Retailers Embrace "The New World of Consumer Centricity"
Jay H. Baker Retailing Initiative/Wharton Interactive Media Initiative '10: The chief executive officer of Home Shopping Network details how to engage customers and improve service.
Posted Mar 23, 2010
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NEW YORK — In a delightful sparkly silver shirt and a beige jacket with rolled-up sleeves, Mindy Grossman could have been mistaken for a model on the Home Shopping Network (HSN) rather than the company's chief executive officer. Addressing an industry crowd at an event here today at the flagship Macy's in New York's Herald Square, Grossman personified what the new HSN represents: style and swagger. Under her leadership, HSN's e-commerce site has become a top-10 destination in terms of traffic, and its television channel broadcasts live programming to 94 million homes. During her keynote address at today's Interactive Retailing Conference -- part of the Wharton School of Business's Jay H. Baker Retailing Initiative -- Grossman shared her vision of an era of what she called "boundaryless retail."

Traditionally consumers and retailers came together in a physical location for a given amount of time for the purpose of a sale. Modern technology has changed that, Grossman told the crowd, and this new relationship allows customers to demand what they want, when and where they want it. Companies, she warned, must be able to meet this constant demand.

"The key today is to be both eclectic and accessible," she said, "and provide the consumer with options that work with their lifestyle and give them access to those options on their own terms. That can mean a flat-screen one day, a hanger the next. We need to reset our mindset and embrace the new world of consumer centricity."

The increase in consumer demand isn't the only consequence of new technology. Digital video recording, for example, has long allowed television viewers to skip through advertisements. Emerging social technologies now help information spread farther and faster than ever before, which means that a company's dirty laundry can be posted and shared by customers within seconds.

"Transparency and community is critical in today's world," Grossman said. "Being perceived as a trusted authority is a significant competitive advantage. The most-utilized tool for consumers on the Web just behind search is user-generated product reviews. [Customers are] more discerning. We've moved from a culture of status and abundance to one of more-thoughtful decision-making around the acquisition of products."

Grossman emphasized the importance trust plays in whether a customer will make repeat purchases. She argued value is about more than "the lowest price or the biggest discount," and she reprimanded those businesses that "strip things down and offer less for less." The hope, she added, is "that by being a strategic and creative partner…we can encourage retailers and brands to once again excite the consumer with creativity and connectivity."

A 32-year veteran of the retail world, Grossman previously headed Nike's $4 billion apparel business, and served as president and CEO of Polo Ralph Lauren and president of Chaps Ralph Lauren. In 2009, Forbes magazine named her one of the world's 100 most-powerful women. 

She recalled joining HSN in 2006, and purging brands and products that she felt did not meet the company's standards. HSN, she said, offered subpar customer service and lacked a maniacal focus on quality, and she was upset to discover that 30 percent of customer calls had been outsourced offshore. In the 2007 National Retail Federation/American Express Customer Choice Awards for Excellence, HSN wasn't even rated, she said. Today, the company ranks number seven on that list, and all of its sales and service operations are based in the United States.

"We initiated a very structured process that evaluates customer reviews, return rates, and customer service calls," Grossman said, "and applied an automatic trigger if indicators on a combination of these elements [suggested] a quality issue."

Grossman urged retailers to constantly engage customers as a way to predict those consumers' needs. That effort, she promised, will ultimately make buyers feel empowered. As an example, she recounted how HSN fields some viewers' questions -- taking phone calls and reading emails live on the air -- to maintain a strong connection with customers.

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