“Home
shopping,” also known as “televending,” “electronic merchandising” or
“video shopping,” is the latest in direct marketing. There are many
television shows on the air that present products that consumers can
order over the telephone. Some of the shows even air twenty-four hours,
making for what the companies might call “ultimate convenience.” Most of the shows have similar formats. A show host
presents a particular item, gives the claimed regular or “retail” price
followed by the lower price at which the show offers the product.
Consumers place their orders via a toll-free phone number, giving
either their credit card number or the promise of a check. Companies
generally hold products for one week contingent upon the arrival of a
check. Orders are automatically canceled if the company does not
receive the check.
There is, however, more than a cold sales pitch coming
through the TV screen. Aside from the purchasing that goes on, viewers
can play trivia games, chat with the hosts on the air, participate in
ticket drawings, “shopping sprees” and watch celebrities enumerate the
qualities of a product. Hosts draw audiences into the programs, making
them active, rather than passive viewers.
Products
The products offered on these programs vary tremendously. Some sell
food, and others sell anything from computers to rowing machines to
tanning machines to clothing.
Name brand goods are often featured. Some items are discontinued
models, meaning a manufacturer has ceased production of the item to
produce a newer version. Programs may have an “exclusive line” of
merchandise.
One company will even start selling financial services such as mutual
fund accounts and insurance. There is no limit to what the companies
sell. Some prefer to sell more name brand merchandise than close-outs,
believing that consumers prefer recognizable over unknown brand names.
Companies have also considered the idea of targeting specific audiences
during a particular time slot; an hour of electronic equipment followed
by an hour of camping gear, for instance. Companies have even reached
agreements with large, established retailers to sell their products via
the television screen. But, whatever is sold, it is up to the consumer
to decide if the ease of home shopping makes it worth buying something
he/she cannot carefully scrutinize prior to purchase.
Each company is trying to develop a characteristic that will separate
it from the competitors and ensure the customer satisfaction and
confidence. The shows also want to be entertaining in order to get the
customer to keep turning them on. The promotion of name brand products
may lead to more selective, targeted purchasing and move the industry
away from simple impulse buying.
Order Fulfillment
Telephone operators type orders into a large computer system, which
sends the orders directly to a warehouse, also called the fulfillment
center. The large home shopping companies maintain their own staff of
telephone operators and own their own fulfillment centers. According to
some home shopping services, the fulfillment of orders is the most
important aspect of their business.
The services sell thousands of items a day. At that kind of volume,
managing the processing of data and shipment of orders must be a
priority. It needs to be efficiently run so that customers can get
their merchandise as soon as possible. People have called and ordered a
product in a matter of a few seconds. They do not then want to have to
wait more than a few days to receive the parcel.
Customer Experience
Better Business Bureaus have received complaints against shopping
services generally alleging low quality merchandise, inability to
locate manufacturers for repairs and slow refunds.
Many shopping services have exchange or refund policies. Most allow
consumers to return any merchandise within 30 days for a refund or an
exchange. One company has even initiated a policy of enclosing a return
shipping label and form with every purchase mailed out to consumers. It
is important to verify a company’s return or exchange policy before you
buy.
Pricing Policy
Home shopping programs generally use comparative pricing as a way to
show how much money consumers save by using the service. They usually
broadcast a “retail” or regular price followed by their actual selling
price. The BBB has found that the amount of savings claimed may not
always be a true reflection of the marketplace.
The BBB concluded that while bargains may sometimes be available on
these shows, claimed savings are frequently exaggerated. Also
troublesome is the practice of using comparative prices on “exclusive”
merchandise offered only through the shopping service with no true
marketplace counterpart.
Tips for Consumers
- Since
home shopping companies, like mail order companies, are national, they
may sell products to consumers who live in an area where the product’s
manufacturer does not distribute that particular item. In this case,
consumers may encounter difficulty getting parts and service on a local
level.
- The
price quoted for a product does not include the shipping and handling
charge, which will be added onto the bill. Should you return the
merchandise, you may pay shipping costs twice. Ask the company what
kind of policy it offers for reimbursement of shipping charges for
returned items.
- For
extra protection, use your credit card instead of a check or cash when
making a purchase. If there is a problem with the merchandise, contact
your credit card issuer immediately. You generally have 30 to 60 days
to dispute a charge with the issuer.
Infomercials
This form of advertising consists of half hour to hour-long commercials
aimed at trying to sell you a particular product. Many of these shows
disguise themselves as actual television talk shows or consumer news
programs, making it difficult to discern between real television
programs and paid programming. The products sold on these shows run the
gamut from fitness products, which have proven to be extremely popular,
to cooking devices, and even beauty products. In order to draw
attention to their product, advertisers often use celebrities and
so-called “experts” to promote what they claim to be a “revolutionary”
product. Many also use testimonials from ordinary looking consumers to
prove how well their product works. Viewers, however, should keep in
mind that these people are often being paid to promote these products.
Although infomercials might look similar to television programs, it is
important to realize that they are simply commercials with a different
format.
Consumers should be aware of the following when viewing infomercials:
-
Most infomercials are very similar in content. They usually begin by
discussing common annoyances such as household chores or losing weight
and later attempt to solve the problem by introducing their product
during commercial breaks.
- Be skeptical of claims that seem exaggerated or too good to be true.
- Ask
for all claims that the company makes in writing. This will make it
easier to dispute the effectiveness of a product if you are later
unsatisfied with it.
- Be wary of high-pressure sales
tactics. Take time to think about whether you can find the same product
at a lower price somewhere else.
- Check out the company with your local Better Business Bureau.
