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Candice Carpenter Q2 STILL STRUGGLES TO BREAK THE MOLD SPINOFF OF QVC WAS SUPPOSED TO REFINE HOME SHOPPING'S DOWNSCALE IMAGE

By Published on .

Q2, the new spinoff channel from QVC, was meant to redefine TV home shopping for a more upscale-and therefore desirable-audience.

It was loftily conceived by QVC Chairman Barry Diller as "Resource Television," able to bring a patina of glamour and excitement to an industry epitomized by cheap jewelry and urgent appeals to buy now.

But so far, Q2 looks a lot more like existing competitors than some thought it would. There are fewer call-ins and less shameless puffery, but the game remains the same.

Right off the bat, Q2 executives sought to distance their approach from existing home-shopping formats. They imbued the channel with a cocky, urban attitude and settled into stu- dios just across the East River from Manhattan, far from the warehouses of St. Petersburg, Fla., and West Chester, Pa., where Home Shopping Network and QVC, respectively, ply their wares.

The channel began regular telecasts last June and has since built to a 54-hour-a-week live schedule, from 7 a.m. to 1 a.m. Friday through Sunday.

It's still too early to gauge the success-or lack thereof-of Q2. Hamstrung by a difficult cable TV climate, it so far has access to just 10 million households. (It has agreements that will guarantee 16 million by yearend and 32 million by the end of 1995.)

"You're not so much redefining the format as you're changing the sensibility," said Candice Carpenter, Q2's president, acknowledging the limitations of any live, in-your-face product pitch. "At the end of the day, it's still selling; it has a certain rhythm and pattern."

The dilemma is that the "rhythm"-a largely confining studio set, a flashing toll-free number, incessant chatter about a continuing stream of products-is what has turned off the 92% of Americans who don't shop HSN or QVC.

"We definitely have some bias to overcome," said Ms. Carpenter, who promises more out-of-studio shows, behind-the-scenes glimpses and continued tweaking of the channel's graphic look by yearend. "We have to find something that's appropriate for our audience but also create some urgency."

Analysts agree there are roadblocks facing any wholesale remodeling of the format. They say that unlike MTV, which is now testing home-shopping shows on its own channel for an audience that's already loyal, Q2 faces a tougher task because it's creating a new brand from scratch.

"I don't think there's been an early success," said Steven Kernkraut, an analyst at Bear, Stearns & Co. "My sense is it's been more of a laboratory approach."

Mr. Kernkraut and others say Q2's early efforts have been hampered by the lack of any buzz about the channel from the retailing and cable TV community. And Q2 has declined to provide sales figures or other financial results.

Q2 isn't the only one trying to refine home shopping's image, but other would-be competitors have yet to make their own marks. Fingerhut's S-The Shopping Channel now promises a December start-up, while the Time Warner/Spiegel joint venture, Catalog 1, is offering taped programs to fewer than 1 million households.

Also clouding the picture for Q2 is the pending takeover of parent QVC by minority shareholders Comcast Corp. and Liberty Media Corp.

Ms. Carpenter seems optimistic, however, claiming the channel's new owners will be more open to trying new formats. Unlike QVC, Q2 doesn't carry the baggage of "conventional wisdom" on home shopping.

But the likely departure of Mr. Diller after the takeover is complete also removes the visionary who helped develop Q2 and promised to breathe new life into the home-shopping business, steering the new-media spotlight in that direction.

To its credit, Q2 has succeeded in avoiding cannibalization of QVC. The Q2 shopper, with a median age of 32, is an average 10 years younger than QVC's, has a higher household income than QVC shoppers of the same age and is less likely to return merchandise, the bane of any shopping channel.

Q2's customers are 32% male, a higher percentage than both QVC and the almost exclusively female Fashion Channel that Q2 replaced. Q2 research shows its viewers tend to avoid department stores and other home-shopping networks but are avid catalog shoppers and occasionally shop specialty stores.

In another contrast, its product mix treads lightly on jewelry, and even then goes for a different look; cubic zirconia are taboo. About 20% of the products are well-known brands like Sony and Weber, particularly in hard-goods segments; another 50% are lesser-known labels.

The youthful (and occasionally uncomfortable-looking) hosts tout toys, electronics and home furnishing items, along with a broad apparel assortment, all sold in discrete, hourlong "lifestyle"-theme segments.

"We're looking for things people use every day, and not something like figurines that sit on the shelf," Ms. Carpenter said. "We're not trying to overwhelm people with the amount of crap that's out there."

Q2 likens its mass/class merchandising approach to a hybrid of the Gap and Williams-Sonoma Co.'s Pottery Barn chain, and aims to reach both channel surfers and busy two-income families who'll make it a point to watch a specific segment.

It's now nearing completion of an agency review for its first promotional ad campaign, scheduled to start next February. Because it's rarely seen in an entire market, but rather on specific neighborhood systems, the channel has opted for a "guerrilla marketing" approach that will rely on outdoor and newspaper TV-listings ads.

Q2 is considering selling commercial time to non-competitive advertisers, and has created 2-minute, direct-response spots of its own products to provide breaks during shows and ease production demands. It has also toyed with the idea of running 10-minute mini-infomercials of products, supplied by vendors for use within regular segments.

But Ms. Carpenter and her energetic staff will move slowly for now, she said; they've yet to forge any deals with mainstream marketers.

"We don't want to muddy the positioning of the channel before it's defined."

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