HSN marks 25th year by rewriting rules of shopping

ST. PETERSBURG, Fla. -- Bobbi Ray Carter is at the top of her selling game, describing in loving detail an elegant beige jacket with a ruffled collar.

She has been going at it on live television for three hours, with nothing more to guide her than some talking points, a knowledge of her audience and some abiding principles: be trendy, be youthful and wear something fabulous.

The shoppers are eating it up from the glamorous Bobbi Ray, who at 50 is flawless, polished and wearing a sparkly double-strand bracelet of cubic zirconium.

It's all part of the landscape at HSN -- known more colloquially as the Home Shopping Network -- a company that started 25 years ago this month when a broke advertiser gave a local radio show 112 electric can openers to sell on the air.

The can openers sold so well that the concept of home shopping was born, evolving into a live-action tribute to the needs and desires of mostly middle-age, middle-class women everywhere.

The network has evolved into a high-powered blend of show business and commerce that raked in nearly $2 billion in sales last year. While other retailers have suffered recently, HSN has thrived.

Success has been built by embracing the people who control the family purse strings, and by offering them a place to play dress up without a sneering salesgirl in sight.

"We are in their homes every day," said Carter, who started at HSN 20 years ago and has developed a loyal following of viewers who have stuck with her through new hairstyles, marriages, divorces and childbirth. "They start shopping with you and they feel they really know you. It's like you're a friend."

On the charts

Its trademark fake jewel, Absolute CZ, accounts for only 2 percent of its sales. Today, the network that's now owned by Barry Diller's USA Interactive offers everything from cookware and home paints to diet foods and sports memorabilia.

The networks sales records are staggering.

HSN once sold $1.5 million worth of $900 mattress sets in one day. A guitarist named Esteban once sold $1 million worth of his recordings in four hours, charting on the Billboard 100 based on his HSN sales alone.

The network's top customer is a woman in New York who last year ordered $160,000 in merchandise.

Actress Suzanne Somers drew 2,000 women on a Bahamas cruise last year that was sold on HSN and billed as the world's largest floating pajama party. It was broadcast live from sea.

"There's a comfort zone here," said HSN president and CEO Mark Bozek. "It's an old quote, but people can buy underwear in their underwear."

Bozek is a former Fox entertainment news producer who 13 years ago proposed to his wife with a cubic zirconium ring. Since becoming head of HSN in 1999, Bozek says he has "substantially" upgraded the ring. He's also seen the network through its debut on the Internet and its expansion overseas.

The television network reaches 143 million homes worldwide. It employs 4,400 people and is based on a 53-acre campus in St. Petersburg.

'We embrace the middle'

Bozek, who early in his career was an assistant to famed acting guru Lee Strasberg, sees HSN as television built on impulse and spontaneity, with such abiding customer loyalty that during the Sept. 11 attacks, thousands of HSN customers logged on to chat rooms at the online shopping site to comfort each other.

"We have zero desire to be an upscale shopping channel because up there, there are less people," Bozek said. "We embrace the middle and we love it."

It is not a business without its challenges. While department stores struggle to maximize dollars per square foot, HSN's focuses on dollars per minute.

There have been some duds, Bozek said, including the "upside down" dress and the three-legged pantyhose, which offered a handy spare if one leg got a run.

Two years ago, the Federal Trade Commission slapped HSN with a $1.1 million fine for making unsubstantiated claims on diet, skin-care and menopause relief products from 1996 to 1998. The incident was in violation of a 1996 FTC order that the station not make claims it could not document.

Bozek said the company now teaches hosts not to get carried away in their in their pitches. HSN also tests every product for safety and wear in its quality assurance department. Natural gems are also sampled for authenticity.

Few have witnessed the transformation of home shopping in the same way as Somers, the sitcom actress who has remade herself through HSN as a mogul of exercise equipment, diet products and jewelry.

She reluctantly joined HSN in 10 years ago on the advice of her husband and business manager, Alan Hamel. On her first trip to St. Petersburg, Somers was not impressed.

"It's in the middle of all the operators, with the world's worst lighting," she recalled. "There was no style, no pizzaz. It was yell and sell.

"It was the kind of place where you kind of tuned in to get bargains and they were selling a lot of crap, including the jewelry."

As Somers settled in, the sets got flashier and the jewelry got nicer as she started taking a hand in its design.

Oddly, it's not small-town America that sustains HSN, but the nation's own shopping hotbeds. New York, Los Angeles, Chicago, Philadelphia and San Francisco are its top five markets.

"There is this perception we sell exclusively to blue-haired ladies living in trailer parks buying cubic zirconium," said Paul Guyardo, executive vice president of marketing. "That is a portion and we are happy to have them, but it's not everything."

The demographics of HSN break down this way: 75 percent female, 40 and older with an average income of $63,000.