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HSN, Inc. (HSNI), The Coca-Cola Company (KO): This Retailer Is Looking Good Beyond TV

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HSN, Inc.Can a mature retailer remain nimble and relevant to its market and hence stay as an investor’s darling? It certainly can, as HSN, Inc. (NASDAQ:HSNI) has shown in the 28 years since its establishment. After its debut in St. Petersburg, FL, in 1985 as a broadcaster of TV home shopping programming, this company has successfully reinvented itself as a multichannel retailer. It did this by adopting the very same e-commerce technologies which emerged as a threat to its original business model.

The company now prides itself as being the only retailer with live streaming video that consumers can access via three media platforms: TV, online, and mobile. HSN, Inc. (NASDAQ:HSNI) also has brick-and-mortar stores in Florida, something that is critical for old-school consumers who need reassurance that they’re dealing with warm bodies; this is something that purely e-commerce market players are sorely lacking.

At the same time, purposive marketing efforts have been undertaken to make over the company’s image and draw in new and younger consumers. In this rebranding campaign, HSN, Inc. (NASDAQ:HSNI) is shedding its dated image and distancing itself from the celebrity has-beens who served as endorsers in previous years. Covering not only TV but also online and mobile, this facelift will focus on the company as the “product hero” and will entice consumers with the thematic blurb “It’s Fun Here.”

More personalized selling

For this year, the company is increasing its previous $7.5 million media spending budget to focus on digital initiatives including search and display ads. This emphasis on digital and mobile media comes on strong for HSN, Inc. (NASDAQ:HSNI), bringing in about 40% of the company’s sales and 50% of its new customers. Among the notable features of these digital assets is HSN’s Arcade where customers can compete for prizes and flaunt their online game ratings. This feature, which is tied to the social medial Google+ Hangouts, has doubled the length of time that consumers stay on the HSN, Inc. (NASDAQ:HSNI) website and boosted the amount they spent as well.

Besides hiring new designers and hosts, the company also assembled an executive think-tank with more female management members. HSN thus has continued to excite its customers with more creative packaging, thank-you notes, and such “icings” as “Look what you got!” on their product purchases.

Zipping with Coke

A partnership it entered with The Coca-Cola Company (NYSE:KO) last December provided an added source of strength for HSN. The partnership created the world’s most extensive online collection of The Coca-Cola Company (NYSE:KO) merchandise and premium items including sporting goods, home décor, and kitchenware. It also allows The Coca-Cola Company (NYSE:KO) to harness HSN, Inc. (NASDAQ:HSNI)’s platforms to add more zip to its merchandising and marketing initiatives.

The multichannel retailer’s estimated reach of close to 100 million households should give The Coca-Cola Company (NYSE:KO) a significant boost, especially in developed markets where the room for growth has become smaller. This is important as there is a greater need to generate continuing excitement among consumers.

This situation is evident in Coke’s results for the second quarter of 2013. Volume in the company’s North America market slipped 1%, though The Coca-Cola Company (NYSE:KO) International posted a 2% gain. During the quarter, The Coca-Cola Company (NYSE:KO) had earnings of $2.68 billion, or $0.59 per share, compared with $2.79 billion, or $0.61 per share, a year earlier.

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