30 Years of Quality, Value, and Convenience

by Ian P. Murphy on Aug 17, 2016 12:00:00 AM DRTV, e-Commerce

30_Years_of_Quality_Value_and_Convenience_1-701048-edited.jpgOne of the original home shopping giants, QVC, turns 30 this month. Marked by innovative products, casual elegance, and a soft sell, the retailer has gone from being an insomniac’s cable companion to the No. 15 e-commerce player in the world. Selling nearly $10 billion worth of clothing, jewelry, cosmetics, electronics, housewares, and other goods every year throughout the world, it isn’t about to slow down.

A New Way to Shop

Joseph M. Segel, founder of the Franklin Mint Corp.—the popular direct marketer of commemorative coins, plates, and other items—incorporated QVC Inc. in July 1986, backed by investors including cable provider Comcast Corp. Along with HSN and a number of smaller live-shopping startups, QVC offered a new outlet for entrepreneurs to sell their products—and a new way for shoppers to buy them.

“Segel saw an opportunity to create a new and unique shopping experience that would both engage and entertain customers through television broadcasts,” says Colleen Rooney, vice president of corporate communications and community affairs for QVC.

Segel named the new network QVC to underline its three guiding principles: quality, value, and convenience. These principles would play an integral role in the network’s push to not just sell merchandise, but to sell good merchandise that keeps customers satisfied.

The network went live in November 1986, and was an immediate hit. QVC posted $112.3 million in sales in its first full fiscal year, and strengthened its position via acquisition of other home shopping companies such as the J.C. Penney Shopping Channel. By 1992, QVC and its rival, HSN, had eclipsed all other players.

Celebrity Credibility

To counter consumers’ initial qualms about product quality and purchasing something from TV, QVC pioneered the intimate talk-show format that has since become a staple for home shopping and infomercial campaigns alike. It’s a soft sell that relies on careful description and inspires identification with—and trust in—its hosts.

“From the beginning, QVC’s goal has been to change the way the world shops through the power of discovery and storytelling,” Rooney says. “We are constantly striving to present customers with unique products that offer solutions to everyday problems, and to allow them to ‘meet’ the real people behind their favorite brands.”

Those people included not only robust cast of regular on-air hosts that people tuned in to watch, but also glamorous celebrity regulars such as soap opera star Susan Lucci, makeup artist and entrepreneur Victoria Jackson, designer Diane von Furstenberg and the late comedienne Joan Rivers—each of whom partnered with QVC to market branded products.

Home shopping—like DRTV and the new channels that have come along in the internet age—also needed to educate customers about products they couldn’t touch or feel to aid conversion. Going beyond the demonstration of a new gadget, QVC needed its hosts to describe items whose function might be obvious, but whose use is personal.

“To ensure we are always providing our customers with the most accurate portrayal possible, our hosts and guests are trained to help viewers envision products through descriptive adjectives, helpful anecdotes, and by sharing their own personal experiences with the items,” Rooney says.

“For example, [they needed] to accurately describe the scent of a particular perfume in a way that captures the various notes and nuances,” she says. “It was important that we were educating the customer on the product, so that they could make informed purchasing decisions and ultimately love what they buy.”

Growing Pains

Segel retired in 1993, and former Fox Broadcasting exec Barry Diller assumed the chairmanship of the growing channel. Diller raised awareness of home shopping among retailers, forging an alliance with Saks Fifth Avenue; launched a push into Latin America and Europe, and introduced the Q2 channel, which targeted younger, hipper buyers.

Diller also began a protracted takeover battle for Paramount Communications, however, using QVC as a bargaining chip. Original investor Ralph Roberts of Comcast ultimately partnered with cable provider Tele-Communications Inc. (TCI) to buy out the network for $2.2 billion in 1995, and QVC continued to grow under the new ownership, launching an e-commerce site, iQVC, Q Records, and other initiatives.

Even during the recession of the early 2000s, QVC was a booming business, expanding its core cable offering and experimenting with brick-and-mortar retail stores. In 2003, Liberty Media Corp., owner of 42.5 percent of QVC and then the owner of Discovery and other media holdings, bought out Comcast’s stake in the network for $7.9 billion, and has continued to build the brand since.

Chatting with Customers

QVC’s secret continues to be what it calls the “backyard fence” approach to selling—inviting viewers into its kitchen set to discuss blenders or cookware, or sitting down at a coffee klatsch that happens to have jewelry or designer fashions. It’s a friendly gabfest similar to The View, but with more than a passing discussion of the product at hand.

