Home Shopping Programs Encounter Some Static Companies Find It Difficult To Extend Medium’s Reach Past Loyal Customers

From jewelry to dolls, cookbooks, recorded music and NFL merchandise, the products and prices roll across the TV screens day and night at QVC Inc. and other electronic retailers.

The merchandise is constantly changing, but the televised sales pitch is much the same as it was 2-1/2 years ago when Hollywood veteran Barry Diller came to QVC and set Wall Street abuzz with proposed deals and new ideas for ways to shop from home.

And that’s a problem to some industry analysts, who say electronic retailing has leveled off at combined sales of about $3 billion last year for the biggest players: QVC, Home Shopping Network Inc. and ValueVision International Inc. Although future expectations remain high - especially as interactive shopping becomes easier - much of the sector is expected to struggle or hold steady in the near term.

“The gold mine that was being talked about two years ago wasn’t in the TV shopping business that exists today,” said Craig Bibb, an analyst with PaineWebber Inc. in New York. “It was from the interactive business on the information superhighway. (But) the information superhighway doesn’t exist today - as it didn’t exist two years ago.”

Yet the mood is anything but gloomy behind the pie-shaped sets of QVC’s studios near West Chester. A new advertising campaign promotes product and service quality. Entrepreneurs have flocked to QVC’s stops on a national tour to find new products to sell from each state. And an interactive shopping service is ready to go.

“This is going to be a huge industry,” said Douglas S. Briggs, who succeeded Diller as QVC’s president in February. Timing is the only question, he said.

The difficulties of electronic retailing already have deterred such potential rivals as R.H. Macy & Co. Inc., Spiegel Inc. and Fingerhut Inc., which all announced and then shelved plans for their own channels.

Buying by phone from television shows “has reached its limits,” said Joanna Barsh, partner at McKinsey & Co. “It has found its natural audience, people who watch the shows and want to follow the shows and the emcees and who buy jewelry and other impulse items.”

Indeed, the shows had a loyal following of about 20.3 million people, or 10.9 percent of U.S. adults, for existing TV shopping programs during the past year, according to Simmons Market Research in New York.

Selling products in a sequence on television “will always appeal to some people and will continue to grow, but it will never be a dominant segment of retail,” said John F. Link, QVC’s executive vice president for information technology.

So QVC is looking to online services for the future.

“I believe interactive shopping in the home will be a very significant piece of the retail pie in 10 or 15 years,” Link said. “A lot of technology has to go over the hill to make it truly useful to the people who really do the buying in this country. We see it as a very long-term game.”

QVC plans to introduce an interactive service on the Microsoft Network, an online service Microsoft Corp. expects to introduce with its Windows 95 software, pending the outcome of a probe of the network by the U.S. Justice Department’s anti-trust division.

QVC’s service would let a shopper who wants a watch, for example, specify features and price range, then look at several models on a computer screen. The shopper can check the distinction between waterproof and water resistance, read a Consumer Digest review of different makes, subscribe to the magazine, look at more watches and place an order.

HSN, based in St. Petersburg, Fla., also has an interactive service planned for the Microsoft Network and already offers online shopping through other services.

The shopping services are mindful that technology alone won’t be enough to make consumers buy their merchandise. Part of QVC’s new advertising campaign on cable across the country says its employees log enough miles to go “to the moon and back” to find merchandise.

“The fact that we go out and look for great products comes as a surprise to some people,” said Fred Siegel, senior vice president for marketing.

ValueVision, based in Eden Prairie, Minn., recently announced an alliance with Montgomery Ward to offer brandname housewares, electronics and apparel. “We think it’s going to have a tremendous effect on home shoppers,” said Mark Payne, chief financial officer of ValueVision.

HSN recently merged two of its three channels and is making it easier for people to know when to watch for a cooking show or a sports show, “so the customers don’t have to randomly go through the networks,” spokeswoman Louise I. Cleary said.

A dress, hat, shoes, watch and handbag are now pitched together, so a shopper can put an entire outfit together from a single show. “That’s a tactic that we haven’t used before,” Cleary said.

But HSN’s efforts have had some unintended consequences, Bibb said. “They’re turning off a lot of their longtime heavy-consuming customers, who don’t like the new products as much,” he said.

QVC also stumbled with plans to start two new channels - Q2 and onQ - offering a mix of entertainment, family and sports gear, and young, cutting-edge fashions. They have been merged under Q2, which debuted in February and is growing slowly.

“It’s too early” to gauge Q2’s success, Briggs said. “Would I want it to be better? Of course I would. We’re making progress.”