Not Playing Around
Mindy Grossman has a passion for product, people and lifestyle retailing tenets that far exceeds her petite frame — even in four-inch heels.
T he CEO of HSN oversees a $3 billion retail portfolio encompassing HSN, a leading interactive multi-channel retailer, and Cornerstone, a dynamic multi-channel retailer of lifestyle brands including Frontgate, Garnet Hill and the newly acquired Chasing Fireflies.
The transformation of HSN into a lifestyle network began when Grossman joined the company in 2006. She championed the diversification of the company’s portfolio of brands and personalities, spearheading the evolution of the network into a multi-platform business. In 2008 she was influential in taking the company public, and in 2010 she oversaw the launch of a second 24-hour TV shopping channel, HSN2.
In the first quarter of 2012, flagship unit HSN saw net sales increase 3 percent to $541.9 million, including 8 percent year-over-year growth in digital sales. Grossman is well on the way toward her goal of turning HSN into a more experiential milieu — the HSN Arcade launched a little over a year ago and has received more than 50 million game plays.
Before HSN, Grossman, a 34-year veteran of the retail and apparel industries, spent seven years at Nike, overseeing its apparel business. Prior to that she held various roles with Polo Ralph Lauren and Tommy Hilfiger.
STORES Editor Susan Reda recently spoke with Grossman.
Financial reports indicate HSN is performing well. What’s driving the business?
We’ve been performing consistently and our success is linked to a number of different things. First, we have had a maniacal focus on digital expansion. When I say digital, I’m referring to all of our screens — from television to e-commerce, mobile or tablet. The pace of growth in mobile is beyond anything we’ve seen in terms of consumer adoption; in the first quarter [of 2012] we did 50 percent of the mobile sales that we did in all of 2011. The investment we’ve made in innovation and in personalizing and customizing experiences across our screens has been very important to the success of our business.
In today’s world it’s about creating inspired experiences — whether that experience is giving the customer ideas and information or giving them entertainment that’s attached to great products. We’re big believers in the intersection of content, community and commerce, and really bringing the story to life in an engaged way to get the consumer to want to react.
Lastly, we believe that in today’s environment it’s about having a very flexible, adaptable culture that’s able to embrace change and move in tandem with how the consumer’s moving.
How important is story-telling to creating the HSN experience?
I am a passionate believer in proper story-telling, and I think that it creates a very different dynamic with consumers when they understand what’s behind the products and behind the brand. It creates engagement.
Today, if a brand’s only vehicle is lowest price, you will never have a differentiated platform; you have to bring something else to the conversation. We work very hard to have differentiated products. Over 75 percent of the products for sale are proprietary. Our goal is to create a concept of discovery and storytelling around those products.
As a consumer, I’m often curious to learn the story behind a product. I think that approach resonates with people today because there’s so much noise out there and so many choices.
Consumer confidence levels have slipped. What’s your take on the shopper mindset?
We’re concerned about how the consumer is feeling, but having said that, our job is to control what we can control. For example, if the consumer is going to spend, how can we give her the confidence that we are a trusted advisor and ... that the products she’s getting from us are a good value? And when I say value, I’m not talking about the lowest price.
We use the phrase “premium-ization” — meaning that if she’s going to shop with us, we need to be sure the product is going to exceed her expectations. The value is not just inherent in the price — it’s in the product, the experience and the trust factor. We have to put ourselves in the consumer’s shoes — looking at it from the consumer vantage point and working backwards.
How are you feeling about the upcoming holiday season?
I’m cautiously optimistic going into the season for a couple of reasons. On the HSN side we’re making changes across all our digital platforms that will help meld together the concept of content, community and commerce in a more immersive way.
Also, the upcoming holiday season is unquestionably going to be the season of mobile, and we’re committed to using our screens to reach the customer and give her an experience in a very different way.
Finally, we’ve worked hard with our partners to compile what we think is a very compelling assortment of merchandise, including significant expansion in some products that we plan to highlight with our live show experience.
What types of products are shoppers looking for?
People are looking for products that are unique and special. They’re looking for items that provide a benefit to them – “How is it going to save me time or money?”
It’s going to vary depending on the product category. Still, it’s important to keep in mind that people are not spending with abandon; if they are going to spend, they want something that’s going to be meaningful.
You’re obviously committed to supporting the business with technology. Are future investments planned?
There’s no question that we’ll continue to explore investments in technology. The challenge is to make strategic investments for the future while managing the business today. Determining initiatives can be difficult decisions to make, especially when you have to redeploy resources or shift focus. Still, it’s critical to get the whole organization culturally galvanized around change that represents the future of your business.
Having said that, you also have to be realistic about where you are — and how quickly you can affect change. If people are still contemplating their mobile strategy today, they’re just falling further and further behind because the pace of change is dramatic. What’s happening today is geometric change: You have to pay attention to that and realize the importance of thinking about investments as they relate to the customer experience.
HSN just marked the one-year anniversary of the HSN Arcade. What was the genesis of this and how has it enhanced the brand?
I’m a little obsessed with the concept of “gamification,” but it actually began a few years ago when we were doing deep insight work into the various areas of media and entertainment and where the consumer was engaging. We were trying to understand what our consumer was passionate about and what she was doing, in addition to shopping with us. We knew she loved shopping, sharing, Facebook and community, [and] the research also identified that she was playing casual and social games.
And, interestingly, the psychology of why she was doing that lined up in terms of what we knew about our customer and why she likes to shop. She likes it — in part — for entertainment, and also for the idea of, “I’ve accomplished something. I’ve gotten to the next stage.” We began asking, “Why shouldn’t she be able do all of that with us?”
We launched Arcade with 25 games — many of them re-skinned to incorporate HSN personalities and products. One of my favorites is a 100-piece jigsaw puzzle that is launched every day at midnight and features our best item of the day. The person who finishes the puzzle first wins the product. What’s interesting is that we have as many people play when it’s a $39 product as when it’s a $1,500 item.
When we launched a year ago, we set our sights on at least 5 million game plays by the end of the year and an increase in engagement and session length. We had almost 30 million game plays by the end of the year, and we’ve had a quarter of a million registered users win badges and points. We’ve also noticed a huge increase in time spent on the site and we’ve seen a positive impact on same-session sales.
You’re among a growing cadre of retailers committed to ensuring retailers’ voices are heard on Capitol Hill. I understand NRF’s Retail Means Jobs campaign struck a chord with you.
NRF has really worked to get our industry’s voice heard at an elevated level, in terms of influence. Retail is one out of four jobs in the U.S., and I think there’s been a misnomer that those jobs aren’t valuable. They’re very valuable. Retail is the American dream and I’m certainly an example of that.
Beyond that, there’s the positive impact that retail has on the economy, spending and employment. We’ve taken the first steps and now we need to continue to amplify the conversation.
As a working mom with a time-consuming career, what advice do you have for those who struggle with work/life balance?
One thing that I have learned is … there’s no such thing as perfect. As women we have to remember how to breathe and remind ourselves that we can’t have everything at the same time. The biggest thing is … it’s not about feeling guilty. It’s not about trying to be perfect. It’s about doing the best we can and making different decisions at different points in our lives.
For me it’s always been assessing what level of risk I want to take, what level of disruption I want for my family and what level of time I am able to give to various things.
There are times when I think, “I’ve got this balance thing.” And then two days later I find myself in a tailspin. I often go back to my guiding principle: If I really believe I’m doing the right thing for my family and I’m doing it with the right intention, that’s the best I can do.