How HSN Stopped Screaming at People and Became a Media Arcade

"We're not Amazon, we're not an aggregator of products — we're a curator of products," HSN CEO Mindy Grossman told TheGrill

Last Updated: October 3, 2012 @ 10:06 AM

Film and television merchandising has long been a cash cow for media companies — "Spongebob Squarepants" knapsacks paired seamlessly with the cartoon, "Star Wars" action figures as critical to the trilogy as Darth Vader himself.

Jonathan Alcorn

HSN — formerly the Home Shopping Network — now sits dead center at the crossroads between retail and media.

In the middle of the last decade, it took a number from Nickelodeon's and George Lucas' playbook when the television network revamped from a 24/7 infomercial to what CEO Mindy Grossman describes as an entertaining shopping experience.

"Basically we had people up there, just selling stuff — there was no context to it, it was more just screaming at people," Grossman said at TheGrill conference Tuesday morning. "We should be as entertaining and engaging as any network."

Now, HSN has product events surrounding popular movies, such as an "Eat, Pray, Love" shopping event that showcases products from Italy, India and Bali — places visited on the protagonists' journey of self-discovery.

It also offers live chats with the networks' hosts, games that can be played on an app while watching the network and an app that alerts users to new products, based on preferences set by the shopper. 

"You can shop, play games," Grossman said, noting that more than 80 percent of her customer base is female.

"Why do you want people to do this?" asked Kara Swisher, the executive editor of AllThingsD who interviewed Grossman on stage at TheGrill.

"We know what our customer likes to do," Grossman said. "She likes to shop, she likes to share — she's on Facebook and other mechanisms. And she likes to play games."

She noted, too, that HSN's website gets most of its traffic referrals from Pinterest, the image board site popular with women.

Grossman challenged the long-revered "Long Tail" theory of internet economics — offer a vast quantity of selection, and customers of all kinds will buy from you.

Rather, she said, HSN aims to provide context to the items it sells.

"We're not Amazon, we're not an aggregator of products — we're a curator of products," she said.

Grossman also rejected comparisons to discounted shopping sites like Gilt, insisting that the business model is stunted from growing in its user base — it relies on referrals to gain new customers — and its brand, if their only edge is offering cheaper prices.

"They have to be able to scale, until now their model for getting customers has been referrals," she said. "At some point that starts to slow down, hence why they've started to do TV ads."

For HSN, becoming a media company required it to overlay a content arm atop its commerce business.

But she said the model can be reversed for media companies, dismissing the "separation of church and state" to protect the "purity of editorial independence."

"From a viewers point of view, it's unnatural," Grossman said. "What's wrong with being able to sell those products?"

Though the audience's George Orwell fans may read dystopian undertones into such a sentiment — "All art is propaganda" — the idea of immersing shoppers in a shopping experience dates back 30 years to New York's big department stores.

She said that, in the 1980s and 1990s, Bloomingdale's would occasionally convert its stores into a Hollywood or Indian escape.

For Grossman, online retail companies can take that a step further — manufacturing shopping experiences themed around films, books or other media.

"There was a number of movies that came out that were so stuningly gorgeous in terms of their costume design," she said.

Then, in August 2010, HSN customers began following the journey detailed in Elizabeth Gilbert's "Eat, Pray, Love," one add-to-cart click at a time.