldsmith’s tenure, as the channel posts double-digit sales and profit growth built largely on return customers who are using the channel’s new apps and Web presence to delve deeper into the deals they see on television.

It’s a welcome bright spot for Rogers Media, whose magazines and conventional television networks are facing tough advertising markets.

“We’ve paid more attention to this channel in the last four months than we have in the last four years,” Rogers Media president Keith Pelley said. “The Shopping Channel is probably one of the biggest surprises I’ve had at Rogers Media – the biggest thing we can do now is build some awareness.”

A study by research firm NPD Group suggests the products the channel offers are among the most popular items among Canadian online shoppers.

Online sales – where Mr. Goldsmith sees the greatest potential for growth – accounted for 4 per cent of all retail sales in 2012 (up from 0.5 per cent in 2011) as consumers bought clothes, electronics, toys and health and beauty products.

While Rogers does not report financial information for its channel, the Florida-based Home Shopping Network is undergoing a similar resurgence as consumers pair the company’s television channel with websites that make for easy buying. Its sales were up 6 per cent from last year to $812-million (U.S.) despite a sluggish U.S. economy, with the average purchase up 4 per cent, to $56.49.

That gives hope to the flashy retail executive, who was credited for increasing sales eightfold while at ShopNBC and once reported to Jeff Bezos at Amazon.

“Those sorts of numbers tell me we are underpenetrated versus the U.S. shopping network,” Mr. Goldsmith says.

To bridge the gap, he has refined the network’s focus on women aged 30 to 60 and changed the way products are offered to better appeal to the demographic. Many of its products come with celebrity endorsements, for example, and those celebrities are now showing up on air far more frequently because sales spike when they do.

“The one thing a shopping channel can do really well is sell using the power of product demonstration, reminders of the benefits made possible by product features and encouragement from the show’s host,” said Kenneth Wong, a marketing professor at Queen’s University in Kingston. “They can do all that with no in-store staff to train and no displays to set up.”

The Shopping Channel’s studios are being rebuilt for high-definition broadcasts, an elaborate process that requires the channel to replace fake refrigerators and ovens with the real things and to use authentic tiles and wood trim where cheap imitations once sufficed.

Mr. Goldsmith also had the channel develop apps to enable easier purchasing, and made it easier to find replays on the website to help consumers make up their minds. The channel’s main advantage, he believes, is its ability to show consumers what they are buying and how it works.

“We’ve decided that having a strategy is actually a really good idea,” he says. “We decided which customers to target, and now we will communicate to her in a specialized fashion about what she truly wants.”

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Company Price Change Volume
Rogers Communications
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