How QVC Turned an Obsolete Genre Into an $8.8B Business
QVC has gone from a business in danger of being obsolete to an industry-leading powerhouse.
With the rise of big e-commerce players like Amazon and eBay, the home-shopping business model could have become stale. So the West Chester, Pa., retailer named Mike George CEO in 2006 after he served as chief marketing officer and general manager at Dell.
Now, QVC is an $8.8 billion empire with 17,000 employees broadcasting in six countries (soon to be seven when it opens QVC France). It shipped 173 million products in 2014.
And e-commerce is thriving, with online revenues of $3.5 billion in 2014. Forty-one percent of its orders were generated on mobile platforms.
I spoke to George about a wide range of topics including the business’ conversion to a mobile and web platform; the death of Joan Rivers, one of its biggest stars; and the rise of Lori Greiner and Shark Tank.
BizPhilly: The Internet could have made home shopping obsolete. How has the company changed to make the web an integral part of its business?
George: There was a point in time in which the fear outside the company and even inside the company was: “Will this format become obsolete in the age of the internet?” When I joined QVC, we did approximately 10 percent of our business online. In the next year or so, we’ll exceed 50 percent of our business online.
Back then, we had a separate team purely focused on QVC.com. Now it’s just fundamentally integrated into everything we do. We’re trying to take great content and manifest it on an iPhone, on live TV, on our second channel, and on social. Social has been huge as far as the level of engagement. It’s really transformed from this lineal, lean back, passive experience to a very active experience across platforms.
If you look at our sales on the iPhone app, it’s heavily weighted on the item that’s on TV at the moment. Because it would take me 15 seconds to open the app and order the item. It’s the most frictionless way to shop.
On the tablet, it becomes more of a browse experience. Maybe they love that vendor but not that particular item. So they’re on their iPad browsing and scrolling through the assortment, and more often than not, they’re buying something that isn’t on air at this moment.
Lori Greiner from Shark Tank has made QVC a household name. Do you just give her a big hug whenever you see her?
Laughs. It’s been amazing and Lori is amazing. She’s been with us probably 17 years and has always been an important part of QVC, but her popularity with Shark Tank in the last four or five of years is just unbelievable. She has such a following.
Now we synchronize the Shark Tank experience with our own experience. When Shark Tank ends, we want people to flip over to QVC and watch a Lori Greiner hour on QVC.
QVC is the one place that’s still a home for the entrepreneur, and the person at home in the kitchen with the crazy idea that they think could make a difference. I think Shark Tank has helped to renew that energy and excitement.
Joan Rivers was one of QVC’s biggest stars and passed away suddenly. How do you handle something like that?
First, we had to go through a process of dealing with our grief — the grief of our team, and the grief of our customers — long before we worried about the commercial implications. Joan was deeply connected to the QVC family. I was at her bedside the night before she passed away.
The outpouring from customers was unbelievable. Letters, phone calls. Our call centers were overwhelmed, not with product calls but calls about Joan.
Then you sort out the business implications. In the case of Joan, she had built a very impressive business with a strong team. That business has continued, the president of the company, Joan Rivers Worldwide, is the person that comes on air and sells the product. That business remains strong.
You must have entrepreneurs beating down your door everyday, telling you that their product is the next big thing. How many people try to push their products on QVC buyers each day?
It’s a huge number. It’s everyone from an entrepreneur to a celebrity that has a product line to a national brand. Also vise-versa — our 200-plus buyers are going to trade shows and meeting with vendors to see what’s out there. It’s tough in the sense that you can’t spend enough time with enough vendors to satisfy the amount of people who want to be on QVC.
We launched a QVC Sprouts program that’s totally focused on entrepreneurs. We put the products online and let customers decide which ones they love. We’ll have them build a business on .com first — that’s a lower hurdle. The ones that are best on .com earn the right to then be on TV.
How long does an entrepreneur get with a buyer? I’ve heard it can be really quick.
There’s not a set time. The buyer is there to listen. They don’t have a lot of time because they have a lot of meetings. Talk about the story. If it’s compelling, the buyer will sit there. You’ve got to able to grab our attention.
It seems like the public calls all shop-at-home networks QVC, even the low-level ones that sell baseball cards and cheap stuff. It’s like how people call all hot tubs Jacuzzis. Is that cool with you?
Great question. It’s fun to be the leader. The challenge is, there are a lot of bad players in TV hocking low-quality products at bad prices. They’re misrepresenting the authenticity, the value. And people may think that’s QVC. So that’s the negative.
There are a lot of positives about being the market leader. I think our competitors are getting better over time. Early on, QVC said we’ve got to earn the customer’s trust in an inherently untrustworthy medium. Over many, many years, that helped us get to the industry forefront. The good news is, I think the competitors are starting to copy us, so we’ll take that flattery. I think it’s actually good for the industry. As the market leader, you want to grow the category. If you’re a follower, you want to gain marketshare.
What’s QVC’s most successful product?
If you’re talking about the most units sold in a particular day, that would be the FrostGuard Windshield and Wiper Cover, a product you put on a car windshield before it snows. We sold 580,000 units in a single day of that single item.
What makes a good QVC product? Is it a charismatic entrepreneur?
There needs to be some level of uniqueness. It’s not something you’re going to stumble upon in the department store. There’s a good story behind it and a good story teller behind it.
What’s your biggest professional failure?
Where I’ve had more than my share of misses is in bringing new leaders into the company and have them really embrace our mission. I changed my whole orientation about how to recruit and onboard people. I’ve had a number of failures where I hired wonderful, talented, highly capable people who had great successes but they didn’t work at QVC. It’s such a unique model and unique culture. You have to be willing to be a student and re-learn everything. I tell them, you have six months where I want you to accomplish absolutely nothing. Just learn. Write down observations and be a student. Everybody says “ok,” but nobody can do it. It’s a lot harder than it sounds. You have to love to learn, be jazzed by our culture and embrace it.