While the economy sputters, German retailers are complaining about poor consumer spending. But switch on the TV and the cash registers are ringing at the home shopping channels. Teleshopping is more popular than ever.
Forget crowded stores, shopping from home is more relaxing.
It used to be that a shopping spree started with a trip to the downtown department store. Now more and more Germans are plopping down on the couch and reaching for the remote control for a stroll through the various home shopping channels:
"Ladies and gentlemen, I'm now going to show you what I've been praising all along, the new plastic containers from Lock & Lock. They do what others just promise -- they seal tight, and stay tight. I guarantee it."
Coupling the charm of a door-to-door salesman with the easy access of mail-order, teleshopping channels such as QVC hawk everything from kitchen supplies to clothing and jewelry. Whereas brick-and-mortar retailers complain about dwindling numbers of cash-ready shoppers, the TV-stores are experiencing an unprecedented boom.
Home Shopping Convenience
With its 19 hours of daily airtime, the U.S.-based QVC, for instance, has upped its German sales by 30 percent to nearly €290 million ($344 million) in just a year's time. In the notoriously bad retail year 2003, QVC -- which stands for Quality, Value and Convenience -- turned a profit of €7.3 million, pulling it out of the red for the first time. In 2004, the TV-store plans to increase its growth in Germany by another 30 percent. Those are numbers traditional retailers can only dream of.
Almost like a catalogue page: A teleshopping program.
The booming retail sector has QVC locked in a head-to-head race for market leader with its stiffest competitor Home Shopping Europe (HSE). The German-language television retailer has been broadcasting its offers since 1995 and has long been in the black with an annual net profit in the two digit range. At last count, it was raking in sales close to €350 million.
The two telestores bank on the same sales strategy, luring the viewer in with a running monologue of how great the product is and what a good deal the consumer is getting:
"It's incredible," one presenter recently lured viewers to the phone. "I guarantee, this jacket is a good deal. Call in now for this super offer. You'll save more than €56. The lines are full, but keep trying. We've already received 2,000 orders -- half of our stock has already sold out."
Over a million customers
At QVC, telephone operators recorded about 1.3 million calls from viewers last year, and at HSE 1.5 million customers placed orders. On a daily average some 100,000 Germans purchase products from the teleshopping channels. The vast majority of customers -- 80 percent -- are women between the ages of 39 and 60. And they're primarily interested in splurging on home decoration and jewelry, which account for 46 and 31 percent of all orders, respectively.
With some 34 million households able to receive the home shopping channels, there's still room for growth, at least that's what the latest telestore RTL-Shop hopes. The homeshopping offshoot of the private television network RTL has only been in the business for two years, but it's already surpassed €130 million in sales.The once trivialized shopping channels have found their audience and are striving for a total market volume of two billion euros annually. For the companies backing the shows, the telestores are turning into a money making machine. For the consumers, the home shopping channels offer what they want without leaving the comfort of their own living room -- a customer service few traditional retailers provide.