Home Shopping - US - April 2005

SUMMARY

The home shopping market and the industry that serves it are changing, and much of the change is a result of the Internet. The Internet has transformed how consumers obtain information, communicate and even conduct business. Once predictable and staid catalog merchandisers now direct customers to their websites site for more timely bargains, much in the same way television shopping channels urge viewers to place orders online.

While three of the home shopping channels covered in this report have experienced modest to healthy growth recently, Internet home shopping has expanded at a current-dollar rate of over 22% a year for the past four years, steadily gaining market share at the expense of mail order/catalog, television home shopping and direct selling. As the U.S. economy continues to mend and retail activity continues to strengthen, all four home shopping channels stand to benefit from increased consumer activity.

The term "home shopping" is usually associated exclusively with television shopping, as in the Home Shopping Network. For purposes of this Mintel report, however, home shoppings definition has a much broader scope, and includes the four primary methods of shopping that allow one to obtain goods and services without leaving home to visit a retail store or other physical outlet. Those channels include the following:

TABLE OF CONTENTS

Introduction and Abbreviations

Introduction

Definition

Other relevant reports

Abbreviations & terms

Abbreviations

Terms

Executive Summary

Favorable economic and demographic fundamentals

Uneven growth among home shopping channels

An industry in transition

The changing profile of the home shopper

Whither the home shopping industry?

Market Drivers

Demographics

The impact of age

• Figure 1: U.S. population, by generation, 2005
• Figure 2: U.S. population projections, by age, 2000-10
• Figure 3: Graph U.S. population, by age, 2000-10
• Figure 4: Home shopping activity, by age, January-September 2004
• Figure 5: Graph Home shopping activity, by age, January-September 2004

Household income

• Figure 6: Home shopping activity, by household income, January-September 2004
• Figure 7: Household income distribution, by age of householder, 2003

Gender

Race/ethnicity

• Figure 8: Estimated U.S. population, by race and Hispanic origin, 2000-10
• Figure 9: Home shopping activity, by race/ethnicity, January-September 2004
• Figure 10: Graph Home shopping activity, by race/ethnicity, January-September 2004

Economic conditions, consumer sentiment

• Figure 11: U.S. retail sector performance index, February 2004-February 2005
• Figure 12: Graph U.S. retail sector performance Index, February 2004-February 2005
• Figure 13: Index of consumer sentiment, 2000-05

Broadband penetration drives sales

• Figure 14: U.S. broadband household projections, 2000-10

Reasons for not shopping from home

• Figure 15: Reasons for not distant shopping for clothes, July 2004

Market Size and Trends

• Figure 16: Total retail sales and total home shopping sales, 1999-2004
• Figure 17: Total U.S. retail home shopping sales, at current and constant prices, 1999-2004
• Figure 18: Graph Total U.S. retail home shopping sales, at current and constant prices, 1999-2004

Market Segmentation

Introduction

• Figure 19: Sales through home shopping channels, by channel, 2002 and 2004
• Figure 20: Graph Sales through home shopping channels, by channel, 2002 and 2004
• Figure 21: Home shopping sales as percent of total retail home shopping sales, by channel, 2000-04

Television

• Figure 22: Sales through television, at current and constant prices, 1999-2004

Mail order/catalog shopping

• Figure 23: Retail sales through mail order/catalogs, at current and constant prices, 1999-2004
• Figure 24: Catalog purchases, by category, by gender, 2002

Internet

• Figure 25: Estimated retail e-commerce sales, at current and constant prices, 2000-04
• Figure 26: Estimated retail e-commerce sales, quarterly and as a percent of total retail sales (excluding food), 1999-2004
• Figure 27: Online retail purchases, by category, by gender, 2003

Direct selling

• Figure 28: Sales through direct selling, at current and constant prices, 1999-2004
• Figure 29: Direct selling as a percent of total retail home shopping, 1999-2004
• Figure 30: Direct selling purchases, by category, 2003

Retailer Profiles

Introduction

Television home shopping companies

QVC, Inc.

Home Shopping Network (HSN)

ShopNBC

Shop At Home Network, LLC

Direct selling companies

Amway

Avon Products, Inc.

Tupperware

Mary Kay, Inc.

