HSN Inc.’s net sales decrease 3.8% in Q1, and online and mobile sales grow their portion of sales.

Online and mobile sales increased their share of total sales in HSN’s shrinking revenue pie in the first quarter ended March 31.

Online sales comprised 53.8% of HSN Inc.’s sales in the first quarter, the TV and web merchant reported Wednesday. E-commerce represents about $422.6 million of the company’s $785.4 million in sales for the quarter. In the same period last year, digital sales accounted for 51.8%, or $423.1 million, of HSNi’s $816.8 million in net sales.

Mobile sales increased to 44.7% of online sales, up from 40.5% in 2016’s first quarter.

HSNi, No. 28 in the Internet Retailer 2017 Top 1000, includes the online and TV retailer HSN, and the Cornerstone brands portfolio, which includes home furnishings retailers Garnet Hill, Frontgate, Ballard Designs, Improvements and Grandin Road.

The merchant told investors it will continue to invest in digital marketing and increase direct mail to acquire new customers, though executives did not say how much HSN would spend, according to a Seeking Alpha transcript.

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For digital marketing, HSN said it uses the Google Display Network and Facebook Live. For example, within the quarter, HSN created a Facebook Live video about Disney’s “Beauty and the Beast” movie. The video drove 3 million impressions and 1 million social interactions, chief marketing officer William Brand told investors.

“We are focused on what we can do to attract more people to our brand, and we know that’s going to cost dollars on the marketing side, and we have many tests in the market to be able to drive that demand,” Brand said.

HSN also uses IBM’s Watson technology to learn more about its shoppers and increase their loyalty, but Brand did not give details. IBM’s Watson uses an algorithm that learns when it’s exposed to new data, so it does not have to be explicitly programmed by an individual—a process called machine learning—which enables it to engage in dialogue with people, learning over time to improve its answers.

“Because the more we know about [our shopper], the more we can be personal to her and she will then thank us for that and stick with us,” Brand said.

Also within the quarter, HSNi opened one store and plans to open three more in 2017.

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For the first quarter ended March 31, HSN Inc. also reported:

  • Total HSN Inc. sales (HSN plus Cornerstone) of $785.4 million, a 3.8% decrease compared with $816.8 million in Q1 2016.
  • Within that total, HSN net sales of $560.5 million, a 3.1% decrease from $578.4 million.
  • Cornerstone net sales of $224.9 million, a 5.7% decrease from $238.4 million.
  • Net income of $21.3 million, a 25.5% decrease from $28.6 million.

 

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