This post originally appeared in Forbes. I am posting it here for my friends at SAP to see.
Hard to believe, but QVC is about to turn twenty-seven years old. Its first broadcast aired on November 24, 1986. While the broadcasts continue on TV, they are also available to view on pretty much any device a shopper has in her hands: from standard web sites to iPads, iPhones and Android devices.
In fact, the deeper I dug into the QVC story, the clearer it became that the company might well have served as one of the world’s first Social Networks. More importantly, it continues to leverage its own and other social networks like Pinterest, Twitter and Facebook to drive customer engagement and revenue. Historically it has always been an early entrant into new selling channels, launching its web site in 1996 and serves as an excellent example for retailers seeking to create a consistent customer experience across all engagement and selling platforms. It’s also a good example of how a retailer can combat “The Amazon Effect.”
I had the opportunity to chat with QVC’s Alex Miller, Senior Vice President of Digital Commerce and get a glimpse into the company’s strategy. As he pointed out, Amazon.com is really good at one thing: Commerce. Amazon makes it easy and convenient to buy with “one-click” shopping, it offers “Prime” to eliminate customer uncertainty around shipping costs, and prices that are either the lowest or “close enough” to keep people coming back for more.
What Amazon doesn’t do well however, is create community engagement. It’s a commerce platform. And while Amazon does try to generate community consciousness through shopper reviews, user-generated questions and answers, etc. I think most would agree they don’t shop on Amazon to gain a sense of belonging. They just want an easy buying experience. QVC is different. It’s all about community and the convergence of social, entertainment and shopping.
I’m old enough to remember the original QVC broadcasts. Customers would call in to comment on items currently on the air and up for sale. They were either re-buying something they’d already bought, excited to make their first purchase, or just encouraging other viewers to buy something they were already enjoying. Many of those customers came from small towns and it was clear they relished their interaction with hosts and guests alike. I used to watch the shows just to listen to those interactions. They were so excited! When you think about it, what the buyers said was pretty similar in concept to today’s digital user reviews, and the interactions with hosts and guests were not unlike today’s Twitter or Facebook fans and followers. Because viewers feel like they know the guests, it becomes a very social shopping experience for them.
Those are the similarities, but let’s take a look at how things have changed.
According to Mr. Miller, two-thirds of QVC’s new customers come through digital platforms. The company’s TV broadcasts remain great marketing vehicles, but the company also has a robust on-line presence and marketing plan that extends well beyond their own platforms. I’ve already mentioned social networks. This season, the company is also sponsoring “Project Runway All Stars” accessory wall.
Because they self-identify, QVC can track its members’ customer engagement across multiple platforms. Content is completely synchronized. Customers can watch “In the Kitchen with David” on TV or on iPads at the same time.
Forty-one percent of QVC’s US sales are consummated on-line. In the past year, customers who engaged with at least one of its social channels generated more than half a billion dollars in revenue. This is particularly compelling given that a majority of retailers are generally giving up on social as a revenue generator. Just over a third of respondents to my company’s most recent eCommerce benchmark survey report they are selling directly on social networks. This is a decrease from prior years.
According to Mr. Miller, the company achieves a 50% open rate on post-purchase emails. That’s a stunning number. Most of us have separate email addresses we use for shopping purchases and just delete all emails that come after the shipping notice has arrived.
As with many forward thinking retailers, the notion of “channel” is disappearing from QVC’s lexicon. “Omni-channel” was a convenient shortcut term for retailers to describe a shopper’s chaotic path to purchase: from product discovery through delivery, shoppers routinely use the web, mobile, stores and any other tool they choose. “Omni-channel” is also a shortcut to describe the alternatives retailers have to satisfy consumer demand. It encompasses every possible fulfilment method, from stores, to direct shipment, to ship from stores, to ship direct from vendors – whatever it takes to satisfy the customer.
Yet we all know consumers don’t think in terms of “channel “. They’re just shopping. Once we grasp that concept, any discussion of “channels” becomes a purely in-house retailer term.
I downloaded the iPad app to see what it could do. I must say I was impressed. I could watch the current TV show live (that community thing again) or I could just shop. In fact, I had to keep my fingers fro pressing “buy” on a Dooney and Bourke shoulder bag (full disclosure: I LOVE handbags).
Finally, Mr. Miller cleared up a question I’ve had burning in my head for a long time. “Why hasn’t TV emerged as an interactive selling channel? The answer was short and sweet. There’s no need to do that if your “shows” are live on the tablet and you can click to buy right there. That started me spinning a bit on the future of desktop TVs, and selling content vs. commercials, but I’ll leave that for another day.
I’ll be keeping my eye on QVC this holiday season to see how sales results go. In an era where retailers struggle to create a consistent customer experience across all touch points, QVC stands out as having already achieved that goal.
And to all of you, a very Happy Thanksgiving, Black Friday, or whatever holiday you’re celebrating. Be grateful. Life is good.