When it comes to pushing product, QVC seems to have it down. The original retailer that made the TV-dial its home base in the 80’s has found a way to keep presenting almost 800 products a week with no commercial breaks. It’s a tough job for on-air presenters who spend months learning how to talk, move and act to properly show off merchandise, but it seems like a little less strain is being put on them as the company shifts towards a digital-first approach.
Over the past decade, QVC (QVCA) has seen many of its customers shift from the traditional call-in and desktop orders to mobile. Of the company’s $3.9 billion in e-commerce annual revenue in Q3 of 2016, almost 60% came from a mobile device, a 10% jump from the same period in 2015.
Sales from their recently acquired company Zulily helps. QVC bought the company back in 2015 for a reported $2.4 billion hoping to get its tentacles around the digital-first millennial mom. This is one of the major moves that QVC has made to attract the coveted Gen-Y market. About 60% of QVC’s capital is being used to build and improve its digital platforms. From 2013 to 2015, QVC invested between $183 million to $215 million annually. These investments include launching a beauty channel, focusing on streaming on Facebook, and developing platforms on Apple TV and Roku.
We’ve seen similar moves from many department stores struggling to compete in a world that Amazon (AMZN) dominates. QVC’s difference from the typical department store is that it’s also a media company, which is both an asset and a disadvantage. Unlike a store such as J.C. Penney (JCP), QVC also has to worry about viewers and cord-cutters. QVC is pretty much getting hit on all sides—resulting in a drop in sales this past quarter. “We are on the TV-dial…” says CEO Mike George, “from the elections to terrorism, I think that made it hard for our customer to engage on QVC.”
Its dip in sales doesn’t really signal that they’ll be off air anytime soon. “She [the consumer] is still tuning in,” George says, “but [she’s] a little more conservative on how she spends.”
QVC has a dedicated customer base that regularly tunes in to learn about the products. Senior vice-president of digital commerce Alex Miller calls the company “the ESPN of shopping…” where viewers trust the presenters to give them all the facts before placing bets. In fact, 90% of purchases on QVC come from repeat customers.
Either way, QVC will still hold the advantage of being the first and one of the few video retailers in the world, competing with channels like HSN. And it’s easy for the company to repurpose the broadcasts on its website, send them in emails and use them to populate its social media channels.
George says he’s not sure how the way the company works with video will change. He suggests the company is thinking of experimenting with virtual and augmented reality to get the host right in front of the consumer, but that’s not any time soon. George says, “We want to be ready for wherever she goes.”
