Cable shopping networks are forecast to decline due to changing consumer shopping preferences.
New York, NY (PRWEB) February 10, 2014
The Cable Shopping Networks industry, which retails a variety of consumer products through television broadcasts, contracted over the past five years due to the postrecession slump in disposable income. Income levels dropped 3.6% in 2009 as the labor market deteriorated, which caused consumer confidence to sharply decline over the year. According to IBISWorld Industry Analyst David Yang, “As income and confidence fell, consumers became less willing to purchase discretionary and luxury goods, including jewelry, electronics, cosmetics, fashion products and other miscellaneous consumer products sold by shopping networks.” Industry operators have also faced rising competition from online retailers, as consumers are increasingly shopping online, with e-commerce sales rising strongly over the past five years. As a result, IBISWorld expects industry revenue to fall an annualized 0.7% to $6.0 billion in the five years to 2014.
However, the industry has marginally recovered in the past two years. Disposable income has edged near prerecession levels, which has driven growth in consumer spending. Consumer confidence has also strongly recovered from recessionary lows. As such, consumer demand for luxury products such as jewelry has experienced a slight uptick; as a result, revenue is anticipated to grow 0.1% in 2014. Industry profitability has also strengthened over the past five years, due to the recovery from the recession. Profit is anticipated to increase over the five years to 2014 as consumer demand for high margin luxury products pick up. Profit margins have also increased due to consolidation and cost-cutting efforts by industry operators.
Cable shopping networks are forecast to continue to decline over the five years to 2019 due to changing consumer shopping preferences. Media and entertainment consumption trends will also hamper shopping network sales. “Cable TV subscriptions are projected to fall over the period, which will limit the number of customers that industry operators can reach,” says Yang. Instead of undertaking significant efforts to attract customers to shopping broadcasts, industry operators will likely further expand their own e-commerce offerings, which are not included in the industry. For instance, major players QVC and HSN are already the fifth- and twenty-fourth-ranked online retailers globally. As such, IBISWorld projects that the industry will continue to decline over the period.
For more information, visit IBISWorld’s Cable Shopping Networks in the US industry report page.
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IBISWorld industry Report Key Topics
The Cable Shopping Networks includes companies that use TV programs on subscription or fee-basis cable channels to generate clients and display merchandise. The industry excludes companies that are primarily engaged in generating sales through door-to-door marketing, direct-mail advertising, catalog sales, brick-and-mortar retail or e-commerce.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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