'As Seen On TV' Rings the Till For Retailers
BOSTON ( TheStreet) -- "As Seen On TV" is no longer just a catchphrase for the gizmos pitched on late-night commercials. It has become a thriving retail category.
Products once sold by mail as "cash on delivery" are now point-of-sale. Retailers such as Target(TGT) , CVS(CVS) and Walgreens(WAG) are devoting prime real estate to TV-hawked wares, often positioning them by checkout lanes for maximum exposure.
|Infomercial products are increasingly making the leap from late-night ads to store shelves.|
"It's been a long time in the making," says A.J. Khubani, founder and CEO of TeleBrands, explaining that his company first put a product on Wal-Mart(WMT) shelves nearly 23 years ago. "It really has started to grow at a more rapid pace in recent years."
Founded in 1983, New Jersey-based Telebrands is one of the nation's top direct television marketing companies. A pioneer of the TV "infomercial," its deep roster of products includes AmberVision sunglasses, the PedEgg foot file, Bake Pop, Bark Off, Heel-Tastic, PastaBoat, First Alert Alarm and Doggy Steps.
TeleBrands saw sales increase by 20% from 2010 to last year. Much of that growth was fueled by in-store sales.
According to Khubani, his company's growth during the past few years was in large part "triggered by the recession."
"Retailers were looking for categories that were growing versus categories that were declining," he says. "During the recession, one of the few categories that were growing was the 'as seen on TV' category in terms of same-store dollar sales. Our existing retailers noticed that and decided to expand the amount of shelf space. Their competitors noticed this and said, 'Well if this drug chain doubled their shelf space from four linear feet to eight linear feet, there must be something there, and perhaps we should too."
"Then, of course, the big player, the monster in the retail business, decided they were going to dramatically increase their space," Khubani adds. "Wal-Mart decided to be a leader in this category, as they are in many others, and dominate the space. I have to give them credit. They really put a lot of effort behind it. They put permanent space for 'as seen on TV' items right in front of the store and dedicated flexible space, their palette promotions, to many more. As a result, sales have really boomed. They have been big part of our own company's growth."
Khubani says Wal-Mart was actually one of TeleBrand's earliest retail customers, nearly 23 years ago.
"They are aggressive, they are innovative and they jumped in early," he says. "But they really decided to step up their game around 2009 and really get behind the category."
Khubani says it is mutually beneficial when a retailer displays "as seen on TV" products near cash registers.