In an article for Inc., Clarus Commerce CEO Tom Caporaso speaks to reporter Emily Canal about the implications of a QVC-HSN merger. Caporaso says that the deal is definitely worthwhile, as the bigger company will look even more attractive to any brand that wants to be involved with either company.
As originally published on www.inc.com.
The ongoing series of big-money mergers is expected to put plenty more pressure on the retail industry. On June 29, Amazon announced that it was buying Whole Foods for $13.7 billion. That same day, Walmart said it was acquiring men’s clothing company Bonobos for $310 million. And on Thursday, Liberty Interactive, the parent company of QVC, announced it would take control of longtime rival Home Shopping Network for $2.6 billion in stock.
These mergers have sparked debates about the fate of retail, but for entrepreneurs selling their products on QVC and HSN, the future looks promising.
Buy, buy, buy
Tom Caporaso is an expert on customer retention and the CEO of Clarus Commerce, a marketing platform for premium loyalty programs. He says that the merger has essentially doubled the volume and velocity of QVC and HSN. “It makes it all the more worthwhile to get in front of these brands because now they are even bigger,” he said.
The deal is also intended to help both QVC and HSN cut costs, gain scale, and boost sluggish sales; HSN’s sales declined by 3 percent in 2016, while QVC’s have slowed, according to The New York Times. (QVC still did $8.7 billion in sales last year and HSN had $3.5 billion in revenue, CNN reported.)
“I thought it might be good news if they do combine, and there isn’t such fierce competition,” said Aaron Krause, the CEO of Scrub Daddy, a line of cleaning sponges. “It would be interesting to be able to sell on both platforms because I think they also have different demographics.”
Call now…and double the offer
Krause has been selling his products on QVC for several years. Sales were so successful that he was able to expand the line to include items like magic eraser sponges and cleaning wands. Krause said that prior to the deal, entrepreneurs sold their products with one company or the other–never both. He believes that the merger could open more channels for QVC. Once combined, the two would serve about 23 million customers worldwide and ship more than 320 million packages every year, according to the Associated Press.
Wesley LaPorte, the CEO of PhoneSoap, a company that makes cleaning products for smartphones, agrees. He’s been selling his products on QVC for three years. “I think it will allow us to expand the people we are able to reach,” said LaPorte, adding that he’s excited to get his tech products in front of HSN’s audience because they tend to be younger than QVC viewers.
It remains unclear whether Krause’s and LaPorte’s hopes to sell on both platforms will be an option once the merger closes in the fourth quarter of this year. Both QVC and HSN will remain stand-alone brands under the new QVC Group structure, according to The New York Times. Caporaso added that while the merger could be very beneficial to some, it could also mean entrepreneurs who are turned down from one company may face difficulty working with the other.
The deal allows Liberty Interactive to buy the remaining 62 percent of HSN that it does not already own. What’s more, the merger combines QVC, HSN and Zulily, the flash sale site Liberty Interactive bought for $2.4 billion in 2015.