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CUSTOMERS NEED ACCESS AND SERVICE ON THEIR OWN TERMS, SAYS MINDY GROSSMAN

- Mindy Grossman describes how consumers are changing their shopping behaviour -

Mindy Grossman, CEO, HSN, Inc (HSNi) believes that retailers can no longer focus on getting the customer to come to them.  Customers need access and service on their own terms.

Grossman, who is set to address the Congress delegation in Berlin this April, views the current environment as an opportunity for HSNi to gain share.  Read the full interview below:

What do you see as your immediate business priorities in this current economic climate?

HSN has a unique and differentiated business model that allows the 24/7 network to identify shifts in consumer behavior.  We measure our business by the minute and can shift in real time to both maximize and mitigate based on trends.  In 2009, our ability to see these shifts allowed us to make critical changes to assortments, programming and marketing -- and that will continue to be a key priority in 2010.

Another immediate business priority for HSN is to own the future of transactional innovation across multiple platforms using content to create communities and to drive commerce.  We have already made significant strides and have been at the forefront of innovation:  we are the only retailer that streams live video on three screens:  TV, Internet (with over 12,000 videos on HSN.com's product pages) and mobile (via our iphone shopping application).  We have also had great success in enabling our customers to shop with HSN by using their remote control through our "Shop by Remote" technology, currently available in more than 25 million homes in the U.S., and now they even have the ability to shop with us in-flight.  We will continue to offer our customers with innovative ways to access our brands and products whenever and however they want to shop.

How do you view the prospects for 2010?‪

We view the current environment as an opportunity for HSNi to gain share.The convergence of content, community and commerce is happening in real time, and we are uniquely positioned to be able to leverage our networks to bring great products, great stories and great storytellers to life to an engaged community of customers whenever, wherever and however they choose.  We will continue to create value by exerting strict financial discipline while at the same time strategically investing for growth.

In what way do you see consumers changing their shopper behaviour?

There has been a shift in the consumer's psychology of acquisition.  The wild days of abundance and status for status' sake are no longer relevant.  Customers are more discerning in both their product choices and with whom they choose to have a relationship.

We went through a period where functional trumped emotional as consumers redefined the difference between a "self" and a "selfish" purchasee.  Value has also been redefined, and consumers expect more from both the product and the experience.  Since our model has always been about price value, customers trust that what they are buying will meet or exceed their expectations.

Now, customers are re-engaging with more discerning purchases, such as jewelry, apparel and accessories, but the product has to be unique, special and do something for customers emotionally.  "Special" has become the new status.  Our product assortments in these discerning categories are over 90% proprietary to HSN and that creates a competitive advantage as we can offer a broad selection from both existing and new designers and brands that customers cannot find anywhere else.  As many traditional retailers pared back assortments and service, we were able to provide a personal shopping service that was brought to life on TV, online and mobile, giving our customers instant access 24 hours a day.

How should retailers respond to those changes?
Retailers can no longer focus on getting the customer to come to them.  Customers need access and service on their own terms -- and locking them into a specific place and/or time is not realistic.  To truly be differentiated, a brand proposition has to be decoupled from just a price and/or discount comparison.  The focus has to be on creating a compelling and distinctive product experience, while at the same time maintaining a great price value in the customer’s mind.

Customers, particularly women, want their needs and lifestyle challenges to be understood and respected.  They want respectful, intelligent and authentic communication.  Helping them make the right choices, becoming a trusted advisor, and, in essence, an advocate for the consumer creates a completely different dynamic and bond with one's brand.  Today, customers are much more discerning and expect more. HSN has been pursuing a strategy of offering consumers "more" - more unique and exclusive products, consistent price value, and more accessibility over multiple platforms from TV and Internet to mobile and in-flight.

On the technology front, being able to use content to leverage online broadband adoption, interactive television, Video on Demand, social networking and mobile platforms to give the

customers access to commerce on their own terms is critical.  However, it needs to be intuitive and relevant.

What will characterise a winning retailer in the future?
Retailers who focus on and really know their customer, effectively manage inventory and working capital, provide quality and strong price value, and create a differentiated product and shopping experience will be best positioned.  It is becoming increasingly important to provide interactive services and to continue to offer more robust and unique e-commerce options as those will be a main driver in the future of retail.  Technological advancements and new ways to shop will give retailers that competitive edge.

Over the past few years, we have evolved HSN from a linear television shopping channel to a network of experiences – delivering a multichannel strategy of what we call “lifestyle, editorial, programmed commerce.”  HSN provides a shopping experience and content that is consistent and available 24 hours a day on multiple platforms.  This access, and our ability to leverage our content as a vehicle for commerce, is a competitive advantage for us.