Shaklee Corporation

Catalog companies

JC Penney Company, Inc.

Redcats USA

L.L. Bean

Limited Brands, Inc. (Victorias Secret)

Internet home shopping companies

Amazon.com, Inc.

Froogle.com

eBay Inc.

Advertising and Promotion

Introduction

Mail order

Direct selling

Television shopping

Internet shopping

The Consumer

Introduction

Home shopping demographics and usage

• Figure 31: Home shopping activity, by gender, January-September 2004
• Figure 32: Home shopping activity, by age, January-September 2004
• Figure 33: Home shopping activity, by household income, January-September 2004
• Figure 34: Home shopping activity, by race/ethnicity, January-September 2004

Catalog purchase frequency and amount spent

• Figure 35: Frequency of catalog usage, January-September 2004
• Figure 36: Amount spent on catalog shopping, January-September 2004
• Figure 37: Catalogs bought from, by gender, January-September 2004
• Figure 38: Catalogs bought from, by race/Hispanic origin, January-September 2004
• Figure 39: Catalogs bought from, by level of educational attainment, January-September 2004
• Figure 40: Type of merchandise purchased from catalogs, by gender, January-September 2004
• Figure 41: Type of merchandise purchased from catalogs, by race/Hispanic origin, January 2004  September 2004

Mail/phone order

• Figure 42: Items purchased through mail/phone order shopping, by gender, January-September 2004
• Figure 43: Items purchased through mail/phone order shopping, by age, January-September 2004
• Figure 44: Amount spent on mail/phone order shopping, January-September 2004

Internet shopping

• Figure 45: Online activity, January-September 2004
• Figure 46: Items purchased through Internet, January-September 2004
• Figure 47: Items purchased through Internet, by gender, January-September 2004
• Figure 48: Items purchased through Internet, by age, January-September 2004

Attitudes about shopping habits and use of the Internet

• Figure 49: Use of the Internet for shopping, by gender, January-September 2004
• Figure 50: Amount spent on Internet shopping, January-September 2004

Method of payment used for home shopping purchases

• Figure 51: Method of payment for Internet, mail/phone or catalog shopping, January-September 2004

Summary

Attitudes about home shopping

• Figure 52: Attitudes towards home shopping, February 2005
• Figure 53: Attitudes towards home shopping, by household income, February 2005
• Figure 54: What prompted use of the Internet for shopping?, February 2005

Attitudes about direct selling home parties

• Figure 55: Attitudes towards home shopping parties, February 2005
• Figure 56: Attitudes towards home shopping parties, by household income, February 2005

Summary

Future & Forecast

Future Trends

A consumer shift to Internet shopping

The Internet incorporates features of television home shopping

A blurring of traditional boundaries

The result: home shopping to become Internet-centric

Touch/feel factor to persist

A footnote on direct selling

Market Forecast

Home shopping sales

• Figure 57: Forecast of total U.S. retail home shopping sales, at current and constant prices, 2004-2009
• Figure 58: Graph Forecast of total U.S. retail home shopping sales, at current and constant prices, 2004-2009

Home shopping sales through television

• Figure 59: Forecast of U.S. retail home shopping sales through television, at current and constant prices, 2004-2009

Home shopping sales through mail order/catalogs

• Figure 60: Forecast of U.S. retail home shopping sales through mail order/catalogs, at current and constant prices, 2004-2009

Home shopping e-commerce sales

• Figure 61: Forecast of U.S. retail home shopping e-commerce sales, at current and constant prices, 2004-2009
• Figure 62: Graph Forecast of U.S. retail home shopping e-commerce sales, at current and constant prices, 2004-2009

Home shopping sales through direct selling

• Figure 63: Forecast of U.S. retail home shopping sales through direct selling, at current and constant prices, 2004-2009

Forecast Factors

Appendix: Trade Associations

Appendix: Research Methodology

Consumer Research

Sampling & Weighting

TechnoMetrica TechnoExpresssm

ICR Surveys EXCEL

Simmons National Consumer Surveys

Greenfield Online

Presentation & Definition

Further Analysis

Trade Research

Informal trade research

Formal trade research

Desk & Internet Research

Sources

Definitions

Forecasts

Appendix: what is Mintel?

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