“QVC’s fundamental philosophy has always been to inform and entertain in what we call our ‘backyard fence’ approach because it’s genuine,” Rooney says. “It is the relationship our customers have with the hosts, designers, inventors, guests, and team members that is and always has been at the heart of QVC’s business.”

QVC now has about two dozen hosts at any time, plus a who’s who of prominent product representatives including Ellen DeGeneres, Lori Greiner, Kris Jenner, Heidi Klum, Bob Mackie, Marie Osmond, Rachael Ray, Nicole Richie, and Melania Trump.

DRTV and home shopping have shared many celebrity spokespersons, and not just a few successful infomercial products have used QVC as a testing ground before launching an expensive television campaign, including bareMinerals. Other familiar brands such as Spanx, Junior’s Cheesecakes, and Diamonique jewelry got their start on QVC’s shows.

The company is always on the lookout for new products, since first staging a “Quest For America’s Best” tour in 1995—a nationwide roadtrip that broadcast the search for 1,000 new products from a mobile studio. Today, the company hosts a crowdsourced product competition, QVC Sprouts, to help entrepreneurs introduce innovative products to the shopping public.

“As our business has grown, we needed to be conscientious about keeping an avenue open for small businesses that have a great product, but not the operational infrastructure to meet our growing inventory demands,” Rooney says. “The QVC Sprouts program has allowed us to offer customers new and unique products while also providing a platform for our vendors to find success.

“The joy of discovery and the power of storytelling have always been a big part of who we are and what we do,” Rooney adds. “Anywhere else, you’re a product on a shelf or a picture on a website. We strive to allow our vendor community to tell their own unique stories and demonstrate the products in a way that viewers may not see elsewhere.”



30_Years_of_Quality_Value_and_Convenience_2.jpg
QVC employs a ‘backyard fence’ approach to selling, building relationships and trust among viewers with an informal storytelling style.

Beyond the Couch

Today, the allure of home shopping doesn’t stop at walls, borders, or wires. QVC has built a substantial presence internationally in France, Germany, Italy, Japan, and the U.K., and operates the CNR Mall as a joint venture with China National Radio. The network reaches more than 350 million homes worldwide, and is one of the biggest mobile commerce sellers anywhere.

QVC has been quick to develop apps for smartphones, tablets, and Apple TV as consumers increasingly opt to stream video content and buy via mobile, and boasts more than 2 million Facebook fans. “We are constantly striving to deliver a consistently engaging, seamless, and rewarding user experience across multiple platforms,” Rooney says. “In addition, social media continues to be central to QVC’s ability to tell stories and engage customers.”

Global e-commerce sales for the QVC Group in 2015 were $3.85 billion, or 44.0 percent of total sales. Mobile accounted for more than half (51.6 percent) of e-commerce sales, up from 43.6 percent in 2014. Total revenues for 2015 reached $9.17 billion, making QVC No. 15 in Internet Retailer’s Top 500 e-commerce companies worldwide.

Even as the company reaches beyond the confines of the United States and television programming, it continues to stress the importance of satisfaction, transparency, and customer relationships to its success. “We would never want a customer to purchase an item with which they will ultimately be disappointed,” Rooney says.

“Openness and honesty have helped us develop lasting relationships with our customers, who know they can depend on us for a unique shopping experience that helps them find what they love, and love what they find.”

QVC Milestones

1986 Joseph M. Segel establishes the QVC Network.
1989 QVC records its first $10 million day on the Sunday after Thanksgiving, taking 125,000 phone orders.
1993 Segel retires; Barry Diller is named chairman and CEO.
1995 Comcast Corp. and Tele-Communications Inc. acquire QVC.
1996 QVC launches its first internet shopping site, iQVC.
1997 QVC exceeds $2 billion in sales in a 12-month period.
1999 iQVC has its first $1 million day on the Sunday after Thanksgiving.
2001 The company launches a brick-and-mortar retail store, QVC@The Mall.
2003 Comcast sells its share of QVC to minority stakeholder Liberty Media Corp.
2007 QVC ships its 1 billionth package in the United States.
2015 QVC’s annual revenues approach $10 billion.

The above originally appeared in the July-August 2016 issue of ER Magazine.

Ian P. Murphy's blog
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