Where will growth come from in the short to medium term?
Growth will come from gaining share of market and share of wallet, engendering loyalty and trust with your consumer, leveraging innovation and creative collaborations to create new platforms for expansion, and creating long-term sustainable value for one's brand and business.

What is your favourite shop and why?

I must admit that I purchase over 80% of what I buy online.  I feel that I can experience a greater breadth of assortment and information on the brands and products that I know or become introduced to on the web.  The ability to weave editorial content into a site, get community and customer feedback and a more personalized experience is of great benefit.  Favorites of mine are Net-a-Porter and J. Crew for fashion, Williams Sonoma for cooking, Frontgate for home and outdoor, 1st Dibs for antiques and hard-to-find objects, and, of course, HSN for almost everything!!

Which retailer - company or individual - do you admire the most and why?

I admire brands and individuals who have been able to remain relevant by continuing to evolve and reinvent themselves or those that have changed the landscape through their products and experiences.  I don't necessarily think of a store per se that I admire most, but of individuals who have had an indelible mark on the consumer landscape.  Steve Jobs at

Apple, Ralph Lauren, Phil Knight and Nike, Mickey Drexler, Stefani Greenfield, Miuccia Prada, Giorgio Armani and Karl Lagerfeld are ones that are top of mind.

Launched in 2007, the World Retail Congress is one of the most important and high profile gatherings of the retail industry across all sectors.  With senior retailers from across the world represented in both the speaker programme and delegation, the Congress has become a powerful meeting place for the industry.

The next World Retail Congress will take place in Berlin from 21 to 23 April and has at its heart a three day agenda of plenary sessions, business streams and networking events.  In 2009, the event was attended by over 1000 people with more than 100 speakers representing some of the biggest and most important names in retailing around the world.

For further information, please contact Financial Dynamics:
Victoria Wallin, + 44 (0)20 7269 9360
Emma Hammond +44 (0)20 7269 9347
Tanya Bolton, +44 (0)20 7269 7296
Or email wrcenquiries@fd.com

Notes to Editors:

WORLD RETAIL CONGRESS 
Created in direct response to the demands of retailers, and supported by major international players including Tesco, Carrefour, Ikea, Alshaya, and Best Buy, the World Retail Congress will once again bring together the world’s retail leaders for high-level debate with international policy makers.

The aim is to drive growth in the global retail economy, promote the benefits of global retail excellence and gain sustainable, competitive edge in domestic and international markets. With thousands of key retail professionals and politicians expected to attend, the focus will be on discussing and influencing the issues for change.  Further details are available online at www.worldretailcongress.com or by emailing info@worldretailcongress.com.

MINDY GROSSMAN, CHIEF EXECUTIVE OFFICER, HSN INC

A 32-year veteran of the retail and apparel industries, Mindy Grossman is Chief Executive Officer of HSN, Inc. (HSNi, formerly IAC Retailing) and a member of the Company’s Board of Directors.  In this capacity Ms. Grossman oversees a $2.8 billion dollar retail portfolio which includes: HSN, a leading interactive lifestyle network and retail destination that offers a curated assortment of exclusive products combined with top brand names; HSN.com, a top 10 trafficked e-commerce site that offers a differentiated e-commerce experience by leveraging content, community and commerce; and Cornerstone Brands, a dynamic, multi-channel retailer of lifestyle brands including Ballard Designs, Frontgate, Garnet Hill, Grandin Road, Improvements, Smith+Noble, Territory Ahead and Travelsmith.  Prior to taking the company public, Ms. Grossman had been Chief Executive Officer of IAC Retailing since May 2006.

Ms. Grossman joined IAC from Nike, Inc. where she served as Global Vice-President and head of Nike’s $4 billion apparel business from 2000 to 2006.  In addition, she was responsible for the development and growth of Nike’s global women’s business and served as Co-chair of their Women’s Leadership Council.

Prior to Nike, Ms. Grossman served as President and CEO of Polo Jeans Company from 1995 to 2000.  She was Vice-President of New Business Development at Polo Ralph Lauren Corporation from 1994 to 1995 and President of Chaps Ralph Lauren and Senior Vice-President of Menswear for Warnaco, Inc. from 1991 to 1994.  She has also held senior positions at Tommy Hilfiger and Oxford Industries and began her career in 1977 in the menswear industry.

In 2009 Ms. Grossman was ranked one of the world’s 100 most powerful women by Forbes magazine and serves on the Board of Directors of the National Retail Federation, as well as the East Harlem School at Exodus House in New York.  She is the Chairperson of the Fashion Institute of Technology’s Executive Women in Fashion Advisory Board, and is also a member of the Advisory Board of the J. Baker School of Retail at the Wharton School of Business.