According to market research company Euromonitor, internet retailing caused a decline in current value across New Zealand’s home shopping market during 2014.
“While direct selling benefits from offering social interaction and person-to-person advice, homeshopping offers few advantages in comparison to internet retailing,” Euromonitor says.
Internet retailing offers greater ease of ordering, better range and, often, lower prices. Customers are also getting greater access to the internet through mobile devices.
In a twist on the traditional home shopping model, The Warehouse sells 'As Seen on TV' products through its stores. A spokesperson says these products are typically advertised on television with the tagline "available now at The Warehouse" so that sales are driven through its bricks and mortar stores and online stores.
"As Seen on TV products are unique in that their benefit is not widely understood by the consumer – until they see the product demonstrated on the TV," she says. "The product might be hard to explain with packaging alone, and therefore not able to sell itself off the shelf. As Seen on TV products generally have some real advantage – in either a time or cost saving – which captures the imagination of the customer, to the point that they will go looking to buy it."
Once a small portion of the target market understands the product, the spokesperson says, word of mouth kicks in and the product sells well. She listed examples of successful As Seen on TV products: the Perfect Pancake Maker, which makes four pancakes at a time; the temporary Snap Screen fly screen; BBQ Steam Zoom cleaner and an extendable hose for small gardens.
Not every traditional television shopping network has had to change tack, however. Kiwi television shopping network Yesshop last month signed a deal with Australian network Foxtel allowing it to launch a new shopping channel in Australia in early 2016. Yesshop’s head of TV production, Phil Dodds, says this will be the first time a dedicated 24/7 TV channel will broadcast ino Australia from a Kiwi studio.
“We are delighted to take Yesshop to the Australian market,” Dodds says. “Home shopping through television and online is a growth industry. This deal gives manufacturers and producers of the right goods the potential to sell to Foxtel viewers – as well as the 10.5 million South Koreans subscribed to Hyundai Home Shopping Mall and New Zealand’s Yes Shoppers.”
“We will bring new, innovative products and ideas to the Australian marketplace, and aim to outperform established players,” he says.
Yesshop’s staff numbers have been rapidly increasing, shooting up from 40 in April this year to 55. A representative from the company says its revenue has increased by 120 percent over the last year, and says it outperforms an unnamed competitor by 30-40 percent. Yesshop already has an office in Korea, and anticipates opening an Australian office in 2016.
The company was launched in 2013 by Paul Ding, a New Zealander who is director of a listed South Korean technology company called KD Media. The National Business Review reports that Ding took senior executives and presenters from Yesshop’s predecessor, the Shopping Channel.
Backed by Ogilvy & Mather chief executive Greg Partington, the Shopping Channel launched in 2012. The NBR reported it had been sold in 2014 after racking up debts of more than $4.8, but in the same year, the company filed for a name change and became The Collectors. Companies Office records show Partington’s company Waitapu Holdings remains the majority shareholder.
Yesshop operates out of a studio in Auckland. It airs in New Zealand on Sky’s channel 26 and Freeview channel 21. The network established a supply agreement earlier this year with H-Mall, the online platform of Hyundai Department Store Group and Hyundai Home Shopping in South Korea, meaning Korean shoppers can order New Zealand products online.
Television shopping is exceptionally strong in South Korea. Euromonitor says sales in South Korea’s home shopping market grew by 11 percent this year, taking the network up to 10.6 trillion won (NZD$13.7 billion).
Prior to Yesshop’s launch, Ding told the Otago Daily Times he was inspired by the Korean television shopping landscape.
”Yes Shop will be a game-changer for home TV shopping and the New Zealand market generally. In addition, we want to see more Kiwi exporters realising the opportunities offered by Korean consumers and the distribution channels we can provide.”
He shared an ambition to be the largest importer of Korean goods through the channel.
Brand Developers was contacted for this article but declined to participate.