In a Retail Times exclusive, Mike Hancox, chief executive of TV shopping channel, Ideal World, reveals why the sales channel has proved resilient during the economic downturn and future growth opportunities
As chief executive of the UK’s third largest TV shopping channel, Ideal World, Mike Hancox says the channel is a powerful conduit for sales of innovative household products; while its craft show, dubbed Blue Peter* for adults, features the fastest growing product category.
“We work off a format with great deals and great value on products but only for a limited amount of time,” he says. “We are very good at explaining the features and benefits. Take carpet cleaners – when you see it on TV and we are cracking eggs on the floor, pouring on coke and spilling green paint, you can see how powerful the product is and then you want one.
“And we are the only live crafting channel in the world and the biggest supplier of paper craft. We inspire and show the finished product, then demonstrate and sell the items – it’s watch and make.”
Established 11 years ago, Ideal World operates four home shopping channels: two live and two pre-recorded shows.
The two live shows are broadcast for a total of 29 hours a day. The larger 17-hour Ideal World channel focuses on general merchandise including home and kitchen products, leisure and fitness, outdoor living plus fashion and beauty.
The 12-hour Create and Craft TV channel is a dedicated crafting channel focused largely on paper craft and card making plus children’s craft work, needlework, knitting, art and pottery craft.
Both are broadcast across a range of platforms, including Freeview, Sky, Free Sat and the Virgin cable network; as well as direct to websites.
According to Hancox, who joined Ideal World three years ago from a background at catalogue retailers Otto (Grattan, Freemans, Kaleidescope), Shop Direct and Great Universal, the TV shopping market is worth £1.4bn in the UK.
Ideal World is the third largest player, behind QVC and the auction channel, Bid TV, he says.
The market spans four key sectors:
- Live TV, Ideal World and QVC’s home turf, selling general merchandise products and heavily reliant on product demonstrations
- Auction channels, providing a degree of entertainment by operating reverse auctions with constantly falling prices
- Direct response TV, infomercials and pre-recorded shows, which are very dependent on the quality of the product
- Travel TV, programmes featuring the latest travel company offers
Live TV is the largest quadrant and worth around £500m, of which QVC has an approximate 70% share and Ideal World has just under 30%, says Hancox.
Unlike auction channels, live TV is growing, he adds. Ideal World sales are reported to have increased from £80m three years ago to around the £140m mark today.
Growth as been fueled by a mixture of external and internal factors, he says.
Externally, the growth of Freeview, as a platform run in parallel to the digital switchover, has boosted viewing figures.
Previously, households have needed access to Sky or cable to watch Ideal World’s channels. Freeview has opened up the channel’s availability, especially on additional television sets in the home.
“We have attracted people who have previously not known about TV shopping,” says Hancox.
Ideal World’s channel 22 ranking has also picked up channel flickers, he says, and conversion is strong.
“If people watch us, we are very good at getting them to buy. We understand what products work in a TV environment and have focused on making the customer experience a good one,” he says.
Hancox reports the company has changed its call centre provider to improve the service, for example, and has seen significant growth from online orders.
“Up to 50% of all orders are going through the web, therefore we are very competitive on value because everyone price compares before making a purchase. We are on the money for value,” he claims.
The tested format, meanwhile, includes a ‘deal of the day’, launched at 9am each day, and only available for 24 hours.
Hancox describes it as a market-beating offer, comparing favourably against retail rivals Argos, Amazon and John Lewis, for example.
In one recent deal, Ideal World sold a Flip mini-camcorder at £69.99, undercutting competitors by £30.00.
“We shifted a lot of volume in a short space of time,” says Hancox. “Manufacturers also see it as a valuable marketing tool and see pick up in other channels,” he adds.
Other strong sellers have included lap tops and tablets plus innovative cleaning products such as a Karcher window vacuum and Polti steam cleaner – items that need to be taken out of the box and sold.
Audience rapport is crucial and Hancox claims viewers build personal relationships with the presenters, who are skilled sales people, and talk one-on-one to the audience.
Weekly viewing figures are put at 7m, approximately 1m a day, and include households who have the channel on every day plus new viewers.
According to Hancox, 1,000 people a day shop with the channel who have never shopped with it before; and the company receives an average of 10,000 orders per day – equating to 1% of the total audience buying the offer.
The Create and Craft show, channel 36 on Freeview and 671 on Sky, is reported to showcase the fastest growing category, worth almost £40m in sales in 2011.
In addition to the TV show, there is a Craft Club with 70,000 members. Shoppers pay £20.00 to join and receive a quarterly magazine, membership badge and a 10% discount on future purchases.
While the Create and Craft channel has been founded on card making, Hancox is keen to extend the presence of other crafts including art, pottery, jewellery making, knitting and embroidery; build a following and ultimately launch spin-off channels.
“Craft is the perfect home shopping model,” he says. “It’s a hobby, which people buy into regularly, and not many other people are doing it,” he says.
The future will also see Ideal World develop its presence via mobile devices, says Hancox.
The company already has iPhone and Android apps, which allow users to watch live videos, past shows and view offers; and an iPad app is in the pipeline.
Hancox reports the company has enjoyed success with SMS text messaging, using it as a marketing tool to highlight key programmes to its audience based on their past purchasing behaviour.
“We’ve had a really good response rate on that,” says Hancox. “It’s early days on mobile but I’m certain we will be successful.”
*Former Blue Peter presenter, Anthea Turner, is brand ambassador for Create and Craft TV.
Create and Craft TV is available on Sky 671, Freeview 36 and Freesat 813, and online at www.createandcraft.tv
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